That tri-fold plan now nearly seven months old hatched by the Iowa Credit Union League, its processing affiliate and the $84 million Iowa Corporate Central of Des Moines to dissolve the corporate and fold its processing business into an entity run by the National Cooperative Bank of Washington remains on hold.
In a statement issued Thursday, the Iowa trade group said the league, its subsidiary Affiliates Management Co., and NCB “remain committed to implementing a solution” sometime “in the third quarter.”
The “solution,” as it is called, would “provide consistent product offerings, local delivery of services and competitive pricing” to Iowa CUs that have been members of Iowa Corp., considered the nation’s smallest corporate.
Last September the Iowa League and the Des Moines corporate announced a “preliminary agreement” for the eventual “unwinding” of the corporate and service consolidation with NCB. The original–and apparently optimistic–timetable, amended several times since then, was for the NCB package to be wrapped up by year-end 2010. More recently, an April 1 target was put forward in memoranda sent to Iowa Corporate members, sources said.
While operational details on products and pricing–not spelled out–are being finalized, the Iowa League said Iowa Corporate continues to function routinely with Sara Flynn as its president/CEO.
“Iowa Corporate continues to operate as an independent state-chartered corporate credit union providing correspondent financial services to its member owners,” said the league. “There has been no material change in Iowa Corporate's membership and the fluctuations in total assets are within the range experienced during the normal course of business.” At the time of the preliminary NCB deal, Iowa Corporate’s assets topped $100 million.
It was also learned this week that credit union lawyers for some of the NCUA-conserved bridge corporates, particularly Western Bridge Corp. and Members United Bridge Corp. had considered using the “empty shell or gutting” of Iowa Corporate as a transition vehicle for a new merged corporate. That was until NCUA put a damper on merger plans being advanced by West Coast groups involved in the negotiations.
“Frankly, I am a little surprised to learn that the Iowa transaction with NCB is still being worked on since I thought it was a done deal,” said one industry source close to ongoing NCUA talks on corporate mergers.
