The Charter Advisory Group of Members United Bridge now is taking big steps to prepare for a post-bridge existence as a stand-alone corporate, said John Fiore, CEO of the Motorola Employees Credit Union, speaking in his capacity as chairman of the CAG.
On March 18, the CAG filed an official application for a new charter with the NCUA. A business plan, proposed bylaws and policies, and an application for share insurance also were submitted.
That puts this ball squarely in the NCUA’s court, said Fiore. The approval process is expected to take 60 to 90 days. "Hopefully, the sooner the better," said Fiore. Assuming all the pieces fall into place, the new corporate would open for business on Oct. 1, 2011, said Fiore. "We have a lot to do in a short amount of time."
"We will start the capital subscription campaign as soon as we get NCUA approval," added Fiore. "We have 2,400 members–that is a lot of members to reach out to."
Key to the creation of the new corporate is an innovative capital plan, "unique in the industry," according to Fiore. The plan is tied to credit union debit settlement and not assets, so members of the new corporate would contribute based not on their size, but on their usage of the corporate. This is expected to reduce the necessary capital contributions from members, said Fiore, who added that he is very confident about its success.
"Our capital requirements are so much better that we may get new members, ones that had not previously belonged to Members United," said Fiore.
"Larger credit unions who may not need corporates need to play a role in this. They need to do this to make sure there is a corporate credit union system," added Fiore. "We need to join in keeping small credit unions alive and well."
"I am delighted NCUA has given this great opportunity to seek to form a new corporate. This will be a different corporate, a new kind of corporate that will serve our members' need," said Fiore.
The backdrop to the CAG actions is their belief that one way or the other, Members United Bridge will cease to exist not too many months from now. The initial hope had been for a merger with another Tier 1 corporate bridge, but that option has unequivocally been taken off the table by the NCUA. The newest actions from Members United Bridge indicate a belief on the part of at least some members that the bridge can be transformed into a viable corporate on its own footing.
Members of the Charter Advisory Group have agreed to serve as interim members of the board of directors of this new corporate if it is given the go-ahead by the NCUA. These include Curt Cecala of TCT FCU, New York; John Fiore of Motorola Employees CU, Illinois; Lynn Kothe of North Memorial Federal Credit Union, Minnesota; Leanne McGuinness of The Summit FCU, New York; Floyd Rummel, III of Dakota Territory FCU, South Dakota; Amy Sink of Teachers CU, Indiana; and David Suvall of Rhode Island CU.