It now looks like it could take until the third quarter for the Iowa Credit Union League, its processing affiliate and the National Cooperative Bank of Washington to finalize a plan to dissolve Iowa Corporate Central Credit Union and morph its correspondent services into the bank.
The bold plan, which has been in the works seven months following a preliminary agreement between the parties, remains on hold with only terse comment on the delay.
In a statement last week, 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 would "provide consistent product offerings, local delivery of services and competitive pricing" to Iowa CUs, which have been members of Iowa Corporate Central, considered the nation’s smallest corporate.
Last September the Iowa league and the Des Moines corporate forecast an eventual unwinding of the corporate and the service consolidation with NCB. The original 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 memos sent to Iowa Corporate members, sources said.
While operational details are being finalized, the Iowa League said Iowa Corporate continues to function routinely.
"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 learned 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 of Iowa Corporate as a transition vehicle for a new merged corporate. That was until the 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 the ongoing NCUA talks on corporate mergers.
There was no comment from the Iowa league verifying any of the reported negotiations.