Mountain States Dialogue Heats Up on SunCorp
As NCUA deadlines near on recapitalizing the corporates, at least two state trade groups in the Mountain West have been ramping up the internal dialogue with member CUs concerned about the fate of SunCorp, the Denver-based corporate.
For one, the Utah League of Credit Unions said CUs in the state have been invited to another in a series of “roundtable” sessions Tuesday in Salt Lake City to discuss options on CUs contributing to the recapitalization of the $1.9 billion corporate in line with an Oct. 20 deadline.
Key questions being asked at the Tuesday session, according to internal memos: “What is the world without SunCorp? What are some options? What ones are you considering?”
Scott Simpson, president/CEO of the Utah League, said Utah CUs in dealing with the corporate dilemma “have the options that are available to any other credit union in the country” but it would “be irresponsible speculation” to discuss the current scenario involving SunCorp.
SunCorp officials said they would have no comment on the Salt Lake meeting or the corporate’s recapitalization program.
Following the Utah league pattern, Scott Earl, president/CEO of the newly formed Mountain West Credit Union Association, made up of the former Arizona, Colorado and Wyoming leagues, said it has had numerous discussions on the corporates, SunCorp and the recaps including sessions held during the annual meeting last March in Colorado Springs.
Some of the largest CUs in Colorado and Utah, at least, have long since opted out of reinvesting in SunCorp, relying on Federal Reserve banks or other providers for services, but smaller CUs have relied on SunCorp for basic processing and funding functions.
Both Earl and Simpson, like other top league executives along with CUNA, have repeatedly stressed the need for a “systemwide solution.”
In a March email to Mountain West members, Earl wrote that the “credit union movement is at a crossroads regarding the future of the corporate credit union network, with each credit union currently working through its own decision whether they will stay with their current provider or move to a new entity for item processing, liquidity and investments.”
In the email, Earl said that as CUs consider options, “We encourage you to include an analysis of how your decisions will affect the entire movement, and how, in turn, the future shifting of the movement will affect your credit union. Certainly, anything that strengthens the movement will strengthen your credit union.”
“Here at the Association, we believe that a system solution is preferable to a for-profit solution. By ‘system’ we mean that the solution was created by and for credit unions, to benefit credit unions.”
One Utah CEO told Credit Union Times “we understand $70 million is what SunCorp needs” but that it was touch-and-go whether they would meet that goal.
“We certainly would like to stick with SunCorp but we’ve made arrangements with the Federal Reserve if we need to switch, or we are looking at other corporates,” the CEO said.