Wednesday’s announcement said that Washington, DC-based National Cooperative Bank (NCB) would join with The Members Group, a wholly owned subsidiary of the Iowa Credit Union League, to fill the gap.
Now Sara Flynn, CEO of Iowa Corporate Credit Union, has offered more specifics and a key point is that the definitive agreement that was recently executed does not call for formation of a new entity to service Iowa credit unions.
Flynn explained: “The entity providing correspondent banking services to Iowa’s credit unions is the NCB. TMG will continue to provide customer service and operational support as part of the joint effort to ensure a consistent experience for the Iowa credit unions.”
She said start-up will happen in early autumn: “The Iowa credit union transitions will begin in late September and are expected to be completed by mid-October.”
As for costs, Flynn said, “The solution delivers an economically attractive solution to Iowa credit unions that offers better rates than the Fed and keeps the cost of services generally consistent with pricing today at Iowa Corporate. In addition, the NCB solution does not require any capital investment from the credit unions.”
As for why the Iowa League did not instead point its members to one of the corporates likely to survive, Flynn said, “We worked to design a correspondent banking solution outside of the corporate network not knowing the future state of corporate credit unions. “
She also said that at present the NCB-TMG solution is not open to non-Iowa credit unions.
“Currently the correspondent banking program is for Iowa credit unions only. At this juncture, the goal is to ensure a successful transition of the Iowa credit unions prior to NCB entertaining any other opportunities for correspondent banking,” Flynn said.
She also indicated that the majority of current Iowa Corporate members are expected to transition into the NCB-TMG offering.