Alternative Capital: Some See New Threat From CUSO Regs
For some credit unions, finding ways to create alternative capital can be a daunting and ongoing strategic maneuver.
One consideration might be capitalizing through the investment in or the creation of a CUSO, said Henry Wirz, president/CEO of the $1.8 billion SAFE CU in North Highlands, Calif. He offered that solution as the NCUA continues to weigh a proposed amendment to the CUSO rule.
Wirz said SAFE cannot raise alternative capital from “outsiders” to build an indirect lending business, but it can capitalize that venture through a CUSO.
“It is unfortunate that NCUA is willing to regulate in ways that can harm capital formation and increased efficiency in credit unions,” Wirz said. “If NCUA did as much to promote CUSOs as they do for community development credit unions or alternatively did as much to regulate community development credit unions, the credit union system would be better.”