Today is the deadline for reaching $200 million in capital commitments and at least some backers of United Resources – the new corporate attempting to form out of Western Bridge –want to let it be known that their support is unwavering.
Case in point: Vons Credit Union, a $320 million institution headquartered in El Monte, Calif., which voted Tuesday to up its capital commitment to United Resources from $960,470 – initially committed in July – to $1.5 million, according to an email from Steve Weakley, the credit union’s CEO.
That represents a significant boost over the minimum capitalization required of an institution the size of Vons CU. The basic formula is 25 basis points of assets, according to Matt Davidson, CFO at Kern Schools FCU and a board member of United Resources.
This decision by Vons CU comes amidst reports that the capital drive by United Resources is falling far short of its $200 million goal.
Asked to explain this decision to up the Vons CU ante, Weakley responded via email, “I do not believe [United Resources] will reach their capital goal by 8/31/11, but I do believe an alternate solution is in the works and the stronger United Resources is positioned, the better they will be able to pursue this solution.
“Our plan B is to allow Western Bridge management to work with the NCUA on an alternate plan for all Western Bridge members. The NCUA has made it very clear about maintaining continuity of service during this transitional period. Given this commitment by the NCUA to facilitate orderly transitions of member services to other service providers, Vons Credit Union will stay the course. It’s the least disruptive course of action for our credit union.”
Weakley added: “We are committed to the corporate network and believe it adds value to us and many other credit unions. ... We are a highly capitalized credit union and we thought it was time for us to step up and act once again.”