The email from the NCUA to current Western Bridge members summed it up.
“The National Credit Union Administration Board awarded Catalyst Corporate Federal Credit Union (Catalyst) the exclusive right to acquire Western Bridge Corporate Federal Credit Union (Western Bridge).”
Signed by Scott Hunt, director of the Office of Corporate Credit Unions, the email continued, “In making this decision, the board contemplated the proposal that best fit its stated goals of minimizing service disruption to members of Western Bridge and obtaining the least long-term cost to the insurance fund.”
In a statement, NCUA board chairman Debbie Matz elaborated.
“NCUA’s corporate system resolution plan took a huge step forward today. Catalyst has a proven track record of integrating operations in prior acquisitions and employing sound business practices to maintain continuity of operations. We are confident that Catalyst will provide the same array of payments services presently provided by Western Bridge to its member consumer credit unions.”
In Plano, Texas, Dianne Addington, Catalyst CEO, told Credit Union Times in an interview that she believed Catalyst won because many of its computing systems are identical to those used by Western Bridge. The upshot is that the transition is expected to be fast and comparatively easy.
Addington also indicated that she believed many Western Bridge members will find their ongoing costs lower when they sign with Catalyst. “We know we bring good value,” she said.
Credit unions that choose to become Catalyst members will be asked to make a capital contribution, said Addington. “But in most cases it will be lower than what had been required by United Resources,” the corporate some Western Bridge members had tried to form earlier in 2011. That capital drive fell far short of success.
By Addington’s math, a $1 billion credit union would have to pony up $2.5 million to capitalize United Resources. “With Catalyst we are asking for $750,000.”
The next step for Catalyst, said Addington, is that it will hold a series of town hall meetings in January.
Exactly how many Western Bridge members, now believed to be under 900, will choose to transition into Catalyst is unknown. Around 300 had committed capital to United Resources, but when that effort failed in the summer, those credit unions were free to pursue alternatives. How many did is not known.
At Catalyst, the count of capitalizing members is around 900. Another 450 noncapitalizing credit unions also use at least some Catalyst services.
Although never confirmed by the NCUA, other bidders for Western Bridge were thought to include Alloya, SunCorp and CenCorp.
For its part, SunCorp declined comment on the NCUA decision. At press time, CenCorp had not responded to a request for comment.
At Alloya, John Fiore, a leader in the drive to capitalize that corporate and also the CEO of Motorola Employees Credit Union, indicated that he expected Alloya to aggressively compete for members among western state credit unions. “We want to grow Alloya’s volume so we are seeking new members,” he said.
Fiore added that a year ago many Western Bridge members had sought to win approval for a merger with Members United, the predecessor to Alloya. “They wanted us then, and we expect many still want us, regardless of the NCUA decision.”
He said that, come the new year, Alloya, which has about 1,100 capitalizing members, will aggressively be on the ground in the West. “We will be out there.”
At Phoenix-based FirstCorp, Chief Operation Officer Stacy Glidden said about the NCUA’s decision, “Two wrongs obviously can make a right.” She elaborated that she thought it inappropriate for the regulator to merge conserved corporates into a single entity that will likely be much larger than any other corporate. “To me, this was a very disappointing decision. It reflects a lack of creativity.”