The big story about the NCUA’s sale of parts of failed corporate credit union U.S. Central may be what has not sold, sources have told Credit Union Times.
Last week the NCUA trumpeted that it had awarded the right to pursue the U.S. Central eCom subsidiary to CO-OP Financial Services.
Said the regulator in a statement: “The National Credit Union Administration (NCUA) has chosen CO-OP Financial Services, based in Rancho Cucamonga, California, to pursue the acquisition of the online and mobile bill payment services of Corporate Network eCom, LLC, a subsidiary of U.S. Central Bridge Corporate Federal Credit Union.”
What did not apparently sell, however, are the far bigger U.S. Central ACH, Apex, auto-settlement and related lines of business, sources pointed out to this publication.
Earlier it had been reported – although not confirmed by NCUA or the companies involved – that Brookfield, Wis.-based Fiserv and Wichita, Kan.-based Lending Tools were bidding for those business lines,
When asked when NCUA planned to announce the disposition of these lines of business, Public Affairs Specialist John Zimmerman said the regulator had no comment.
As for CO-OP’s pick up of the online and mobile pay services of eCom, sources characterized this as a “good deal for all. eCom is a profitable U.S. Central subsidiary that fits well into CO-OP,” said one industry observer.
She added that eCom is “only a small piece of U.S. Central. The bigger pieces have not sold.”
At CO-OP, executive vice president Kim Hester said in an interview that CO-OP purchased eCom because “we see this as a growth business.” She added that the 10 eCom employees would continue to service the 130 credit unions that presently use eCom.
“With our involvement eCom will stay inside the industry,” said Hester, who underlined that CO-OP is a credit union-owned entity.
Hester declined to elaborate on the terms of the deal.
She did note, however, that CO-OP was not a bidder on the other parts of U.S. Central.
The future of those lines of business presently is unknown. NCUA has assured customers that U.S. Central services will be uninterrupted.
Last week, Lending Tools CEO Eric Goering said in an interview that the payments specialist has signed a “significant” number of corporates to “binding agreements.”
Observers interpreted that statement as an indication that Lending Tools was not pursuing its bid for U.S. Central. The company declined to confirm or deny that (it also had no comment on whether or not it had made a bid).