At U.S. Central, the Fed’s Not-So-Hidden Hand
The memo offering details of life after U.S. Central Bridge came out of the NCUA with a bland title, “Fact Sheet APEX-ACH Transition.” But as it has circulated, it has triggered a large question among some corporate credit union executives: Which government body is steering this effort, NCUA or the Federal Reserve?
The stated purpose of the document, distributed to CEOs of corporate credit unions, is to offer detailed guidelines to corporate credit unions as they prepare their exit strategies for leaving U.S. Central Bridge, due to be filed with NCUA no later than Feb. 24.
“We were just visited by a Fed staff member who let us know that the Fed was overseeing this APEX conversion project. It is unprecedented in my career to see the Fed take charge of a credit union project. NCUA will spin this as coordinating closely with the Fed, but reading between the lines, I see the Fed taking control of this conversion because they don’t have faith in NCUA to not disrupt the payment systems.”
Another senior executive at a corporate indicated that the Fed is deeply involved because so much is at stake. By his estimate, some 2,000 natural person credit unions, operating through their corporates, process payments through U.S. Central Bridge and that large number of institutions now needs to get in a queue to set up processing through the Fed.