U.S. Central ACH Hike Causes Run for the Exits
Many worried credit union eyes now are on July 1, the date when the NCUA has said it will bump up ACH fees for U.S. Central Bridge customers by 80%. That looming price hike has triggered a quick rush to the exits as corporates and their members race for alternatives.
The good news is that most credit unions said their exit plans are taking shape.
Other options are plentiful, however, and include an offering from Wichita, Kan.-based Lending Tools as well as a new offering via Jersey City, N.J.-based financial services provider Fundtech, which recently announced ACH tie-ups with Columbus, Ohio-based Corporate One and Warrenville, Ill.-headquartered Alloya. The Federal Reserve also has been active in directly contacting corporates in an effort to put more credit unions directly on Fed systems. Sources also have indicated that yet more conversion plans may be forthcoming from other financial services providers.
Add that activity up and that is why there is optimism that credit unions that act promptly will be able to avoid the 80% fee increase. In fact, at least one corporate credit union said that it has already moved off the U.S. Central Bridge ACH tools. At Corporate America in Irondale, Ala., CEO Thomas Bonds said, “We converted 99% of our member credit unions off of the USC ACH platform last year in anticipation of this failure. We have only three CU's still using APEX and they are in the process of converting as we speak.”
Kansas Corporate sings the praises of Lending Tools, saying its tools enabled KCC to convert 50-plus members off U.S. Central Bridge and into the Lending Tools processes before the end of 2011, according to CEO Larry Eisenhauer and Operations Manager Tonya Johnston. They indicated that additional conversions, triggered by members of Montana-based corporate Treasure State, which now has merged into KCC, will be implemented by May 1, “well ahead of the required deadline established by the NCUA or before any member incurs the significant increase in fees planned for July 1st,” said the Eisenhauer-Johnston email.
They added, “ As we’ve made the transition away from U.S. Central, we have to be able to offer the same quality products and services without adding resources and keep the expense structure in check.”