Amid Tighter Regs, Corporates Hopeful On Relevancy
“The purpose for which natural person credit unions formed corporate credit unions has been fundamentally changed by the new regulation,” Bonds said. “It will take time for the few surviving corporates to adjust to the new business model.”
Still, while Bonds sees corporates growing by offering new lines of business such as audit services, brokerage services and website development, he believes that the present regulatory regimen may bring challenges for many corporates.
Butke said Corporate One has plenty of capital to support its balance sheet but he also indicated that a path to growth at his corporate will occur off balance sheet. Part of that growth will come through an increase in its CUSOs including those picked up in the recent merger with Southeast Corporate. Because capital is not required for Corporate One to use its CUSOs, a natural person credit union can choose to use Member Business Solutions for instance, without a capital call.
Butke also rang a warning bell about the future of all corporates.
Alloya can also offer access to experts in many areas including back office capabilities that can give credit unions a competitive advantage, Vrigian said.
“Credit unions don’t have to build out systems. Why would they,” he asked. “Leverage the resources of a corporate.”
Those guidelines tie directly into the cooperative history of corporates, can lessen the competition for members, and it just might light a path to prosperity, she said.
“There is such great opportunity for the corporates that adapt to the new marketplace,” Glidden said.