Corporate Capital Pledge Fears Weigh on the Industry
The ability to raise capital continues to define the new corporate marketplace.
The Tallahassee, Fla.-based Southeast Corporate Federal Credit Union faced a May 31 deadline to raise $75 million in perpetual contributed capital in advance of the $1.6 billion corporate’s planned merger with the $3.7 billion Corporate One Federal Credit Union. And the $2.4 billion Corporate Central Credit Union will now offer credit unions the option to establish membership at an associate member, providing services while requiring less capital than required for full membership, or no capital commitment at all.
“It really does offer something for everyone,” Felton said. “A credit union can become a full member and participate in the governance of the organization, or they could gain the convenience of settlement and a credit line by contributing capital proportionate to the line of credit, or they could just want some services and invest no capital.”
Doug Wolf, former president/CEO of the shuttered Midwest Corporate Federal Credit Union, said fewer credit unions have left the corporate system than he anticipated. Wolf is now vice president for ProDraft Services, a Bismarck, N.D.-based CUSO that was begat out of Midwest Corporate to provide item processing, deposit processing and correspondent services for about 50 credit unions.