After a year-long re-examination of its member business lending operations, Northeast CUSO announced Monday that it will close shop and distribute capital to its six credit union owners.
Steve White, chairman, and Scott Anderson, CEO of the Keene, N.H.-based CUSO, made the announcement.
Northeast said it will continue to provide services to its current 20 partners until April 2013, after which, it will wind up operations over a period of months.
The CUSO offers business lines, term loans and commercial real estate loans for member-owned businesses. The credit union owners are:
- $892 million Workers’ Credit Union in Fitchburg, N.H.
- $790 million RTN Federal Credit Union in Waltham, N.H.
- $1.1 billion Metro Credit Union in Chelsea, N.H.
- $1.9 billion HarborOne Credit Union in Brockton, Mass.
- $219 million Westerly Community Credit Union in Westerly, R.I.
- $332 million Heritage Family Credit Union in Rutland, Vt.
- Medical Area Federal Credit Union (Effective Dec. 2, Medical Area Federal Credit Union merged with RTN FCU).
“It is not easy to make a decision like this, particularly when you have a successful business”, said Anderson. “We are about to conclude our sixth straight year of profitable operations and if we ran the company based solely upon that measurement, we might continue.”
Anderson said looking ahead, Northeast’s management and the board agreed that now is an ideal time to exit this business and put the capital to use in other ways.
“We decided to do this now, while we are making money and have a lot of cash, which allows us to protect the interests of our customers and employees,” Anderson said.
Northeast was formed in 2004 to help credit unions develop small business portfolios. The CUSO said it processed over $1 billion of such loans for 20 customers in eight states.
In February 2011, the CUSO said it boosted its 2010 revenue by 19% and doubled its net earnings that year after a profitable showing in 2009 as well.
“We started and built a successful business,” White said. “There are a lot of credit unions that got into business services and are there to stay, thanks to the work of Northeast CUSO and its team.
White said “when management – Anderson, and Chief Operating Officer Rick Slater – said that the MBL environment was changing, our board listened, and we collectively agreed to a new approach that does not require a CUSO. At that point our main goal was to take good care of customers and staff, and we will do that.”
Slater said the staff and board members remain the CUSO’s most valuable assets and without them, Northeast would not have succeeded.
“I greatly appreciate our credit union customers, without whom there is no business,” Slater said. “We did a lot of good work together and I believe they have a bright future in business services. It really has been fun and rewarding.”
