WEST PALM BEACH, Fla. -A spike in deposits in 2001 has led to corporate credit unions giving back to their member credit unions.
A number of corporates, including SunCorp, Mid-States, and FirstCorp have already announced that they are returning money to their member CUs, and at press time a handful of other corporates were set to make dividend announcements.
The increase in corporate CU assets was dramatic this year. According to Callahan & Associates data, from Sept. 2000 to Sept. 2001 corporate CU assets increased from $63 billion to $92 billion. Here's a look at how some corporates have returned money to member CUs.
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The $3.5 billion Mid-States Corporate FCU, Naperville, Ill., is giving back to its member CUs with a one-time special rate increase for December of last year.
It has paid over 5.00% for balances in its cash management account on Dec. 31, 2001.
Mid-States President/CEO Dave Preter said the corporate wanted to "turn back the clock" for its members so to speak to a time when interest rates were higher.
The formula Mid-States uses to determine rates paid on its Cash Management Account would have normally set the December rate at 1.70% for CUs with balances over $5 million. That rate was tripled to 5.10% for CUs with balances between $1 million and $5 million, and those with balances below $1 million received 4.90%.
The $2 billion First Carolina Corporate CU, Greensboro, N.C., is paying its member CUs a bonus dividend.
The corporate will pay dividend rates of 8.5% on Membership Capital Share Deposits and 10.0% on their Paid in Capital accounts for December.
Members of the $2 billion SunCorp Corporate, Arvada, Colo., CU will be paid a 6% dividend rate on Membership Shares and a 7% rate on Paid-In Capital for December.
SunCorp leadership said savings from the merger with Rocky Mountain Corporate CU helped the corporate return money to members. [email protected]
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