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LENEXA, Kansas – The consensus in the corporate credit union network is there is a lot riding on the shoulders of the next U.S. Central Credit Union CEO – especially for small and mid-sized corporates. “It is a key appointment. It’s going to help shape the future of the corporate network,” said Dennis DeGroodt, CEO of the $667 million Missouri Corporate CU. DeGroodt’s corporate relies heavily on U.S. Central. “We’re 98% invested in U.S. Central. It has helped us bring products and services to our members that we would not be able to deliver or develop on our own. That has been a huge benefit over the years,” said DeGroodt. DeGroodt has heard the talk of U.S. Central’s role diminishing in the future as the larger corporates get larger, but said that argument is old and people have been hypothesizing for years, meanwhile U.S. Central’s importance has grown in the network. He said he will be very disappointed if small and mid-sized CUs get pushed out of the CEO selection process, and for that matter the direction of U.S. Central. He said he is confident in the current board. With $913 million in assets, FirstCorp in Phoenix is a mid-size corporate that also is very dependent on U.S. Central. Pritts’ take on whether the three-tier system will survive is that whatever model is most efficient must be pursued. However his corporate has been very pleased with U. S. Central’s evolution, especially with its continued push to bring better investment rates to corporates. Pritts said FirstCorp is considering bringing on more investment expertise and possibly applying for expanded powers from NCUA, but U.S. Central’s investment products have become so competitive, he doesn’t know if it’s worth it. He cited U.S. Central’s SWAPs products for continuing to bring corporates better investment options. “U.S. Central has really stepped up. They still have the majority of our investments,” said Pritts. Pritts has also seen FirstCorp’s stake in U.S. Central’s Transferrable Certificate Program grow to nearly $200 million. “We consider those additional funds under management. It’s a win for us because it’s off balance sheet, we can pay the credit unions more,” said Pritts. Pritts’ corporate is to in line to convert to the new Symitar system, where delays have been cited as one potential reason leading to Dan Kampen’s exit from U.S. Central. Pritts said despite the delays, which can be expected in such a large project, First Corp is committed to moving to the new system. Greg Moore, CEO of the $1.3 billion Georgia Central CU, believes U.S. Central’s future is strong. Moore, who spent 16 years at U.S. Central, said he’s heard for almost 20 years now about someday U.S. Central’s role changing, but he doesn’t see it happening. “Everyone would suffer without U.S. Central. Since we’re a medium-sized corporate, we rely heavily on U.S. Central and our strategic plan is to continue to rely on them into the future,” he said. Georgia Central just recently started offering its member CUs marketable securities. It did this through U.S. Central’s ISI CUSO. Moore said the capital Georgia Central would have had to expend on its own to offer marketable securities would have been cost prohibitive. Even large corporates are attracted to ISI. At press time, one very large corporate was considering switching from its in-house broker/dealer CUSO to ISI. Currently, 16 corporates use ISI. Doug Wolf, CEO of Midwest Corporate, one of the smallest at $169 million, hopes U.S. Central doesn’t stop trying new things. “It’s going to be important who is hired for all the corporates. As far as the smaller and mid-sized corporates it’s probably going to be more important who is on the (U.S. Central) board. The real threat would be if U.S. Central would be limited in its role in developing products and services for the corporate system,” said Wolf. He said it’s no secret that some corporates felt some of U.S. Central’s tech products, such as Internet banking and bill pay, were not a good fit, but on the other hand, said Wolf, U.S. Central has had a lot of successful product launches. He noted U.S. Central’s Charlie Mac CUSO which allows CUs to free up their balance sheet by selling off auto and jumbo mortgages. He recalled chairing an Association of Corporate CUs task force on liquidity issues and the task force decided to put it in U.S. Central’s hands, and it followed through, said Wolf. “That’s an example of a venture that was really appropriate. The corporates had a mechanism, U.S. Central, that could develop the liquidity products,” said Wolf. Wolf believes the makeup of the board will have a big impact on U.S. Central’s direction and he said it’s fortunate the new governance model of U.S. Central gives different sizes of corporates a voice. “It’s great that we all get to vote on the seats for the very large corporates. It’s not them voting for each other. And the same goes for the smaller and medium sized corporates.” Wolf said other associations tend to let the large members vote amongst themselves for representation, but corporates were cooperative enough to put the voting in the hands of all corporates. “So as long as we don’t fall asleep at the wheel, U.S. Central won’t change directions. If it does, it’s all our fault,” said Wolf. Even large corporate CU CEOs like Bill Birdwell of Southeast Corporate said corporates could get along with a U.S. Central if they had to, but who would want to? Birdwell said U.S. Central has become so efficient in payment processing and sophisticated on the investment and lending side, that corporates would spend more money trying to fill U.S. Central’s shoes. Bob Siravo, CEO of the nation’s largest corporate, is a believer in the three-tier system and believes the corporate network needs a strong U.S. Central. “There is clearly a need for the aggregation and volume discounts we all can get, and U.S. Central can be that facilitator to aggregate products that all corporates need.” Siravo said of course WesCorp is not as reliant on U.S. Central as smaller corporates, but every corporate needs U. S. Central in some way, so any move to lessen its scope would harm the network. “I feel like I have an obligation to make sure U.S. Central stays strong for all of us,” said Siravo. Siravo, who is on the search committee, said although the committee hopes to work quickly in finding a new CEO, it will not sacrifice quality for speed. “We want to find the best person for the job,” said Siravo. At press time, Mid-States FCU CEO Dave Preter, chairman of U.S. Central, said the board remains committed to quickly finding a new CEO. He said it is on track to have a search firm present at the Aug. 31 U.S. Central Board meeting to present a timeline for the search. [email protected]

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