NASHVILLE — The merger between the $27 billion WesCorp and $1 billion VolCorp is back on track.
The merger was announced in late 2005, but has been stalled because of some regulatory hurdles in Tennessee, home to VolCorp. When VolCorp was created via legislation by the Tennessee government there was no provision for mergers. The Tennessee Department of Financial Institutions stated that it needed to see significant benefits for VolCorp’s credit unions in order to allow the merger to move forward.
Recently, the DFI informed VolCorp members that it has granted permission for the merger to continue. The clincher, said acting VolCorp CEO Rick Veach, is the new proposal submitted by the corporates that calls for full payout of VolCorp’s retained earnings to its members over a 20-year period. That equates to approximately $26 million to be paid out. Payouts will be based on membership shares and how long a credit union has been a member.
The next step is the member vote. “Within the next six to eight weeks ballots will go out. Members can vote by mail or in person. We haven’t determined the place yet,” said Veach.
VolCorp has 230 credit union members.