The two corporates announced in September that the merger was off the table. They cited the time and sheer complexity involved in combining two such large corporates. Southeast in particular was concerned about losing key staff members who were vulnerable to leaving because the merger made their futures uncertain.

Southeast put plans on hold to build out a new 30,000 square-foot headquarters while the merger was being considered. With the merger now off, Southeast will build out the facility.

Another merger still in the works in 2006 is between the nation's largest corporate, the $27 billion WesCorp, and the $1 billion VolCorp. The deal stalled because of regulatory issues on the state level in Tennessee, but was recently given a boost when the state regulator informed the corporates that they can now pursue the merger. The state regulator had asked to see "compelling" benefits for member credit unions. WesCorp and VolCorp went back to the drawing board and came up with a unique plan to return capital to VolCorp members over a 20-year period.

If the merger had succeeded, Birdwell would have likely become CEO of the new corporate. Southwest resumed its search for a new CEO, and promoted SVP/CFO John Cassidy to the spot. Southwest has a vacancy in the corner office because long-time CEO Francis Lee assumed the CEO position at U.S. Central Credit Union, taking over for Dan Kampen who departed U.S. Central in 2005. Kampen did make news in 2006. He is one of three founders of The Rochdale Group, a new consulting firm. Rochdale made a major deal in '06 by acquiring venerable credit union consulting firm Counter Intelligence Associates.

Other major corporate CU news came in late October with the departure of Mike Canning as executive director of the Association of Corporate Credit Unions. Canning, who led the ACCU since late 2002, made significant changes at the ACCU in his short tenure. He increased it from a one-person to a three-person shop and led the way to developing the Compliance Clearinghouse. It is designed as a single source for corporates to get answers on compliance questions. He was able to push through a 33% dues increase to fund the Compliance Clearinghouse and the added staff. The ACCU's 2006 budget is $800,000.

Finally, news breaking late in the year surrounding risk-based capital surprised many. The ACCU announced that it was shelving its risk-based capital plan for now. The corporates were publicly pushing for exploring risk-based capital and seemed to have solid support from NCUA. The prime reason for not pursuing it was problems make an apples to apples comparison between corporates and retail institutions. In particular, some corporates would have trouble meeting Basel's leverage ratio based on the way term paid-in-capital and perpetual paid-in-capital are counted.

Corporate leaders almost unanimously agreed that they want to move to a risk-based system, but that getting a carveout at this time from Basel would be too difficult. The ACCU will continue to pursue capital reform, but its time horizon has been pushed back. –[email protected]