SOUTHFIELD, Mich. — Member credit unions of CenCorp Corporate Credit Union can expect to see some of the capital they contributed over the years in the $2.6 billion corporate returned to them.
CenCorp said today that it will issue a refund of $20 million in Member Capital Share Deposit accounts on July 1 to its 400 credit union members. It is a rare occurrence when a corporate returns capital to members, but CEO Bill Walby said the corporate decided it was the most effective thing to do with the money.
"We took a look at our capital level, looked at what we expect to need going forward and decided we had ample capital to fund everything we were doing and planned on doing. We asked ourselves if we are using the capital as effectively as are members could, and decided this was the best use for it," said Walby.
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CenCorp has 10% capital, and even after this distribution, the level will still be in the 8.5% range.
Walby said CenCorp's members deserve this payout. "I think it's a great thing. It's an organization they contributed to throughout the years and it's their chance to get some of that capital back," said Walby.
CenCorp also announced that it is reducing the required MCSD for individual members to the lesser of 0.7% of year-end assets or $700,000 (from 0.8% of assets or $800,000 currently). The current rate paid on MCSDs at CenCorp is 6%.
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