X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Much of the debate surrounding corporate credit unions has centered around the NCUSIF insurance premium hike. However, aggregate institutions are awaiting results from the NCUA’s April 6 deadline for comments regarding corporate restructuring.Chief among the NCUA’s goals is safeguarding corporates’ ability to provide core services to members regardless of market conditions. The NCUA’s ANPR questions whether payments systems should be isolated from other services.Isolating payment systems from investments could be done, said Western Corporate Federal Credit Union Executive Vice President of Member Services Tony Kitt; however, credit unions might not like the end result.“The business models we follow and the value they produce have been proven over time,” Kitt said. “Right now, we’re in the worst economic conditions I’ve seen in my lifetime, and we want to make sure everyone is protected. But that comes at a price.”For starters, the money needed to create the cushion would come from member credit unions, which are already strapped for cash.“It’s just not the most efficient use of funds,” Kitt said. “If you set aside a day or two worth of settlement to completely eliminate risk it will ultimately lead to a lower yield on a credit union’s market daily account, which will negatively affect a credit union’s bottom line. It’s a difficult position.”The value isn’t just isolated to payment systems. The corporate business model has fairly integrated payment and investments product offerings, Kitt said. And a big part of the corporate value proposition is serving as a primary financial institution, balancing the demands of payment systems, liquidity and investments, he added.A legal and operational firewall as suggested in the NCUA’s ANPR could potentially jam up the flow of funds, he added.–[email protected]

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.