Twelve members of Members Gateway, an Indiana-based innovation CUSO, has advised the NCUA to perform a complete overhaul of the corporate system.Led by Chairperson Dennis Pierce, CEO of the $1.6 billion Community America Credit Union, the Corporate Credit Union Stabilization Partnership advocates only three corporate entities: one corporate that provides short-term investments and liquidity services, a broker-dealer that provides long-term investments, and a CUSO that handles long-term liquidity products like loan securitizations and participation loans.The 105-page plan claims it could save the credit union industry as much as $285 million in annual expense savings. Additionally, the remaining stripped-down corporate would not only break even, it could generate net income as high as $164 million annually."One of philosophies I've tried to live by is if you want to complain about something, you should be willing to put in the time and effort to make it better," Pierce said. "So using Dan [Kampen] as a resource, we all talked it through and said if we could start all over again, what would we want the corporate system to look like?"Kampen is president/CEO of The Rochdale Group, a consulting firm that provided project management services, crunched numbers and offered technical expertise to the group. Kampen was also president/CEO of U.S. Central Federal Credit Union from 1997 to 2005."There are a lot of redundancies in financial services," Kampen said. "We've seen the consolidation of ATM networks, the Federal Reserve system, and Federal Home Loan Banks, so it would make intuitive sense that there should be consolidation in corporates as well."Pierce agreed, saying today is a much different world than when the corporate system was born."There aren't as many geographical restrictions limiting how money is moved today," Pierce said. "Electronic processing makes single sourcing possible. I think it's a very do-able process."Both men said they envision one centralized processing office but with regional sales and service teams located strategically across the country.Pierce said although the Stabilization Partnership is composed of nearly all $1 billion and up credit unions, the plan was written with small credit unions in mind."Corporates have more value for small credit unions as large credit unions have more options available to them in the market," he said.A stripped down corporate providing term investments and lending products under 90 days, along with settlement and correspondent services could operate in the black, Pierce said, but only with massive consolidation. Assuming the new corporate system maintains current market share, the three-pronged attack would produce a $164 million net income, reduce fees charged to natural person credit unions from $70 million to $26 million annually, and reduce personnel expense from $214 million to $62 million.A similar plan, with four liquidity corporates, along with the proposed broker/deal entity and long-term liquidity CUSO, would still turn a profit, reducing system expenses by $176 million and earning a net income of $55 million.Pierce said the group, which formed last November after ratings agencies lowered corporates' creditworthiness, has met with the NCUA, trade associations and credit unions of all sizes outside the group, and received positive feedback."This process needs to be a three-legged stool: the NCUA, corporates and credit unions," Pierce said.Pierce said the group also addressed the difficult aspects of the plan, including the elimination of corporate jobs. "We'll have to figure out some mechanism to consolidate these entities in a manner than would recognize there are people and families involved, and how they can be accommodated."Other Stabilization Partnership members include the $2 billion Bellco Credit Union, the $3.2 billion Bethpage Federal Credit Union, the $3.6 billion ESL Federal Credit Union, the $807 million NuUnion Credit Union, the $3.3 billion Pennsylvania State Employees Credit Union, the $2.7 billion San Antonio Federal Credit Union, the $4.1 billion Star One Credit Union, the $1.9 billion State Employees Credit Union of Maryland, the $1.7 billion State Employees Federal Credit Union, the $1.4 billion Texas Dow Employees Credit Union, and the $1.5 billion Wright-Patt Credit Union.–[email protected]