PCSU Financial Services has announced a dividend for its member credit unions of $45.4 million, an amount it claims is the largest dividend from any CUSO ever.
The payment processing CUSO, headquartered in St. Petersburg, Fla., has posted a dividend of more than $20 million in each of the last five years. In addition to the dividend, financial savings of $12.6 million were passed along throughout 2008 in the form of lower costs, creating a total benefit to members of more than $58 million for the year, the CUSO reported.
PSCU reported that $35 million of the distribution came from the sale of Visa and MasterCard stock. PSCU passed all the proceeds of the stock sale back to its member credit unions.
The CUSO also reported that its revenue for the year, absent the stock sales, came in at $633 million, more than 12% over 2007. PSCU attributed the gain to more use of its core payment processing products and services.
“The root of our financial accomplishments is greater usage of our core services: credit, debit, online bill payment and contact center support. We also posted dramatic growth in member satisfaction and overall leadership within our market segments. And we achieved one of our key objectives, financial value creation of $61 million, through price reductions, dividends, proceeds from stock sales and net income,” said David J. Serlo, president/CEO of PSCU Financial Services. He added that the CUSO is looking to relieve some of CUs' financial pressures.
“This difficult economy can be the perfect storm for our industry. It's time for credit unions to expand programs and offer new services that drive members to make their credit union their primary financial institution. That loyalty will boost revenues and reverse the current trend of decreasing return on assets.”
The cooperative reported that it processed more than 950 million credit, debit and bill payment transactions, a 17.4% increase over 2007. The total number of accounts serviced by the company grew by more than one million to 13 million, representing an 8.6% jump over 2007. In addition, the cooperative's contact center handled 16 million calls, or 1.7 million more calls than the previous year.

Breach of Contract Suit
Hits Guardian CU

The Central States Mortgage Co. bankruptcy in Wisconsin has had more legal fallout in the form of a breach of contract claim against one of the 25 credit union investors.
“It's really just a frivolous suit without any merit whatsoever,” declared Steve Wesson, president/CEO of the defendant Guardian CU of West Milwaukee. Wesson is accused in state court of violating a management pact and retention bonus deal relating to the planned merger with the $190 million Prime Financial CU of Cudahy, another Central States investor.
The suit brought by Richard Koenig, a former chairman of Central States and ex-president/CEO of Prime Financial, contained untruths, said Wesson regarding the proposed 2008 merger between the two Milwaukee-area CUs.
Media reports said Koenig had signed a 10-year contract with Guardian CU to hold a top management slot in the new CU and proposed CUSO, a point denied by Wesson suggesting it was ironical since the suit is “being brought now, five months after we ended the merger talks.” Koenig was not immediately available for comment.
Both CUs had suffered loan losses relating in part to the March 9 Central States collapse, but Wesson said his $280 million CU is now in better shape though it did lose $2.3 million last year. Prime Financial, which lost $8 million in 2008, was conserved by the NCUA and state regulators in February.