The Iowa Credit Union League has given up on its Federal Reserve bid to buy an Arizona bank to help ease the corporate dilemma surrounding Iowa Central Corporate CU and related cost burdens facing small CUs.
Officials blamed the withdrawal of a September application with the Federal Reserve Bank of Chicago on regulatory constraints imposed by the Comptroller of the Currency which apparently "because of the economy" looked askance at a CU-run wholesale bank providing processing and investment needs to CUs.
"The said their preference was for a retail operation," explained Murray Williams, chief operating officer of the league in commenting on the banking agency's objection to the league's application for CrediCard National Bank of Tucson. Last month the Iowa League bid drew opposition from the Iowa Bankers Association arguing that trade group or tax exempt CUs had no legitimate business operating a bank.
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Williams said league staffers had "been going back and forth with the Chicago Fed and Comptroller officials" deciding last week to abandon the bank idea and pursue "other alternatives" which were not spelled out.
Management of Des Moines-based Iowa Central Corporate had long expressed fears about being merged out in NCUA's corporate restructuring and small CUs worried about losing cost-effective access to wholesale services.
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