Count the $3.3 billion Corporate One Federal Credit Union among those who disagree with CUNA's Corporate Credit Union Task Force and Members United Corporate Federal Credit Union, who say the corporate business model is broken, and the system requires consolidation.
Instead, President/CEO Lee Butke told members in a March 5 letter, the NCUA "for the most part" is proposing good regulatory change that is manageable, provided the regulator makes a few "tweaks."
Butke said the corporate business model, which includes national fields of membership and direct competition, did not cause the current corporate financial situation. He also said he does not believe consolidation necessarily leads to economy of scale.
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"We have also seen that 'bigger' translates to systemic risk and 'too big to fail.' As I'm sure you'll agree, we don't want the entire credit union network to ever again be placed into this type of situation," he wrote in the letter, posted on Corporate One's Web site (www.corporateone.coop).
Corporate One lost a total of $70 million in U.S. Central capital in 2008 and 2009, and recorded an additional $42 million worth of investment OTTIs in 2009. However, the Columbus, Ohio-based corporate covered the losses with reserves, and closed out 2009 with $23.6 million in RUDE, $25.7 million worth of paid-in capital and $167.7 million in member capital shares.
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