CLEVELAND — While Lee Butke, president of Corporate One FCU, told Credit Union Journal that member support for Corporate One continues to be strong, he acknowledged the frustration credit unions are feeling, kicking off a session at the Ohio league's annual meeting here by asking, "Does anyone have rocks to throw at me?"
One attendee held up a shoe. "OK. That's fair," Butke said.
While the shoe probably wasn't on Butke's radar, it's likely he knew what was coming his way when he opened the floor to questions. Butke had just finished a presentation on the corporate's financial strength, when he began the Q&A and quickly found most of the Q's wanted to know even more about those financials. Ohio's credit unions also pressed for details on any corporate restructuring and the fate of their own member paid-in capital.
One of the first questions had to do with what happens to Corporate One's balance sheet in the event of a merger.
Addressing the possibility, Butke said, "I have no idea what the new rules will look like and no idea of how (the NCUA) intends to look at restructuring. I have been doing this for 30 years, and I always have a pretty good idea of what's ahead. In this case I honestly do not."
That led one CU leader to observe that corporate credit unions and the NCUA are in the middle of a problem that they are not quite sure how to resolve, but "have to take actions quickly to fix."
Butke spoke at length regarding Corporate One's finances, and emphasized that the organization has remained "transparent" as the corporate system's problems have developed. Butke shared that the Columbus, Ohio-based COFCU is on budget for the year and that undivided earnings from March '08 to March '09 are up over $21 million.
"Our reserves and undivided earnings are at $132 million," he said. "All of our capital at U.S. Central totals about $74 million. Which brings us down after March to an adjusted RUDE of $57.7 million. After writing down all of our U.S. Central exposure, and after writing down all exposure to the national credit union share insurance fund, we are still left with a fairly healthy reserve position."
Butke added that Corporate One has made a number of internal cutbacks, and placed some product development efforts on hold in an effort to manage costs. "It would be irresponsible now to be moving forward (with product development) without knowing the new rules," he said.
Butke has been keeping members apprised of how the bailout is affecting COFCU and natural-person credit unions through numerous town hall meetings across the state. He told Credit Union Journal that members' concerns continue to shift with the "fluid" nature of corporate rescue. Before the OCUL meeting, members were most interested in how to account for the assessment, he said.
