BURLINGTON, Mass. – Saying the leadership at U.S. Central FCU has "failed the credit union industry," the top executive at EasCorp FCU today called for the removal of management at U.S. Central, the corporate credit union for corporate credit unions.
In a call echoing other corporate credit unions, EasCorp FCU Jane Melchionda called on U.S. Central to take immediate action and to respond by the end of business Friday.
U.S. Central is owned by EasCorp and 26 other corporate credit unions, which are owned, in turn, by individual credit unions.
"The financial and public relations costs are now being understood by natural person credit union officials, and they are rightfully disappointed and angry. The industry’s confidence in U.S. Central and corporate credit unions is perilously low," said Melchionda in her letter.
She was referring to the $1 billion capital infusion By NCUA into U.S. Central, necessitated by a $1.1 billion loss for last year.
Melchionda said member credit unions of EasCorp insist that U.S. Central disclose the extent of future losses and to identify "what team was responsible for causing them, and what team will be managing U.S. Central through this crisis." She added that member credit unions are insisting "that a new team take over before engaging in meaningful new business with EasCorp (or any other corporate credit union) again."
Melchionda letter states that EasCorp member credit unions are "adamant that corporate credit union representatives to the U.S. Central Board of Directors have no similar investment issues at their respective corporate credit unions."
The U.S. Central board includes chairman Joseph Herbst, who is CEO of Members United Corporate FCU, which is sitting on large losses, and Bob Siravo, CEO of WesCorp FCU, which also has large losses.
Also serving on the board are Charles Thomas of West Virginia Corporate CU, David Brerhmer of First Carolina Corporate, Larry Eisenhauer of Kansas Corporate and Jim Hansen of VACORP. Those corporates have generally avoided the losses others are reporting.
