CUs Object To Corporate Limits
WEST PALM BEACH, Fla.-Credit unions are looking askance at NCUA's proposed amendment to its corporate rule that would restrict natural person credit unions (NPCU) from belonging to more than one corporate credit union at a time, although some CEOs support the concept.
"The proposed amendments to the corporate rule will only lead to the further elimination in the number of functioning corporate credit unions," suggested Art Kremer, CEO of Sharefax Credit Union in Cincinnati. "One thing is certain: If options to participate in corporate CUs are limited and costs to join become more expensive than processing through other alternatives, many credit unions will elect not to join any corporate credit union and the financial viability of the corporate system will be greatly impaired."
Brad Beal, president and CEO, Nevada FCU, Las Vegas, said he believes each CU should address how its own operational needs can be met. while also investigating and addressing any potential risk.
In Harrisburg, Penn., Greg Smith, CEO of Pennsylvania State Employees CU said he believes limiting CUs to membership in just one corporate "seems a little unfair," but that larger CUs such as his "will probably be able to obtain 'corporate' services outside the corporate credit union system more easily than the smaller credit unions."
Michael Poulos, president of Michigan First CU, Lathrup Village, Mich., told Credit Union Journal such limitations stifle the benefits of competition, and ironically comes at the same time NCUA is "focused like a laser beam on concentration risk,"
But some CEOs expressed support for limiting corporate FOM. Jeff Disterhoft, CEO of University of Iowa Community CU, Iowa City, offered, "Creating additional simplicity in the corporate market is probably a good thing for the NCUA and credit unions alike." As far as the membership fees and privately insured CUs, Disterhoff said ideally the new marketplace will mean the "most competitive options will rise to the top."