WESTERVILLE, Ohio – The FDIC moved swiftly to reimburse credit unions that had invested in IndyMac certificates of deposit through Primary Financial’s SimpliCD program, Credit Union Journal has learned.
Paul Hixon, marketing representative for Primary Financial, based here, said the deposit insurer paid Primary Financial – a CUSO that was founded by Corporate One and currently is owned by all the corporates – on Wednesday. He told Credit Union Journal funds should be disbursed into credit union accounts by Friday.
“I am very pleased it happened so quickly,” Hixon said.
SimpliCD (pronounced “simplicity”) is a brokered certificate of deposit. Each CD is insured by the government up to $100,000, which typically is the amount a credit union will invest. According to Hixon, if a credit union has $1 million to invest, the SimpliCD program places it in 10 financial institutions, and helps it manage the accounts.
There are about 3,800 credit unions that have agreements with Primary Financial to place certificates in their names, and the CUSO has active investments placed on behalf of at least 2,500 of those. Current outstandings are about $6.5 billion.
Each corporate CU sells to its own natural person CU members.
