SAN BERNARDINO, Calif.-One CEO contends that a lot of small western CUs are not unhappy about the fate of the former Wescorp and are not too concerned with their own future servicing needs.
"Earlier I was talking with some small credit union CEOs and they were saying that after the first of the year if they didn't capitalize, Wescorp said they would have to pay $5,000 a month to Wescorp to maintain their account," said Gregg Stockdale, CEO of the $35-million 1st Valley CU. "Wescorp really wanted to drive you away if you did not capitalize. So, as a small credit union, you don't do anything, hope Wescorp does not get funded and then they can't do the Draconian two-step on you. Someone else takes them over and all of a sudden you now have uninterrupted service. One day you are settling with what was called Wescorp and the next day you are settling with Alloya or something."
Stockdale just moved away from Wescorp to the Fed for item processing and uses Corporate America for a line of credit. "We saw that train wreck coming and got off the tracks. I wanted to see Wescorp succeed, but in looking at that [United Resources] business plan it was not good. I think that hurt their capitalization bid.
"Unfortunately with Wescorp there was no middle ground," said Stockdale. "You loved them or hated them. You drank the Kool-Aid and were in for buying 10 times capital which was through-the-roof unreasonable, or you just went somewhere else. About 70% of their customers decided to go elsewhere. What a huge vote of 'no confidence.' "
