COLUMBUS, Ohio — The $2-billion price tag corporates will shoulder in charging off membership capital shares and paid-in-capital at U.S. Central has members of Corporate One FCU concerned.
"That has caused most of the questions from our members," said Corporate One FCU President Lee Butke.
The Columbus, Ohio-based Corporate One moved quickly to address those concerns, telling Credit Union Journal at press time that it hoped to post information on its website soon that shared that even in a worst-case scenario in which Corporate One had to write off all of its investments with U.S. Central, it would still show positive reserves.
"At the end of February, our total reserves and undivided earnings were $127.9 million," Butke shared. "We had $25.7 million of paid in capital, and $115.9 million in membership capital shares, for a total capital position of $269.5 million. At worst case we would write down about $74 million in U.S. Central capital, leaving us with positive reserves and undivided earnings of $54 million and total capital of over $195 million. That's a positive number for us."
As the problems with the corporate system have worsened over the last few months, Butke said he has heard a message of support from his member credit unions. But that support could be strained with the latest news and the costs that are rushing downhill.
"Without question our members are upset that they have to take these losses," Butke said. "But in the same breath they will also say they continue to support Corporate One and ask how they can we help mitigate these losses. But there needs to be a recognition and understanding on our part, as well, that these are very significant losses that the corporate network has put on these folks. I am amazed at their desire to still be part of this cooperative solution to lower the cost."
Butke feels strongly that natural-person credit unions have to be a large part of the solution to the corporate crisis. "We are encouraging our credit unions to respond to NCUA's ANPR. The credit unions themselves should be as big a part of the solution as the regulator is. There are credit unions of all shapes and sizes, and I think the needs of all 8,000 need to be balanced out at this point."
