LENEXA, Kan. – Representatives of 13 corporate credit unions and CO-OP Financial Services said this morning they have abandoned efforts to buy the payments functions from U.S. Central FCU, the latest corporate initiative to fail.
The operation would have been known as PayNet and would have included U.S. Central’s automated clearing house, which processes payroll, vendor and international payments and services loans for credit unions, and automated settlement, which settles member share drafts, ATM, debit and credit card transactions, money orders, travelers’ checks, official checks, and billings for most of the nation’s credit unions.
Instead, the group said it determined it will continue to work cooperatively to create partnerships that will allow the uninterrupted flow of these products and services to the credit unions who receive them.
“The efforts to organize an ongoing corporate credit union to acquire U.S. Central Bridge operations was an effort that needed to be explored, but it has been determined that partnering with leading vendors within the payments industry is the appropriate course of action at this time,” said Brandt Peterson, executive vice president at SunCorp FCU and a member of the Organizing Council “Our primary goal always has been to ensure continuity of services to participating credit unions. We are much closer to a solution that will meet the needs of credit unions both in the short term and well into the future. The most important message for participating credit unions is that our solution will ensure minimal disruption to credit unions.”
The corporates participating in the payments initiative are: Alloya Corporate FCU, Catalyst Corporate FCU, CenCorp, Corporate One, FirstCorp, Kansas Corporate, Kentucky Corporate, Missouri Corporate, SunCorp, Southeast Corporate, TriCorp, VolCorp, Western Bridge Corporate FCU and CO-OP Financial Services and The Members Group, both payments processors for credit unions.
The failure of the payments corporate comes after WesCorp FCU and Southeast Corporate FCU have failed to raise enough capital to restructure under NCUA’s new corporate rules and are now seeking merger partners.
It also leaves in doubt a separate initiative by a group of corproates to buy U.S. Central's broker-dealer business, known as CU Investment Solutions Inc., or CSI, which was the only broker-dealer authorized to sell NCUA Guaranteed Notes, used to finance the corporate resolution, to credit unions.
