WESTMINISTER, Colo. – NCUA has given preliminary approval to a group of 14 corporate credit unions to acquire the payments operations and assets of defunct U.S. Central FCU to create a new national payments company for credit unions.
The new corporate operation will not provide any liquidity, nor any investment products and services. It will consist of 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.
The new corporate will be structured as a CUSO and will raise new capital from the members of U.S. Central. The level of capital has not yet been determined.
The group will submit formal organizing documents and a charter application to NCUA’s Office of Corporate CUs. The chartering process is expected to run through the summer.
“The payments corporate will rely on known expertise and proven technology, limiting risks associated with moving to another service provider and continuing to minimize credit unions administrative burden through the use of existing delivery and support structure,” said Brandt Peterson, executive vice president and SunCorp FCU, who is helping to organize the initiative.
