NCUA reported its Office of Corporate CUs was monitoring the ACH outage at U.S. Central last week, but was unprepared to discuss the safety and soundness issues that may be called into question by the series of events that left to 2,200 credit unions across the country unable to transact any ACH business for approximately 48 hours.
"That is something we are looking at, but it is not something we can comment on at this time," said NCUA's Cliff Northup.
U.S. Central also declined to go into the matter, but noted that it is well aware of the seriousness of the situation. "That is something that is being discussed very intensely at the moment," said U.S. Central's Roger Dick. "We know this is a matter of great anxiety, and we are very chagrined about it. To say that we deeply regret what has happened is a dramatic understatement."
Dick said U.S. Central used e-mail, blast faxes and phone calls to keep its member corporates apprised of the situation, with e-mails going out nearly hourly at one point during the crisis.
Natural-person credit unions wanted to know why their respective corporates didn't have their own back-up systems in place so that even if U.S. Central's system went down, they would be protected.
Southeast Corporate, Tallahassee, Fla., for example, said it is investigating what sort of back-up system it may need to put in place. Western Corporate (WesCorp), San Dimas, Calif., on the other hand, had the ability to go to a back-up system but quickly realized that wasn't a viable option, according to Walter Laskos, manager of corporate communications..
"WesCorp used to process ACH in-house in the past, but we found we could offer the service at a better rate and more efficiently by using U.S. Central as a vendor," Laskos related. "When U.S. Central was struggling to resolve the situation, we looked at what we could do at our end, but we determined that if we went to a back-up system, in the end we'd risk the duplication of items, which would only do more harm than good in the long run. That's why we were very careful not to just go running with something. We told our credit unions that the best course of action was to be patient and let U.S. Central work through this."
