NCUA Dissolving U.S. Central FCU
LENEXA, Kan. – NCUA is expected to sell the major non-financial assets of U.S. Central FCU – consisting of the payments systems services and the CU Investment Solutions Inc. broker-dealer – to two separate groups of corporate credit unions in a no-bid process, as part of the dissolution of the one-time $52 billion corporate credit union.
Two groups have submitted bids to buy the separate U.S. Central operations and continue to operate them for the benefit of credit unions, NCUA said. A price for the two assets has yet to be determined.
NCUA, in seeking a member-driven solution to dissolution of U.S. Central, said it has a “fiduciary responsibility to dispose of assets and liabilities in the best interest of federally-insured credit unions, but this does not require an auction process,” an agency official told Credit Union Journal yesterday.
The separate sales of the two operations are expected to be completed by October.
A group of 14 corporates has proposed buying the payments assets and continuing the operation as a national CUSO. 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.
NCUA, which took over U.S. Central in March 2009, has been liquidating the former corporate giant over the past nine months by selling its investments. As of April, U.S. Central had assets of $7.3 billion, $5 billion of it cash holdings at the Federal Reserve Bank of Kansas and the majority of the remainder consisting of $1.9 billion of stock in the Central Liquidity Facility.