No More Putting All Eggs In Corporate Basket

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DES MOINES, Iowa-Natural-person credit unions have relied on corporate CUs to be a clearinghouse for capital. The problem, noted Jeff Russell, EVP of The Members Group, is that credit unions eventually became overly reliant on that structure.

"The industry still needs the solutions the corporates provided, so the challenge is to reinvent the structure to meet the challenges of today," he said. "There are a number of roles corporates have played, from settlement services to clearing wires to overnight accounts. But one thing that often gets overlooked is they are a source for lines of credit for CUSOs beyond what the individual credit unions that owned the CUSO could provide."

Sensing that void, The Members Group has launched a CUSO called CU Structured Finance, run under the umbrella of subsidiary company TMG Financial Services. The CUSO's purpose is to match credit unions with liquidity, especially CUSOs that need funding for their growth.

"It will take many players to replace what the corporates did," he said. "Credit unions, CUSOs and groups of credit unions will have to come together. There are some things the new regs just don't allow the corporates to do."

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Corporate credit unions