TALLAHASSEE, Fla. – Those mailings deluging you soliciting more money are not another credit card solicitation, but are corporate credit unions asking you to commit more capital to them, even after some of them have erased all of your prior capital.
Several of the corporates are staging so-called road shows in various towns as part of their capital-raising efforts, sometimes crossing paths and tapping the same credit unions. Southeast wrapped up its seventh town hall meeting last week, with sessions held throughout Florida and Mississippi.
“As part of the plan for moving forward and rebuilding a strong and viable corporate, we are asking members to contribute new capital as we feel having an ownership stake in your corporate is fundamental to our cooperative system and makes sure all members are treated fairly,” said Brad Miller, president of Southeast Corporate FCU, which currently is soliciting members to raise $80 million in new capital.
Southwest Corporate, which erased $725 million of member capital before being taken over by NCUA last September, is asking members to contribute as much as $100 million of new capital to a reconstructed corporate that would be merged with Georgia Corporate FCU.
New York credit unions are looking to raise new capital to reconstitute Members United Corporate FCU, which erased more than $600 million of member capital before it was taken over by NCUA in September.
First Carolina Corporate FCU is soliciting its members for $75 million in new capital. David Brehmer, president of the $2 billion corporate, said the new capital, “will allow us to maintain our current level of high quality products and member service. It will allow us to achieve a ‘well capitalized’ status under the new regulatory requirements for capital. And, it positions us to successfully operate as a value-added, independent corporate within a restructured corporate network and under new corporate regulatory guidelines.”
Several other corporate also are in the process of new capital raising, including Corporate Central CU, CenCorp CU, Corporate One FCU, Corporate America CU (who noted its capital-raising effort is voluntary) and MidAtlantic Corporate FCU.
The new capital calls are part of plans being submitted to NCUA that would require each of the corporates to hold 5% of tier one capital in perpetual contributed capital.
