COLUMBUS, Ohio-In the next five years, Lee Butke of Corporate One expects "a few" more mergers among the remaining corporate CUs.
In the meantime, many corporates are focused on assisting natural-person CUs with revenue-driving strategies, along with ways to cut expenses.
"The requirement of full-fledged, detailed enterprise risk management is going to be a big burden for some folks," Butke assessed. "Costs of compliance can be a difficult thing for some organizations."
Jay Murray, president and CEO of Mid-Atlantic Corporate FCU, Middletown, Penn., concurred with Butke.
Ongoing Focus On Efficiencies
"I believe there will be more consolidation," Murray predicted. "It is a tough environment for some corporates to live in. I do not know what the number is going to be, but there will be fewer corporate credit unions and fewer natural-person credit unions."
David Brehmer, president and CEO of First Carolina Corporate CU, Greensboro, N.C., said he is pleased that the corporate system has stabilized "quite a bit," but also feels there will be more consolidation.
"But that will be driven by a desire to increase efficiency rather than because of major losses," Brehmer said.
All three CEOs had optimistic outlooks regarding their own corporates. Butke said Corporate One plans to "jump start" mobile banking for its member credit unions.
"We are going to approach this as we do any product-with a bifurcated model," he said, explaining that some CUs are fully capable of handling technology implementations, but others need help. "We will help drive mobile person-to-person payments. We are really good with ACH, and image capture is something we do every day with Check 21, so we will integrate those two together."
Debit cards are an "effective revenue piece" for credit unions, Butke added, stating Corporate One we will be "pushing those," especially on what he termed "modest-sized" credit unions.
"We plan an aggregation model to get better cost," he said.
Mid-Atlantic's Murray expressed a concern about new regulations that place restrictions on the length of time corporates can invest.
"The difficulty with that two-year window means it takes a lot of work on the part of our chief investment officer to find good investments," he said. "Also, when it comes to borrowing, the length of time is restricted to 30 days. That has not been a problem as we are liquid, but there are changes in how a corporate operates to fit those regulations."
Cutting Back-office Expenses
Murray said Mid-Atlantic is working with CUs to consolidate their back-office services, including core processing, call centers and collections-all in the name of driving down the cost of running a credit union to help margins.
"With these programs, smaller-sized credit unions can gain scale," he said. "We are directly working with credit unions to help them come up with solutions. In some cases, Mid-Atlantic is directly handling the work, in other cases we are working with third-party vendors and helping negotiate better buying power."
