WesCorp Bridge Seeks Recap As Part Of Re-Chartering Process
ONTARIO, Calif. – The Western States Corporate Realignment Task Force, which includes credit union leaders from eight Western states, said Western Bridge Corporate FCU should move forward to raise new capital from members and apply for a new charter as a stand-alone corporate credit union, putting aside, at least temporarily, plans to combine with Members United Bridge Corporate FCU.
“While recognizing that the proposed merger of the two Tier 1 corporates would provide the best option and should continue to be encouraged, the task force recommends natural person credit unions support the reconstituted Western Bridge by participating in its recapitalization and its services,” the task force said in a 17-page final report and recommendations.
To assist credit unions in evaluating their options, the task force said it has prepared materials, including a spreadsheet showing the capitalization expense credit unions would be subject to from a 15-to-25 basis point assessment and an illustrative pro forma pricing estimate for a credit union of $250 million in assets.
The task force previously had said a merger of Western Bridge Corporate FCU and Members United Bridge Corporate FCU would be the “most viable and financially-responsible option for these organizations,” and that such a merger should be implemented at the earliest possible date. However, the group acknowledged, Western Bridge and Members United Bridge currently appear to be precluded from merging by NCUA’s recently-adopted Corporate Consolidation Policy.
The final report stated: “The Task Force concludes that a system solution is absolutely necessary in order to ensure that credit unions are served by an organization that has the best interests of credit unions in mind. Credit unions must be in a position to control or influence those that provide them with essential corporate services. A non-system solution (i.e., competitors or the Federal Reserve) will leave credit unions vulnerable, both individually and as an industry.”
The task force said natural person credit unions should take several actions when assessing whether a stand-alone Western Bridge makes the most sense for their particular circumstances, including assessing attrition assumptions to affirm or disaffirm business model projections. Also, it said credit unions should request from Western Bridge a customized pro forma pricing comparison which: A. models the pro forma based on an individual credit union’s payments and settlements volumes; B. compares pricing for all contemplated providers (e.g., The Fed, a third-party bank, Western Bridge, and any other alternate corporate a given credit union is considering); and, C. compares service level, service quality, service gaps, product mix, and product limitations across all contemplated providers.
Separately, the task force said it has appointed Joan Opp, president of Stanford FCU, to succeed Dave Chatfield as chairman.