WesCorp, VolCorp Merger Hits Glitch Over Return To CUs
The proposed merger between Volunteer Corporate Credit Union (VolCorp) and California-based Western Corporate FCU (WesCorp) has hit a "bump in the road." Bruce Fahnestock, CEO at VolCorp, said the state regulator has requested the corporate pay out more to members from reserves and undivided earnings as part of the merger than NCUA said it will permit.
The merger proposal calls for approximately $4 million to be returned to natural-person CUs. Fahnestock said he does not expect the merger will be scuttled, but simply delayed as the corporate works with the two regulators to arrive at a figure. He noted the Tennessee Department of Financial Institutions did not provide a figure for how much more it wants to see returned to current Volcorp members.
Because VolCorp was formed by the state legislature, there are no rules on mergers. Instead, VolCorp must demonstrate a "compelling benefit to VolCorp members" in order for the state regulator to approve any deal. "We're trying to find out where each of the regulators are at this time," said Fahnestock. "We would still like to have this done by mid-Summer."