Western Bridge Corporate Makes Plans To Stand Alone (For Now)
TORRANCE, Calif. - If Western Bridge Corporate and Members United Bridge Corporate are to eventually merge, the biggest hurdle will be getting NCUA to approve the risk controls of the combined organizations.
That's the forecast from Jim Updike, chairman of the Western Bridge advisory committee and president of the $540-million Honda FCU. "I think NCUA is looking at things such as dependency of systems and backup, which I believe is their greatest fear. For example, you are doing item processing for thousands of credit unions and something happens to your system. You will have to be able to demonstrate to NCUA and to your members that you have the systems in place to mitigate risk."
Updike told Credit Union Journal that decisions regarding any merger plans between the two bridge corporates will be left to the stand-alone entities once they move out from under bridge status. "Our (advisory board) discussions have been about the need to get out from underneath the bridge and put together a model that makes sense for Western Bridge members going forward, whether we merge or not."
The member advisory committee for Western Bridge voted overwhelmingly to apply to NCUA to re-charter the one-time $34-billion corporate credit union in San Dimas, Calif. Both Western Bridge and Naperville, Ill.-based Members United are being run under conservatorship by NCUA, which has stripped out all of their investments and is liquidating them as part of the corporate resolution. Mid-February, credit unions in New York (which is served by Members United as the result of an earlier corporate merger) voted to pursue a re-chartering of Members United, which they helped create.
The Western Bridge panel vote comes a week after NCUA warned off the two failed corporates from merging before they shed their bridge status and are re-chartered as proper corporates. It also came a day after NCUA issued new corporate chartering guidelines (see related story).
The next step will be for the Western Bridge advisory executive committee to engage NCUA's Office of Corporate CUs to gain support of the business plan to be submitted before March 31. Updike said Western Bridge will have no trouble meeting the tight deadline.