Wis. Corporate's Plans To Enter Minnesota On Hold Until Legal Issues Settled

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Pending legal concerns have put Wisconsin's Corporate Credit Union behind schedule, but CEO Mark Schroeder remains confident that its plan to open an office in Minnesota will not falter.

Schroeder said it's only a matter of time until legal advisors hash out the details of the move. One question is whether Central Corporate has to abide by Minnesota's statute requiring corporate credit unions to be federally insured.

How much time, he said, is anybody's guess.

Corporate Central announced plans to open an office inside NWA Credit Union in Bloomington, Minn., shortly after learning that a merger was pending between Minnesota Corporate and Illinois-based Mid-States. In December of 1999, Mid-States merged with Indiana Corporate FCU.

Schroeder said the pending merger made it clear to Corporate Central's board that the only way to remain viable was to expand its own service area. Still, Schroeder said, Corporate Central officials "have been working with both Mid- States and Minnesota Corporate (for) ways we could cooperate and work together."

Under the current plan, Corporate Central and the newly merged Mid-States Corporate FCU-under the direction of its present leader Dave Preter-will compete for the same business.

"We believe that Corporate Central has the programs and people to serve Minnesota credit unions most effectively, Schroeder said. "(Minnesota and Illinois corporates) are looking for the merger to go through, our direction is to provide another alternative for credit unions in Minnesota."

The new Mid-States Corporate FCU will have about $5 billion in assets, making it the third largest corporate in the nation. Schroeder said he doubts Corporate Central's state charter will have any legal bearing on the move.

"We feel that the amount of federal insurance offered doesn't give most credit unions significant protections," he said, noting that most of its members have assets in the millions. The federal government only insures $100,000 on million dollar accounts.

Besides, he added, having a state charter doesn't preclude Corporate Central from abiding by federal regulations. Schroeder said while Corporate Central already has some CU business from Minnesota, only in recent years has its marketing become more aggressive.

"We have had members in Minnesota for a few years, by we haven't really aggressively marketed in that direction as a courtesy to Minnesota Corporate Credit Union."

Besides, he said, it's no longer a big deal for corporate CUs to compete. "Other corporates are advertising to our credit unions all the time," Schroeder said. "Competition is about making things better for the credit unions."

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