ALEXANDRIA, Va. — NCUA announced this afternoon it awarded CO-OP Financial Services, the credit union-owned payments company, the right to acquire the assets of U.S. Central’s Corporate Network eCom, the failed corporate’s online and mobile payments services.
The payments systems are all that remains of U.S. Central, the one-time $52 billion corporate, after NCUA liquidated its vast investments portfolio.
NCUA selected CO-OP as a result of a competitive bidding process for the Lenexa, Kan.-based U.S. Central operations conducted in October. CO-OP is a cooperative of more than 3,000 credit unions across the country.
"The bill pay services of eCom are a perfect extension of the e-commerce business line of CO-OP Financial Services, which already includes the online CO-OP Bill Pay and advanced CO-OP Mobile banking solution," said Stan Hollen, president of CO-OP. "The transition of eCom services to CO-OP is so complementary that eCom clients will not need to change payment processing platforms as a result of the ownership change."
The action comes a day after NCUA awarded the remaining assets of failed WesCorp FCU to Catalyst Corporate FCU, recently formed by the merger of Southwest Corporate FCU and Georgia Corporate FCU.
"Today's action is another important step toward the goal of winding down U.S. Central Bridge," said NCUA Board Chairman Debbie Matz. "In implementing the corporate resolution plan, NCUA has successfully continued payment services to consumer credit unions without interruption, and managed to the lowest possible long-term cost. The selection of CO-OP is also consistent with our preference, wherever feasible, to find solutions within the credit unions system. This deal achieves all of these objectives."
CO-OP was originally part of a consortium that included a dozen corporate credit unions that tried to form their own entity to buy the U.S. Central payment assets but the group failed to raise adequate capital, killing the project.
The credit union-owned CUSO has emerged as one of the most important electronic switches for credit unions, operating the largest network of credit union-owned ATMs and a separate network of more than 2,200 shared branches.
NCUA anticipates that the transition of eCom's online and mobile bill pay clients to CO-OP should occur seamlessly, as the transaction requires no change in the processing platform. NCUA expects to finalize the sale of eCom’s services to CO-OP within 90 days.
All eCom employees will become employees of CO-OP Financial Services and continue to service eCom online and mobile bill pay clients. The organization was founded in 1999 and today more than 750,000 credit union members use at least one of its three electronic bill payment solutions. The flagship MemberPay enables members to receive, view, manage and pay all of their bills from a credit union website.
Going forward, CO-OP will communicate directly with eCom's clients about the transition process.