Credit unions

ALEXANDRIA, Va.-The critical issue now for many credit unions, corporates and other observers is what form will the final NCUA corporate rule take, and when will NCUA release the overhaul to Part 704 of the FCU Act.

PHOENIX-It wasn't just the economy that chopped down some of the largest corporate credit unions. They can thank their desire to become large, and their lack of collaboration and competitiveness.

IRONDALE, Ala.-The failure of, and ongoing losses by, many of the corporate credit unions can be attributed to arrogance on the part of CEOs and boards from some of the biggest corporates, which played a role in the high concentrations in securities that contained risk, asserts Thomas Bonds.

WASHINGTON-While corporate credit unoins must accept their share of the blame for blindly investing their funds into US Central, which loaded up a significant portion of its mortgage investment portfolio with certain securities, it should be noted that natural-person CUs did the very same thing, reminded NAFCU President Fred Becker.

Among those who declined comment during the course of assembling interviews for this special report on corporate CUs were CUNA Mutual Group, Madison, Wis., which has built a large investments operation, and NCUA.

NEW YORK-The collapse of the housing market bubble is largely credited with creating most of the losses corporate credit unions, and their natural-person CU investors, have reported.

PHOENIX-There was no way to avoid being caught up in the mess, is how FirstCorp CU EVP and CIO Greg Harden summed up plight of most corporate credit unions.

WASHINGTON-Asset managers at corporate credit unions dutifully relied on past experience and rating agencies when buying securities during the bubble earlier this decade. But product innovation and a change in the mortgage market dynamic ultimately spelled disaster for many institutions, noted one analyst.

With most corporates operating with little to no capital, and with NCUA unveiling new rules later this year that many predict will lead to a "new business model" for corporates, in this issue Credit Union Journal asks, "How did we get here? What led to the corporate meltdown? Who is to blame, if anyone? And what could be ahead?"

BIRMINGHAM, Ala.-Blaming NCUA for the problems that befell the corporate system is easy to do, agree those within and outside the corporate network.

LAS VEGAS-What goes around, comes around, especially when it comes to corporate credit unions and crises. But this most recent crash of many of the corporate CUs ultimately will have to break that cycle, according to one person, who has a long history working with credit unions through various meltdowns and problems.

SCOTTSDALE, Ariz.-While some clearly point to the rating agencies as culprits, Bill McGuire sees corporate staff-the investment teams and leadership-as deserving of a great deal of the blame.

LAKE BLUFF, Ill.-It's going to cost natural-person credit unions $17 billion to bail out the corporates, a price tag that could cripple the CU movement if NCUA continues with its annual assessments.

LAKE BLUFF, Ill.-Corporate CUs are in trouble because they made a bet that did not pay off, and they failed to hedge their wager.

Credit Union Journal recently asked Corporate One CEO Lee Butke to outline the actions his CU has taken over the last three years that helped it mitigate losses.

LANSING, Mich.-Board members and senior management are responsible for what happens to their institutions, but state regulators aren't completely laying the blame for losses that damaged so many corporate credit unions at their feet.

LAS VEGAS – Moving forward, corporates will need to focus on two things: effectiveness and efficiency. Less certain is what is to become of corporates’ “toxic assets.”

LAS VEGAS – The future business model for corporate credit unions continues to be subject of debate, but most agree it will be substantially different. And at least one person is cautioning that natural-person credit unions had better start preparing for carrying a great deal more risk on their balance sheets.

BIRMINGHAM, Ala.-Corporate America CU, which is suing officers and directors of U.S. Central FCU for damages, last week issued subpoenas to Ernst & Young, RiskSpan, Callahan & Associates, Clayton Financial Services and PIMCO, as it seeks a courtroom accounting of the one-time $52 billion corporate's desperate attempts to shift capital accounts to cover burgeoning losses in its final days before an NCUA takeover.