C. Myblog

Fast forward to 2013. The recession that came to a head in 2008 has passed and the corporate credit union system was stabilized and has been viable for the last few years. The industry is now experiencing a similar crisis and needs to be stabilized once again. Who should be responsible for the cost of the stabilization?

March 3, 2009
Showing 6 comments
  • Greg Manweiler

    If we fast forward to 2013. The recession that came to a head in 2008 has passed and the corporate credit union system was stabilized and has been viable for the last few years and the industry is now experiencing a similar crisis and needs to be stabilized once again. Then, credit Unions should be responsible for the cost of the stabilization. Corporates should only exist to help natural person credit unions do a better job for all natual person Members. Credit Union Corporates are governed by boards of natural person CEO’s today and these Boards should bear the responsibility of keeping the corporates working for their constituants.

    In the future we may need more expertise on these Boards from natural person credit unions or elsewhere, that have the technical knowledge that is required to understand the workings of the corporates. People from outside the talent pool of credit unions need to be injected into the mix, people that understand the risks involved with complicated investments and the like.

    Yet, once again, Corporates should not fall over each other to market for market share. Corporates should be limited by the number of charters and should use resources to improve credit union services, not just get bigger for the sake of size.

    Perhaps the Corporate system of the future should be comprized of six small regional payment system corporates and two large complicated service corporates that work cooperatively toward service improvements? I see no noeed for 26? corporates in the future.

  • Greg Manweiler

    If we fast forward to 2013. The recession that came to a head in 2008 has passed and the corporate credit union system was stabilized and has been viable for the last few years and the industry is now experiencing a similar crisis and needs to be stabilized once again. Then, credit Unions should be responsible for the cost of the stabilization. Corporates should only exist to help natural person credit unions do a better job for all natual person Members. Credit Union Corporates are governed by boards of natural person CEO’s today and these Boards should bear the responsibility of keeping the corporates working for their constituants.

    In the future we may need more expertise on these Boards from natural person credit unions or elsewhere, that have the technical knowledge that is required to understand the workings of the corporates. People from outside the talent pool of credit unions need to be injected into the mix, people that understand the risks involved with complicated investments and the like.

    Yet, once again, Corporates should not fall over each other to market for market share. Corporates should be limited by the number of charters and should use resources to improve credit union services, not just get bigger for the sake of size.

    Perhaps the Corporate system of the future should be comprized of six small regional payment system corporates and two large complicated service corporates that work cooperatively toward service improvements? I see no noeed for 26? corporates in the future.

  • c. myers

    Greg-

    Thanks for posting the inaugural comment to this blog! We hope others will share their thoughts as well. You suggested that what is needed are fewer corporates that might include six smaller regional payment systems corporates and two large complicated service corporates. We’ve talked with others who feel the same as you and, as you might suspect, we’ve talked with others who have different ideas.

    At this point, we are debating the benefits of splitting payment systems from liquidity/investment services. We have also been weighing the pros and cons of establishing regional institutions vs. a national institution with regional offices.

    One follow up question: For the large complicated service corporates, could you expand on the reasons for two of these vs. going with the same six regions that were suggested for payment systems corporates?

    The other challenge we have been looking at in this area is that while some corporates are in dire straits, there are other corporates that don’t appear to be broken. If some of these corporates do not pose a threat to the NCUSIF, should they be allowed to continue, or does a new regional or national system require replacing all corporates, good and bad?

    We appreciate the thoughts from you and others on these tough issues.

  • c. myers

    Greg-

    Thanks for posting the inaugural comment to this blog! We hope others will share their thoughts as well. You suggested that what is needed are fewer corporates that might include six smaller regional payment systems corporates and two large complicated service corporates. We’ve talked with others who feel the same as you and, as you might suspect, we’ve talked with others who have different ideas.

    At this point, we are debating the benefits of splitting payment systems from liquidity/investment services. We have also been weighing the pros and cons of establishing regional institutions vs. a national institution with regional offices.

    One follow up question: For the large complicated service corporates, could you expand on the reasons for two of these vs. going with the same six regions that were suggested for payment systems corporates?

    The other challenge we have been looking at in this area is that while some corporates are in dire straits, there are other corporates that don’t appear to be broken. If some of these corporates do not pose a threat to the NCUSIF, should they be allowed to continue, or does a new regional or national system require replacing all corporates, good and bad?

    We appreciate the thoughts from you and others on these tough issues.

  • Joe Stevenson

    Who should pay if there is another crisis is a good question. I believe as the corporate system is restructured the credit unions using the services should be the “insurer”, not the whole credit union industry. This may cause the thousands of credit unions using the services to ultimately go out of business – but that’s life!

    Maybe it will cause them to pay more attention and not be so quick to take on unmanageable risk.

  • Joe Stevenson

    Who should pay if there is another crisis is a good question. I believe as the corporate system is restructured the credit unions using the services should be the “insurer”, not the whole credit union industry. This may cause the thousands of credit unions using the services to ultimately go out of business – but that’s life!

    Maybe it will cause them to pay more attention and not be so quick to take on unmanageable risk.

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