The head of Alabama-based Corporate America Credit Union, Thomas D. Bonds, is speaking out this week on recent corporate developments, venting some strong views and projections.
For one, the president/CEO of the $3.5 billion Birmingham CACU acknowledged that while it ranks among stable and unconserved corporates, his corporate has had merger discussions with unidentified peers and has hired an international consulting firm to assess its ability to pursue partners. A major conclusion: Consolidation would work without impairing CU services though no agreement is at hand.
On another issue, Bonds said the move by some industry segments to look at banks, including the recent Iowa proposal with the National Cooperative Bank, is probably unwise and could result in banks using CU service income to lobby against the tax exemption. “Doing business with banks is dealing with the dark side,” he argued.
Bonds said also NCUA has acted prudently in its oversight role on the corporates and in protecting the public but slips where it comes to transparency on terms in selling assets of the conserved corporates.
“I am a little confused by the lack of transparency with which NCUA is handling the conservatorships,” Bonds wrote in CACU’s November newsletter. The industry, he maintained, “has an interest in NCUA’s actions as ultimately it is all credit unions, not NCUA that will be paying the tab.”
NCUA, he wrote, “has the responsibility to dispose of the ‘good assets’ of the failed corporates,” but to reduce future assessments, the agency should “utilize a ‘least-cost’ method allowing interested credit unions and corporates to bid for the systems and assets of the failed corporates.”
It appears though, he went on, that NCUA favors a process whereby the members of the failed corporates “can form a new corporate and simply take over the ‘good assets’ without paying market value for them.”
Asked for reaction to CUNA’s Corporate Summit last weekend and the CUSO proposal advanced by the Association of Corporate Credit Unions, Bonds said he has not seen a report on the meeting conclusions but “would be interested in reviewing their thoughts.”
“Nobody from CACU was invited even though we are the largest, un-conserved corporate and caused our members no losses,” Bonds said. CUNA officials said the Chicago gathering had 20 representatives from 10 corporates though more attendees would have been added but limits were originally set to keep the session manageable.