United Resources Corporate Capital Raise Results Prompt Contingency Plan
ALEXANDRIA, Va. (Sept. 1, 2011) – The member-driven solution for United Resources Federal Credit Union to succeed Western Bridge Corporate Federal Credit Union did not achieve enough capital subscriptions to reach the stated goal of $200 million by Aug 31.
As a result, Scott Hunt, agent for the conservator of Western Bridge, whose corporate headquarters are in San Dimas, Calif., sent a letter to the members of Western Bridge today.
“The National Credit Union Administration (NCUA) remains firmly committed to ensuring continuity of service and operations for all Western Bridge member credit unions,” wrote Hunt. “We have no immediate plans to shutter Western Bridge’s operations. NCUA is committed to an orderly and timely resolution that ensures uninterrupted service to all member credit unions.”
“While Western Bridge is a temporary entity, NCUA seeks a holistic approach in addressing member credit union service needs that will not require significant changes to how your credit union currently does business. However, credit unions that choose to directly seek an alternative provider in the coming months are still free to do so,” Hunt added.
During the fall 2010 corporate system resolution town hall meetings, audiences were briefed on the possible inability of one or more corporates to achieve their planned capital raise. This known contingency was planned for during the development of NCUA’s corporate system resolution plan.
Thus, NCUA is enacting its contingency plan to provide an alternative, through which Western Bridge members can continue to obtain corporate services for the long term.
The service infrastructure and member service volume at Western Bridge have significant value. NCUA is working to solicit acquirers to obtain the business as a package transaction that will have minimal impact on member credit unions. This may be accomplished through a merger with or an acquisition by another corporate or wholesale financial institution.
In negotiating such a package transaction, NCUA’s efforts will be best maximized by retaining the volume of members and service activity that currently exists at Western Bridge. Stabilizing the membership and service base maintains the value of the institution for potential bidders.
“We believe the new plan will provide critical elements that each credit union will want to consider as part of its due diligence process before making a final decision on its future service needs,” said Hunt in the letter. “As such, member credit unions may want to continue utilizing Western Bridge services during this process.”
NCUA expects a solicitation and bidding process to begin soon. To enable a fair bidding process, obtain the best possible solution for member credit unions, and ensure the best financial outcome, within sound public policy, for the Temporary Corporate Credit Union Stabilization Fund, much of the process must be done confidentially. NCUA will, however, keep Western Bridge members informed to the greatest extent possible.
Some member credit unions may have already finalized a decision to transition their services to other providers. As part of their individual contingency planning, every member credit union is encouraged to have a full understanding of the products and services they receive from Western Bridge in order to understand the potential effect of a transition to a new provider. NCUA staff will work with those credit unions that have already made the decision to transition services away from Western Bridge to ensure that the process goes as smoothly and timely as possible.
Frequently asked questions regarding this matter are located here
NCUA is the independent federal agency created by
the U.S. Congress to regulate, charter and supervise
federal credit unions. With the backing of the full
faith and credit of the United States, NCUA operates
and manages the National Credit Union Share
Insurance Fund, insuring the deposits of more than 101
million account holders in all federal credit
unions and the overwhelming majority of
state-chartered credit unions. At
Pocket Cents, NCUA also educates the public on consumer protection and financial literacy issues.