October 12, 2009
-
News: Iowa CU League Applies For Holding Co
The Iowa Credit Union League filed an application with the Federal Reserve Bank of Chicago and the Comptroller of the Currency setting up a holding company to protect its members in the purchase of the CrediCard National Bank of Tucson. At this point, the credit union's intention to acquire the credit card bank is defined as both "exploratory" and an "alternative business model." Plans have been in the works to acquire the credit card bank since earlier this year. In spring, the league hired the Sheshunoff consulting firm and a Minnesota law firm to devise a plan that would be in the best interest of all parties. The league's primary concern leading them to form the holding company is for the protection of its members against escalating costs in the acquisition of the credit card bank.
Iowa Credit Union League has 28 organizations including the Iowa Central Corporate, the smallest of its members that could be affected by the acquisition of the credit card bank. Although the Iowa Central is a small member, it is well capitalized. The union is concerned about remaining competitive in the "changing regulatory environment." The National Credit Union Administration (NCUA) is currently examining a restructuring plan which includes the purchase of the credit card bank for the Iowa Credit Union League and is hoping to find a solution that would provide an independent enterprising environment. The NCUA is an independent Federal agency that charters and supervises Federal credit union throughout the nation.
Pat Jury, President and CEO of the Iowa Credit Union League stated that all autonomy for all its members are essential and no matter the new institution will surface as, a bank or a credit union, the league services all its members no matter the size. The league maintains that the proposed bank charter provides for services that will be extended to the Iowa credit unions including settlement services and access to credit card payment systems as well as establishing a relationship with Visa and MasterCard. The league's need to calm its members will not be the only entities they'll need to manage, the Iowa Bankers Association has also voice some concern over the acquisition. The Association says they have dealt with these concerns before and have not yet decided whether they will be objecting to the League's acquisition of the bank.