KEENE, N.H. (12/6/12)--The decision by Northeast Members Business Services LLC to wind down and distribute capital to its six owners was a strategy that reflected the changing member business lending market (MBL), the eight-year old credit union service organization's (CUSO) CEO told News Now
Credit unions are increasingly relying on in-house expertise for MBL, often at the behest of regulators, Northeast Members Business Services CEO Scott Anderson told News Now
The CUSO's member-owners accomplished their goal of establishing an MBL presence for their credit unions when they formed the business in 2004, and most had developed in-house expertise of their own, Anderson said.
The CUSO's owners include:
- Workers CU, Fitchburg, Mass.;
- RTN FCU, Waltham, Mass.;
- Metro CU, Chelsea, Mass.;
- HarborOne CU, Brockton, Mass.;
- Westerly (R.I.) Community CU; and
- Heritage Family CU, Rutland, Vt.
"We accomplished our mission," Anderson said. "Now is a great time to get out of the business."
The CUSO has remained profitable for its six member-owners, Anderson said.
Owners also considered merging with another CUSO or forming a cooperative among its credit union clients, Anderson said. "In the end, this was the cleanest, most certain thing to do," Anderson said.
The CUSO's equity--about $2.7 million--will be distributed among its ownership by mid-2013, Anderson said.
The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. CUNA and credit unions say that increasing the cap would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers.