Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Corporates PayNet a no-go prompts NCUA contingency plans
ARLINGTON, Va., and LENEXA, Kan. (9/6/11)--The National Credit Union Administration (NCUA) said it is implementing contingency plans after the Payments Network FCU (PayNet) organizing council announced Friday that PayNet will not launch. Representatives from many of the nation's corporates met in Lenexa, Kan., last week to explore options for continued operation of payments products provided to corporates by Lenexa, Kan.-based U.S. Central Bridge Corporate FCU. Their conclusion: rather than charter a new corporate credit union, PayNet, the group will continue working cooperatively to create partnerships that allow uninterrupted products and services to the bridge's credit unions. The member-driven solution to charter PayNet as a vehicle to provide back-office payment and settlement services to consumers through the bridge corporate's member corporate credit unions "did not achieve sufficient support to launch PayNet as a viable business model," said NCUA in a press release. Scott Hunt, the agent for U.S. Central Bridge's conservatorship, announced NCUA would activate its contingency plans in a letter Friday to members of the bridge corporate. "NCUA will look to alternative resolution plans to facilitate the orderly transition of member services to other providers," Hunt said. "While we have a fiduciary duty to achieve the least, long-term cost resolution of U.S. Central Bridge, we remain committed to minimizing disruption to its corporate members, and in turn, natural person credit unions and American consumers." The agency said it has evaluated U.S. Central Bridge's individual service lines and will determine an appropriate resolution for each, including transitioning select services to other providers. It noted it has had "a number of contingency plans in place since the beginning of the corporate system resolution in preparation for this potential outcome." "We have no plans to immediately shutter U.S. Central Bridge operations, nor will we ask corporate credit unions to immediately transition away from U.S. Central Bridge," Hunt said. NCUA urged the 15 corporates involved in the failed PayNet initiative to "conduct due diligence on possible alternatives to ensure any eventual transition does not disrupt service to their members." The corporates' efforts had focused on organizing a new corporate credit union to purchase U.S. Central Bridge's various businesses to provide ongoing service to corporates. However, the group determined that would not provide the most efficient outcome for the Credit Union System, said the corporates in a press release Friday. “The efforts to organize an ongoing corporate credit union to acquire U.S. Central Bridge operations was an effort that needed to be explored, but it has been determined that partnering with leading vendors within the payments industry is the appropriate course of action at this time," said Brandt Peterson, executive vice president of SunCorp and a member of the Organizing Council. "Our primary goal always has been to ensure continuity of services to participating credit unions. We are much closer to a solution that will meet the needs of credit unions both in the short term and well into the future. The most important message for participating credit unions is that our solution will ensure minimal disruption to credit unions,” Peterson said. The group reaffirmed the importance of aggregation during the meetings with potential partners held during the past two days. Credit unions are cooperatives, and to that end, aggregating volumes and pooling resources provides the best outcome for the collective over time. Participating members include Alloya Corporate FCU, Catalyst Corporate FCU, CenCorp, CO-OP Financial Services, Corporate One, FirstCorp, Kansas Corporate, Kentucky Corporate, Missouri Corporate, SunCorp, Southeast Corporate, The Members Group, TriCorp, VolCorp, and Western Bridge Corporate FCU.


RSS print
News Now LiveWire
For the last 75 years, even in the most difficult of times, Mill Town #CU has been there for the community it serves. Read #NewsNow Tues.
3 hours ago
The 1st vid shows how consumer can become victim and, advice to those who think they've been targeted. http://t.co/hr9VHpzEze
7 hours ago
.@TheNCUA has released two videos designed to raise awareness of elder financial abuse. http://t.co/iddSxr7H40
7 hours ago
Celebrate #100MM with @MDDCCUA1 at Orioles v Blue Jays tonight at Camden Yards
7 hours ago
The At Home In Lawrence mortgage program from @MetroCU is designed to help revitalize Lawrence, Mass.
8 hours ago