DES MOINES, Iowa (10/6/09)--The Iowa Credit Union League has filed an application to purchase Tucson, Ariz.-based CreditCard National Bank in response to member credit union needs and an understanding that Iowa Corporate Central CU is looking at its future. Iowa Corporate Central CU, Des Moines, is a small but well-capitalized corporate, according to Patrick Jury, Iowa league president/CEO. However, the Iowa corporate has conveyed to its members that it is examining its future to determine if it can continue to provide the same competitive products and services, considering its relatively small size in a changing regulatory environment. “Based on that understanding, our membership directed the Iowa league to look for a resolution that would maintain local autonomy and direction of Iowa credit union correspondent services,” Jury said. In addition to local ownership and autonomy, Jury said other priorities include:
* Ensuring credit unions’ transition to a new institution is seamless; * Assuring that the alternative serves all credit unions regardless of asset size; and * Ensuring that the alternative provides similar products, services and pricing, and retains current Iowa Corporate Central CU employees.
The proposed bank charter would provide credit unions with settlement services, access to payment systems, and relationships with Visa and MasterCard for Iowa credit unions, Jury said. A secondary benefit of the charter would be to facilitate the league’s credit card processing expansion through The Members Group, a league affiliate. "This application is in response to the needs communicated by Iowa credit unions based on the uncertain future of Iowa Corporate," Jury said. "We have complete confidence in the National Credit Union Administration.” The league has conducted several town hall meetings for Iowa credit unions about the application to buy CreditCard National Bank. The credit unions have expressed “strong support,” Jury said. The application, filed with the Federal Reserve Bank of Chicago, has a 60-day window before a decision is made. The bank could ask the league for more information, which extends the decision-making process. If the application is declined, the league will look at other alternatives to serve its members, Jury said. He emphasized that should the league purchase CreditCard National Bank, it would not have a retail operation and no board member or staff member would receive stock or a financial benefit as a result.