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Kevin Lytle
Vice President, Marketing & Public Relations
The Role and Value of Corporate Credit Unions
Corporate credit unions and natural person credit unions are similar in many ways. They both strive to provide the best overall value for their members by offering highly competitive investment yields and the lowest fees on transactions. There is another similarity: both types of credit unions must continually promote themselves to their membership to remind them of the unique role each plays in their lives or risk the precipitous fall onto the field of commodities.
Due to its relative size advantage over other corporate credit unions and the fact that NCUA has granted it additional authority, WesCorp consistently posts the highest cost of funds compared to other corporates. This means WesCorp members have the benefit of higher dividend on both daily balances and certificates.
But more important, WesCorp and the rest of the Corporate CU Network act as a shield to reduce market risk for all credit unions. Given the current market volatility, this is an important value. Without the Corporate Network, credit unions would have to take more risk onto their balance sheets. This additional risk would likely be passed along to credit union members in the form of higher loan rates and lower dividend rates.
In addition, the Corporate CU Network serves as the settlement point for 85 percent of credit union daily clearings of share drafts, ACH and member deposits. The fees corporates charge are extremely competitive and serve as a governor to keep competitor pricing lower. This is the same role credit unions play as a benefit for their members.
Finally, corporate credit unions have played an important role in developing new products and services for their credit union members in order to reduce their dependence on local competitors. WesCorp’s members have access to 18 different payments services products, in addition to a variety of loan and certificate types. Most if not all of these were developed at the request of member credit unions.
The most important thing corporate credit unions and natural person credit unions share is not our common history in providing value to members but the role in making sure our members have financial success into the future.