Still suffering from the bite of losing all their Western Corporate FCU capital in 2009, credit unions reportthey are still capital shy when it comes to replacing corporateservices.

President/CEO Robert Einstein of the $140 million UMe FCU said he transferred his Burbank, Calif.-based creditunion's business to Corporate America Credit Union because theIrondale, Ala.-based corporate doesn't require a capital investmentfor new members.

“It just wasn't a good deal for credit unions to capitalize anew WesCorp,” Einstein said, referring to the failedattempt to capitalize United Resources Corporate FCU out ofWesCorp's ashes. “We just weren't interested so we knew early on wewere going to leave.”

Although UMe did consider moving settlement and transactionprocessing to the Federal Reserve, Einstein said he still likes theservice aspect of corporate credit unions, and wanted to continueto support the central cooperatives.

“We really liked WesCorp's services, they did a good job,”Einstein said. “It's just unfortunate the investment side ruinedthe whole thing. Corporate America isn't WesCorp, but they get thejob done.”

Marnie Nemcoff, vice president of marketing for the $130 millionMatadors Community Credit Union in Chatsworth, Calif., said herinstitution also transitioned from WesCorp to Corporate America.Calling Corporate America's lack of a capitalization requirement “aperk,” Nemcoff said her team was even more attracted to CorporateAmerica's stability and pricing.

“The main factor was financial stability, safety and soundness,and the fact that their members never lost any capital,” Nemcoffsaid. “It made us feel very comfortable.”

Matadors did not wait to see if United Resources wouldsuccessfully capitalize before making its decision, she said. “Ithink we got in [to Corporate America] before a lot of others did,”she said of the credit union's third quarter 2011 conversion.

Jo Lynn Austin, senior vice president and chief operationsofficer for the $4 billion Corporate America, said her shop doesn't track where newmembers have moved their services from. However, she said sheestimates her corporate has gained 65 former WesCorp members.

Credit unions from across the country have flocked to CorporateAmerica. Austin said the corporate counts more than 550 membersafter adding approximately 300 new members over the past twoyears.

“We're not actively seeking members from any specific corporate,but we're certainly open to anybody who wants to work with us,”Austin said.

Corporate America still accepts new members without a capitalinvestment, and Austin said the board has no immediate plans to doso. Some new members voluntarily invested capital, she said.

The big winner in scoring former WesCorp members was CatalystCorporate FCU, which won the NCUA bid to purchase and assume the failed corporate'sremaining assets.

Shane Berger, president/CEO of the $165 million Beehive FederalCredit Union, said he moved his Rexburg, Idaho-based institution toCatalyst Corporate FCU. Berger was a member of the board for thegroup that attempted to capitalize United Resources.

“It didn't work out, we didn't raise enough money, but so far,I'm very happy with Catalyst,” he said of the failed capitaldrive.

Berger said he's surprised how easy the transition of his checkclearing and ACH processing, wire transfer services and line ofcredit to Catalyst has been. He reported that many of his peers whowere former WesCorp members also went with Catalyst.

President/CEO Kathy Garner estimates her Catalyst Corporatecounts about 500 members from the West, most of them former WesCorpmembers.

More than 300 of those members have deposited capital in the $2.2 billion corporate,exceeding Catalyst's goal of 284. The remaining 200, she said, arestill in flux, and have until September to either move theirservices elsewhere, or contribute capital at Catalyst.

The transition has gone very well, Garner said, save for a fewhiccups that involved individual credit unions. All checkprocessing services, including share draft processing and remotedeposit capture, have already migrated over to Catalyst's coreprocessor. The corporate began moving over ACH services from U.S.Central's APEX-ACH service to its own in-house solution May 21 andexpects to complete the process in late June.

Robert Coyan, senior vice president of marketing and operationsfor the $4.1 billion Corporate One Federal Credit Union said hisColumbus, Ohio-based institution has added 36 new members from thewestern region. And, his team is in touch with several creditunions that are in the process of recommending to their boards aswitch to Corporate One.

“We expect our membership to increase in the near future,” hesaid.

Chuck Bruen, president/CEO of the $962 million FirstEntertainment Credit Union of Hollywood, Calif., had said duringthe corporate crisis that credit unions don't really need corporateservices. Indeed, Bruen put his money where his mouth was,transferring all of his Hollywood-based credit union's business tothe Federal Reserve, save for a line of credit at Corporate Americaand some deposits at other corporates.

Although corporates had said going to the Fed would require moreback-office resources, Bruen said he hasn't had to hire anybody,and in fact, he plans to reduce his back-office staff because theFed is so efficient.

President/CEO Stuart Perlitsh said he started transitioning his$325 million Glendale Area Schools FCU out of WesCorp before the2009 conservatorship.

“Our board voted to never again capitalize a corporate,”Perlitsh said, “so the only thing we have at a corporate is a lineof credit and foreign wires at Corporate America.”

Perlitsh called the claim that working with the Federal Reserveis more work “an urban legend.” He said he's hosted several creditunions at his Glendale, Calif., shop to show them how easy it is towork with the Fed. In fact, a contact at the Fed sends curiouscredit unions his way when they need a reference.

The outspoken CEO, who was the original WesCorp plaintiff in asuit alleging fraud and breach of fiduciary duty, said he estimates100 former WesCorp members are now working with the Fed, includingcredit unions as small as $50 million in assets.

“There's less hand holding, but it's not insurmountable,”Perlitsh said. GAS has not experienced any counterfeit or fraudlosses since the switch, either, because his staff reconcileschecks every day, compared to a monthly review at WesCorp. Dailyreconciliation requires about 15 minutes a day, he said, and thecredit union hasn't experienced an increase in labor expense.

“In fact, we've grown in assets, so the argument could be madethat our expenses have decreased,” he said.