PHOENIX, Ariz. (8/22/12)--Members of Phoenix-based First Corporate CU voted Friday to approve the purchase and assumption (P&A) of the majority of its assets by Catalyst Corporate FCU.
FirstCorp and Catalyst are on schedule to complete the necessary transitions of products and services in time for their consolidation to take place Oct. 29, it was announced at the special meeting.
"We proposed this type of consolidation with Catalyst because it offers many benefits to our member credit unions," said FirstCorp Chairman David Doss, noting that "we have taken a major step forward toward completing the transition to Catalyst.
"All the members support the concept of a sustainable model, which will allow us to continue to enjoy low-cost, comprehensive wholesale financial services well into the future," Doss added.
The transition is unique because it takes the form of a P&A of certain FirstCorp assets and share accounts, said FirstCorp. Legacy assets will not be acquired by Catalyst, but will remain in the FirstCorp charter until they mature or are sold at a later date.
"This approach protects FirstCorp's membership capital, which will remain at FirstCorp, and will also immunize Catalyst's members against the risk of future losses on these assets," said Catalyst President/CEO Kathy Garner.
Roughly 93.48% of FirstCorp's eligible members cast votes, with 100% of those approving the transactions. As with all corporate consolidations, this proposal will require approval from the National Credit Union Administration and the Arizona Department of Financial Institutions.
In a press release, the corporates said they do not anticipate any obstacles in completing the proposal because the solution is advantageous for the corporates' members, the regulatory agencies, and credit unions impacted by the status of the National Credit Union Share Insurance Fund.
FirstCorp's offices and final operations will be shut down in the weeks following the closing of the P&A. The Catalyst Corporate's official capital offering period for FirstCorp members begins now and continues through Oct. 26.