NOTRE DAME, Ind. — The $530 million Notre Dame FCU has received $12 million in secondary capital from the newly formed CU Secondary Capital Fund (CUSCF), a private vehicle created in a joint effort by CU Capital Market Solutions, LLC (CMS) and Olden Lane Advisors LLC.
Notre Dame FCU said it plans to use the proceeds to enhance its capital base, increase earnings through loan and deposit growth, and to fund its national expansion efforts, according to CEO Thomas Gryp.
“This is a game-changer for both Notre Dame FCU and our industry as a whole,” Gryp said. “This injection of secondary capital, facilitated by the CUSCF, provides us the potential for immediate growth that otherwise would have taken years to achieve.”
Notre Dame FCU, a low-income designated credit union (LICU), serves more than 55,000 members.
“The process of successfully securing secondary capital is much more involved and detailed than people realize,” said Notre Dame FCU CFO Michael Goad in a statement. “While LICUs have historically had the ability to accept secondary capital, it has rarely been used as a strategic growth tool for larger credit unions due to lack of availability. The CUSCF has changed that equation.”
Notre Dame FCU worked with CMS, an Atlanta-based CUSO, to access the fund.
CMS and Olden Lane reported that to create the fund they combined the knowledge and professionalism of both entities to implement the program, and “turned a complex process into a seamless, efficient and successful endeavor, he added.”
According to CMS President and Chief Strategist Robert Colvin, many credit unions are growing beyond their retained earnings. “In most cases, secondary capital is an absolute necessity to continue their growth and provide their membership with the high level of services expected,” he said.
Michael Macchiarola, a partner at Olden Lane Advisors LLC, the manager of the CUSCF, added, “This represents the launch of a first-of-its-kind vehicle specifically created for the sole purpose of providing secondary capital to LICUs. We are pleased to be able to assist in their responsible growth and offer lenders an attractive return on a diversified pool of borrowers at the same time. We were inspired by the NCUA’s challenge to employ secondary capital to facilitate responsible growth. We welcome the opportunity to support economic development in low-income communities and expansion of the credit union industry.”
CMS CEO Lew Lester also noted, “Relevance is a must, and we will continue to rise to the challenges facing the credit union movement in sustaining that relevance. Predictions of vigorous economic growth will accelerate loan demands above the already robust levels credit unions are already experiencing. Access to capital is paramount to our industry and the members we serve.”