NASHVILLE, Tenn.–Volcorp has paid out a special dividend of $15 million.
The decision by VolCorp follows a move by NCUA during 2021 to begin making distributions from the U.S. Central Asset Management Estate (AME). U.S. Central was placed into conservatorship by the agency in 2009, along with four other corporate CUs, with VolCorp noting the distributions represented the funds recovered since corporates and some natural-person credit unions absorbed those charge-offs.
VolCorp also noted it was one of only five corporate credit unions it said were known as “the Solvent 5” whose members were not forced to write off any of their capital.
VolCorp, however, did receive distributions for a portion of its claims on its own capital that was written off at U.S. Central and was also the beneficiary of distributions for its subsequent merger partners in West Virginia and Kentucky.
Question is Raised
According to VolCorp, the distributions from NCUA raised the question of how it could best return some of the funds to credit unions in its field of membership that also experienced charge-offs during the economic crisis?”
VolCorp reported it initiated contact with NCUA and the Tennessee Department of Financial Institutions as part of the effort to explore its options and the possibilities of how it could “do the right thing” with the funds, which it said meant distributing funds to those that experienced charge-offs and to retain the remainder as it represents the retained earnings of each of the three corporates that today make up VolCorp.
“The Federal Credit Union Act did not allow VolCorp to ‘replenish capital’ for credit unions, but it did allow them to pay non-pro rata special dividends to 146 member credit unions who endured charge-offs through their previous corporate affiliations in West Virginia and Kentucky,” VolCorp said.
CEO, CFO Make Calls
VolCorp said it devised a plan and began sending out notices, and, in some cases, its CEO, Jeff Merry, and CFO, Justin Holt, began making calls to the credit unions that have “unique circumstances to make sure they were well taken care of.”
“One thing is for sure, there was a commonality with every conversation – each credit union was shocked and very grateful,” VolCorp said in announcing the dividend.
Volcorp quoted one credit union CEO as saying, “I would like to express my sincerest appreciation for the special dividend distributed to our credit union. Your gift made it possible for us to grant generous Christmas gifts to our valued employees to show how much we appreciate their efforts as they continue serving our members while short staffed and while working through personal losses created by the pandemic. This gift made it possible for us to pay it forward at a time that meant so much to us all, making our holiday season so special. Thank you for upholding and honoring the credit union philosophy of people helping people.”
‘Stronger Going Forward’
VolCorp added that it was “thrilled to be able to obtain these funds and provide a special dividend to the credit unions who experienced charge-offs, as well as to retain the portion of the distributions that should stay on their own balance sheet. By paying this special dividend, VolCorp is confident everyone will be stronger going forward.”