William Stewart, former Southeast Corporate FCU member relationship manager, has been hired by the Washington-based National Cooperative Bank to help the institution increase its credit union book of business.

Stewart fills a newly created position at the $1.7 billion NCB: vice president, credit union market leader.

Stewart and NCB Senior Vice President Pat Connealy spoke with Credit Union Times on Wednesday about the bank's pursuit of credit union correspondent business as for-profit banks shed their credit union customers.

The NCB's pursuit of credit union correspondent services business follows a successful 2011 deal with the Iowa Credit Union League, in which the bank replaced services provided by the now-shuttered Iowa Central Corporate CU.

New credit union clients are not only a way to expand a new line of business, Connealy said, but also build core deposits on the NCB's balance sheet, which bucks the trend in corporate credit unions to keep deposits off the balance sheet as they meet tougher capital requirements.

The NCB's intent isn't to take business away from corporate credit unions, he said, but instead reach those credit unions that are reluctant to contribute capital to gain access to corporate services but haven't yet settled upon a permanent correspondent services solution.

“There's a lot of opportunity out there,” Connealy said. “Our challenge is figuring out where to focus our efforts because we don't have unlimited resources.”

As for banks such as the Columbus, Ohio-based Huntington Bank and the New York-based JPMorgan Chase, which both blamed Bank Secrecy Act compliance as a reason for dumping credit union clients, Connealy said he doesn't anticipate BSA or other compliance issues will be a problem.

“We're regulated by the (Office of the Comptroller of the Currency), and I can guarantee when they come here, they look at our correspondent banking services just like they do loans and everything else,” he said.

“But as long as we're in compliance that should never be an issue. We're not going to make an excuse like the BSA; and, that sounds like what everyone has speculated, that it's just an excuse,” Connealy said.