By Ray Birch
MILWAUKEE—At a time when the credit union industry continues to wrestle with consolidation, aging memberships and questions about how many new cooperatives can realistically still be launched from scratch, Corporate Central has quietly taken a step that executives there believe could help seed the next generation of credit unions before they even officially exist.
The Wisconsin-based corporate has amended its bylaws to create an associate membership category specifically for de novo credit union initiatives—organizations still years away from obtaining a charter but already trying to raise capital, build infrastructure and organize supporters. The move has already brought in two university-focused initiatives tied to Seattle University and George Washington University, both led by longtime credit union advocate Cisco Malpartida Smith.
For Jesse Kohl, SVP of corporate development at Corporate Central, the decision grew out of a simple but uncomfortable realization: the movement talks constantly about wanting more new credit unions, yet many organizations in formation struggle to find industry partners willing—or even legally able—to work with them before they receive a charter.
Jesse Kohl
“We just couldn’t say no,” Kohl said. “Here was an organization that wanted to become a credit union, wanted to stay inside the credit union movement and specifically wanted a corporate credit union relationship. They didn’t want to go to a bankers’ bank or the Federal Reserve. They wanted a cooperative partner.”
According to Kohl, the initial answer Corporate Central gave Malpartida Smith was technically “no,” because its bylaws only permitted service to chartered credit unions and related organizations. But instead of ending the conversation there, executives began exploring whether the rules could be changed.
That process ultimately required internal legal review, discussions with Wisconsin regulators, board approval and formal bylaw amendments. Pete Paulson, SVP and COO, said the organization worked closely with the Wisconsin Department of Financial Institutions to craft language allowing Corporate Central to serve organizations actively pursuing a charter.
Bylaws Reviewed
“We reviewed our bylaws to see if there was a way this could work, and as they were written there was not,” Paulson said. “But then we got to thinking about it because our sole purpose is serving the credit union movement. Here’s an organization that wants to become a credit union—we need to be helping them, too.”
The process took roughly two to three months, according to executives, largely because of regulatory review timelines and board scheduling. The effort culminated in the creation of a new associate membership structure approved by both Corporate Central’s board and state regulators.
The Seattle University Credit Union Initiative joined in late 2025, followed by the George Washington University Credit Union Initiative earlier this year.
While the new initiatives do not yet need the full suite of corporate credit union services—such as ACH processing, wires or item processing—Paulson said they face one especially critical challenge during the formation stage: finding a safe place to build and hold the capital required for a charter application.
“For the most part they need a safe place to deposit their contributed capital as they’re growing that capital and preparing for a charter application,” Paulson said. “But it’s also about establishing relationships inside the movement.”
Executives said that relationship building piece may ultimately become even more important than the operational support itself.
Heartbeat Of The Movement
Kohl noted that many small and emerging credit unions still instinctively look first to cooperative partners—corporates, leagues and CUSOs—rather than outside providers.
“Small credit unions are the heartbeat of our movement,” Kohl said. “They always look to the movement first for their relationships, for their accounts and for the services they need.”
The initiative also comes as some industry leaders worry the pipeline for new credit unions has slowed dramatically. Organizers often spend years trying to assemble volunteer leadership, raise startup capital and navigate the regulatory process before they can even file a formal charter application.
Paulson said he has heard there are “dozens” of credit union initiatives currently in various stages nationally, though many may never reach the finish line because of the complexity and cost involved.
“It’s a very challenging process to get to the point of a charter application,” Paulson said. “Many times it’s a multi-year process before they even get their charter—and then that’s really day one.”
A De Novo’s Perspective
Malpartida Smith, managing director at SRM, fractional CEO of $16-million Tulane/Loyola FCU in New Orleans, and chairman of two de novo credit union startups, said Corporate Central’s decision to allow de novo credit unions to join before formally receiving a charter has been “above and beyond” what he encountered elsewhere during the startup process.
Malpartida Smith explained that while working through the chartering process, the credit union wanted to establish as much of its operational infrastructure as possible early on, including business and investment accounts at a corporate credit union that could hold capital funds tied to the charter application.
But Malpartida Smith said many corporate credit unions told him they could not help because the de novo credit unions were not yet officially chartered and to come back after we had received a charter.
As a result, the organization initially had to rely on a business license and membership at a natural-person credit union to hold funds during the chartering process, which Malpartida Smith said was far from ideal operationally.
Malpartida Smith said the conversation with Corporate Central began roughly a year ago when he raised the issue with one of the corporate’s sales representatives. He said he initially did not expect much to come from the discussion.
Instead, Malpartida Smith said Corporate Central leadership began exploring whether they could create a pathway for de novo institutions by pursuing bylaw amendments, board approval, regulatory discussions, and operational changes.
“They were willing to go through changing bylaws, forms, procedures and getting regulatory approvals just so they could add this capability,” he explained.
Malpartida Smith said the move allows Seattle University Credit Union Initiative (www.sucui.org) and the George Washington University Credit Union Initiative (www.gwucui.com) to begin using the same types of accounts, investment structures and operational processes it will ultimately need once fully chartered, avoiding the need to later unwind temporary arrangements and rebuild systems from scratch.
Because SUCUI and GWUCUI are student-run organizations, Malpartida Smith said establishing accounting, reconciliation and treasury-management processes early through a corporate credit union relationship is especially valuable. It also teaches and exposes the students invaluable aspects of our business.
“It aligns us with being successful that much sooner,” Malpartida Smith said. “It keeps us away from possible trouble, and it’s much more aligned with what our actual needs are versus just having a basic business account somewhere else.”
Interest Growing
Corporate Central executives said they are already seeing additional interest after publicly announcing the program. Kohl said consultants involved in other de novo efforts have begun reaching out, including one potential initiative in California. He also pointed to growing enthusiasm among university-based organizers who see campus-focused credit unions as a way to reconnect younger consumers to cooperative finance.
For Corporate Central, the effort is about more than deposits or operational accounts. Executives said the organization increasingly sees itself as a broader strategic resource for small and emerging credit unions, including education, networking and even employee benefit solutions through its employee benefits CUSO.
“Anything we can do to help small credit unions grow and thrive, help their employees and help their members, we’re really trying to do,” Kohl said. “Most of our best ideas are coming directly from our members.”