What is the Member's Capital Account?
MCA holds your credit union's "share" of Southwest Corporate FCU. Like the shareholder's shares of a for-profit company, MCA shares represent ownership of the organization.

How is the MCA structured?
Your credit union, like all the members of Southwest Corporate, places one percent (1.0 %) of its year-end assets, up to $1,000,000, in MCA. That deposit remains there as long as it is a full member of the corporate credit union. Funds in the MCA are paid a monthly dividend declared by the corporate's asset/liability committee. The rate varies according to the corporate's performance.

Why does Southwest Corporate need an MCA?
The NCUA regulation, Part 704, requires all corporate credit unions to maintain a capital ratio of at least 4 percent (Southwest Corporate, because it intends to maintain certain expanded investment powers, must have a 6 percent ratio). To achieve this, Southwest Corporate must rely on both its reserves and undivided earnings, and on member-contributed capital. The regulation permits Southwest Corporate to take in member-contributed capital deposits. MCA complies with this provision.

How does my credit union benefit from participation in MCA?
MCA represents a long-term investment in your credit union's credit union. Credit unions make this kind of decision because they believe that the total value of the relationship is a good deal. Specifically, this means that Southwest Corporate saves credit unions time and money through such value-priced services as simplified settlement, which earns .a competitive overnight rate on every dollar on deposit. The bottom line is that, by investing in MCA, your credit union makes it possible for Southwest Corporate to offer the variety and value of services that can help keep your credit union at its peak competitive advantage.

Can my credit union decide to withdraw its MCA shares at any time?
Yes, it can. Should your credit union decide to terminate its full member status, Part 704 only permits Southwest Corporate to refund MCA shares three years from the date that the notice is given. During the three-year notice period, the money is '"frozen." According to the regulation, no portion of the MCA share may be released until the three-year notice period has passed.

Can my credit union continue to access services at Southwest Corporate if it withdraws its MCA shares or chooses not to participate?
Yes. Generally, however, it will pay higher fees and rates on products and services. Some products and services may not be available.

Is our MCA share federally insured?
No. Because MCA shares are considered the owner's equity in the corporate credit union, they serve as part of the corporate's capital and may be used to satisfy liabilities in the event of the corporate's liquidation. Therefore, they are not insured by the National Credit Union Share Insurance Fund (NCUSIF).

My credit union currently participates in MCSD. What happens if my credit union fails to authorize MCA?
The funds will remain in the MCSD account, updated annually at one percent of year-end assets (capped at one million dollars) and subject to the same two year withdrawal notice.

What does my credit union need to do to participate in MCA?
Your board and management must read the terms of disclosure. The MCA authorization form must be signed by either: all of the credit union's board of directors; or, if authorized by board resolution, the chair, and secretary of the board.

Southwest Corporate will then transfer an amount equal to one percent (1.0%) of the credit union's previous year-end assets from the MCSD account to the MCA (up to $1,000,000). The remainder will be transferred into the credit union's Cash Management Fund account. Southwest Corporate will subsequently update the account each year in the second quarter, based on the credit union's year-end assets, as posted in its NCUA 5300 report. The credit union will receive a notice prior to the update.

Why is a relationship with Southwest Corporate good for my credit union?
We can't presume to speak for your credit union-only the directors, staff and members of your credit union can fully answer this question. But we can give you some good reasons why more than 90 percent of the credit unions in Arkansas, Louisiana, New Mexico, Oklahoma and Texas have found a relationship with Southwest Corporate to be very important. Of all the many service providers that credit unions may use, only corporates, like Southwest Corporate, are themselves credit unions. Only corporates are uniquely positioned and dedicated to serving credit unions. Only corporates make service decisions based on the wishes of their member-owner credit unions. The other providers make decisions based upon what will provide the highest dividends to their shareholders. Over the years, Southwest Corporate's unique cooperative structure has shaped it so that it offers your credit union a complete package of services {settlement, credit, investments, payment processing). When used together, this package delivers a total value that simply can't be found anywhere else.

Is Southwest Corporate a safe place for my credit union to invest its money?
Southwest Corporate's member-owner credit unions can be assured that they have invested in a "blue' chip" organization. Southwest Corporate assumes modest levels of credit, interest rate and liquidity risks, which are managed by the corporate's Asset/Liability Management Committee. Because of these conservative practices, Southwest Corporate has been consistently able to pay all shareholders and liabilities and still have millions of dollars in excess. Southwest Corporate operates within the regulations of the National Credit Union Administration and is regularly reviewed by the NCUA retained independent auditors, as well as its own internal audit department and Supervisory Committee.

Additionally, to help its member-owner credit unions comply with Part 703, representatives of those credit unions have access to all of Southwest Corporate's financial statements on a monthly basis. Southwest Corporate publishes an annual report with an audited financial statement and footnotes. That report also contains a complete Management Discussion & Analysis (MD&A). It publishes an un-audited mid-year report, with condensed footnotes and a complete MD&A. It provides quarterly MD&As and monthly financial statements via its Internet web site, www.swcorp.org. And it will mail a print copy of its monthly financial statements on a regular basis, upon request.