Joseph Herbst, a top executive at two large corporate credit unions that failed under the weight of risky mortgage investments, emerged last week after being hired as the new CEO for CUMAnet, a mortgage lending credit union services organization (CUSO) based in Basking Ridge, N.J.
Herbst — who will lead the effort by the regional CUSO to expand nationwide — served as chairman of the now defunct U.S. Central Federal Credit Union, and was CEO of the recently-failed Members United Corporate Federal Credit Union.
CUMAnet originally began with a northeast regional presence, but has since expanded into other markets including Chicago and Washington. Herbst has experience financing a mortgage CUSO, with Members United having provided the main financing for Central States Mortgage Co., the CUSO that went bust in 2009.
He has kept a low profile since he and other top officers at Members United were dismissed by NCUA when the federal regulator took the one-time $14 billion corporate CU under conservatorship.
"We are excited to bring in Joe Herbst to lend his expertise and vision to our CUSO," said Robert Birkhahn, board member, CUMAnet board of directors. "His comprehensive background and experience in the industry and success with growing organizations from the regional to the national level will serve as key elements in helping to grow our organization."
Herbst has been a long-time leader in the corporate network, first as CEO of Empire Corporate FCU, which he merged with Mid-State Corporate CU to create Members United, then as chairman of the U.S. Central board. He was unsummarily dismissed from both positions when each was taken under conservatorship by NCUA, first at U.S. Central in March 2009, then at Members United on Sept. 24.
"My primary goals will be to increase CUMAnet's national footprint and maximize operational efficiencies for future growth, paving the way for low-price options. That is, after all, what the credit union system is all about," Herbst said.
CUMAnet, formerly CU Mortgage Alliance Network, is owned by 14 mid-Atlantic credit unions.