News & Highlights

CUSOs Growing Impact by Jay Johnson

Recent data from call reports and the NCUA’s CUSO Registry confirm that credit unions are increasingly utilizing the CUSO model to enhance their value proposition. NCUA Call report data shows that credit unions have invested just shy of $2 billion in CUSOs as of year-end 2015. Credit unions also reported $680 million in loans to CUSOs at the end of the year. Both figures are up significantly over the past 10 years, with investments more than tripling and loans more than doubling.

CUSO slides

In addition to increasing dollars being put towards CUSOs, a higher percentage of credit unions are directing dollars to CUSOs. Nearly 35% of credit unions are either investing in or lending money to CUSOs – a number that has risen 10 percentage points over the past 10 years. Involvement in CUSOs is led by larger credit unions with 88% of credit unions over $1 billion in assets reporting CUSO activity.


NACUSO Member Spotlight on Capstone

John Dearing with his family in North Captiva, FL

John Dearing with his family in North Captiva, FL

Each month we highlight at least one NACUSO member by interviewing one of their top executives. It’s an opportunity to tell their story in a casual and fun way. This month we sat down with John Dearing, Partner & Managing Director of Capstone Strategic, Inc.

PART ONE: Life Story and Experiences

What’s your current position and can you give me a brief overview of what it is you do in your work?

In short, we are growth engineers and I’m a Partner and Managing Director at Capstone.

Capstone helps our clients develop and execute strategic, external growth plans – investments and acquisitions, partnerships and alliances. It is my responsibility to make sure our clients are happy. I oversee delivery of client engagements. One of our measures of success is if clients come back for more. We make sure we have the right team to be able to work with clients over long periods of time. We consider it an accomplishment to have worked with some of our clients for decades. In fact, we are proud to continue working with our first client from 1995.


Birthday Greetings From Capital One

I am faithful to my credit union…to a point.  I do all my “banking” at my credit union unless they give me a reason not to.   Interest rates are low everywhere but they have been particularly low at my credit union so I opened up an ING Direct Account years ago to hold the majority of my cash deposits.  ING Direct sold out to Capital One and now they are my other financial institution…yes Capital One, the grey behemoth of a bank.

I recently had a birthday and Capital One sent me a Jib Jab email with singing presidents (except for Ben):  Washington, Lincoln, Jackson and Franklin.  I know that no one at Capital One knows me and the message had no personal warmth behind it, but it still made me smile.  My image of Capital One became briefly a fuzzy cute behemoth.


Collaborating on Collaboration with Kirk Kordeleski

collaborating logo.001Thank you to all those who noticed and read my first blog on Collaboration.

Today lets talk about what makes collaboration work and what causes it to fail.

Collaboration and particularly the formation of CUSOs is all about the credit union answer to the challenge of creating scale and sharing risk in a cooperative structure. In the for-profit world scale is achieved through aggressive growth and acquisition. Neither work effectively in CU land. Aggressive growth requires access to capital, we don’t have access to any form of additional capital so growth is always a function of the current capital levels and ROA. Given that our members own us and returning value to them comes in the form of enhanced services, channels and rates our margins always should run at their minimum required levels, not their maximum levels. Thus it is difficult, without adversely affecting the members, to grow income at a level that would provide aggressively higher capital, which in turn would allow for aggressive growth and additional scale.


NACUSO Spotlight on Next Big Idea Contestants

Keith Kelly, CEO of Rate Reset celebrating his victory at the 2016 Next Big Idea Competition

Keith Kelly, CEO of Rate Reset celebrating his victory at the 2016 Next Big Idea Competition

This month we sat down with 2 of the 2016 Next Big Idea Presenters Ian Lampl, Co-Founder and CEO of LoanStreet and Keith Kelly, Co-Founder and CEO of Rate Reset and the winner of this year’s Next Big Idea Competition. We recently found out that they have partnered to create a unique opportunity for credit unions.

PART ONE: Life Story and Experiences

What’s your current position and can you give me a brief overview of what it is you do in your work?

Keith: I am the Co-Founder and CEO and of Rate Reset, provider of Loan Reset, Acquisition and Retention software.  I am responsible for all day-to-day management decisions and for implementing the Company’s long and short term plans

Ian: My current position is Co-Founder & CEO of LoanStreet LLC.  The bulk of my day-to-day work revolves around educating credit unions on the economic benefits of loan participations and corresponding regulatory structure.  As you can imagine, this involves a lot of time on the phone!  But, I also present and teach at many conferences and events.  For example, we have run two webinars for the NCUA regarding loan participations. 


NACUSO Member Spotlight on Tony Boutelle, CEO of CU Direct

Each month we highlight at least one NACUSO member by interviewing one of their top executives. It’s an opportunity to tell their story in a casual and fun way. This month we sat down with Tony Boutelle, CEO of CU Direct.

Tony Boutelle and his wife Kathy

Tony Boutelle and his wife Kathy

PART ONE: Life Story and Experiences

What’s your current position and can you give me a brief overview of what it is you do in your work?

I’m the president and CEO of CU Direct and simply put I run a lending technology company that serves credit unions and auto dealers.

What would you say most motivates you to do what you do? What are you most excited or passionate about?

I love building a business. The rush of being an entrepreneur is that every day you wake up and think about what initiatives you can take on to make your business thrive. Every day I come in and enjoy creating value for members, dealers and credit unions. Even though I don’t own CU Direct I feel in my spirit I do and approach it that way.

I want to hear the story of how you came to work with credit unions. What attracted you to work for CU Direct?

I have always been an entrepreneur at heart.  I really enjoy starting businesses and helping them grow.

I started my credit union career at the Colorado Credit Union League where I helped them start their first financial planning/investment program for credit union members. I then worked for CUNA Mutual for three years. From there I went to the California Credit Union League and finally in 2000 was full time with CU Direct. The excitement of starting a company from the ground up was very attractive to me.

Now if we can go even further back, where did you grow up and what was it like living there? Where did you go to school?

I was born and raised in Rochester, Minnesota. I went to a Catholic school, Lourdes High School. I had to wear a uniform, and the nuns wore the old-fashioned full habits. It was a great school. I graduated from the University of Wisconsin-Madison with a Bachelor’s of Business Administration.


NACUSO Cooperation Among Cooperatives: Stories from the Inside

Each month we highlight at least one NACUSO member by interviewing one of their top executives. It’s an opportunity to tell their story in a casual and fun way. This month we sat down with John Theobald, President of a new CUSO, CU Appraisal Services.

John Theobald, President of CU Appraisals hanging out.

John Theobald, President of CU Appraisal Services hanging out.

PART ONE: Life Story and Experiences

I want to hear the story of how you came to work with the credit union movement?

Family. Mother started in credit unions when I was a kid. She is currently CIO at Visions FCU in NY. She started at a small credit in Hamilton, Ohio, Chaco Credit Union. Which is the same credit union that Doug Fecher, CEO of Wright-Patt Credit Union  and Tim Mislansky, President, myCUmortgage came from, who are also the original customers of CU Appraisal.

Where did you grow up and what was it like living there? Where did you go to school?

I grew up in Hamilton, Ohio. It’s a suburb of Cincinnati and a blue collar town that thrived on the paper industry. I went to Hamilton High School. A little bit of college in Miami University in Oxford, Ohio but got my degree at University of Phoenix.

Who were your mentors along the way? People who deeply influenced who you are, what you believe in and what you’re committed to in your work and life? Tell me about them.

In business it’s certainly Tim Mislansky.  He gave me that first job at Chaco Credit Union. Spent 5 years working at Wright-Patt and still to this day I look to Tim. My mother of course as well. I’ve been really inspired by what she’s been able to do at a multi-billion dollar credit union. My current chairman, Ron Stickleman is an incredible entrepreneur and businessman.


Kordeleski Collaborating on Collaboration

collaborating logo.001Hello Everyone, this is our new blog, being born of the Partner Connection Sessions at this years NACUSO conference and taking on the subjects of collaboration in our industry. Lets call it collaborating on collaboration!

We have just returned from the very successful NACUSO annual conference and exhibit. The conference demonstrated what we have been seeing across the credit union industry, a new enthusiasm, and maybe more importantly, a new need for CUSOs. I think that enthusiasm and need comes from the ultra-competitive financial services world that the industry is facing.

This new world is one of ultra-low rates and margins, fierce competition from FinTech companies, an invigorated banking industry and the requirement to invest in a new world of digital, data and web based retail services to address this new paradigm.


Advocacy Updates

NCUA Meeting Provides CUSO Guidance 6/16/16

NACUSO Visits NCUA to Discuss the CUSO Registry and CUSO Reviews

On June 14, Jack Antonini, NACUSO President and Guy Messick, NACUSO General Counsel met with NCUA Staff on the results of the CUSO Registry and the thinking on how CUSO Reviews will be handled.

The CUSO Registry sign-up period and the follow-up by NCUA found there were approximately 900 CUSOs.   NCUA believes that there are more CUSOs that have not reported.  Under the NCUA Regulations (Part 712.1(d)), “A CUSO also includes an entity in which a CUSO has an ownership interest of any amount, if that entity is engaged primarily in providing products or services to credit unions or credit union members.”   So these subsidiary CUSOs are considered CUSOs and required to make annual reports to NCUA.   The NCUA staff believes that many CUSOs were not fully aware of this requirement and there are a number of subsidiary CUSOs that have not reported.   NCUA will be following up with CUSOs to obtain these filings.   NCUA is also scrubbing the data and asking for clarification if the data is indicating that there may have been a reporting error. (more…)

Report on Advocacy Fund spending…NACUSO Working for you

Through the support of our partners, NACUSO raised approximately $63,000 in contributions toward its Legal and Litigation Fund in 2014 with a primary purpose to develop strategies for the most effective way to seek the repeal and/or mitigation of the impact of the CUSO Rule that NCUA had adopted in November 2013.  Subsequently, NACUSO established an Advocacy Fund to supplement the Legal and Litigation Fund.  The goal of the two funds together were to enable NACUSO to coordinate legal decision making, with a crucial advocacy component that will have more impact than the always risky option of legal action.  In total, $190,600 was contributed to the NACUSO Advocacy Fund.  Combined these two related initiatives received total contributions from NACUSO partners of approximately $253,600 in 2014 and 2015.

In keeping with our commitment to be fully transparent and to regularly communicate our usage of these dollars, we would like to provide you with the following information.  NACUSO spent the following amounts from the two funds during 2014 and 2015:


CUSO Registry Clean Up Period 4/22/16

As most of you know, all CUSOs are obligated under the NCUA Regulations to register certain information directly with NCUA on an annual basis.   Over 800 CUSOs did so in February and March.   NCUA is now in the process of making sure all CUSOs have registered.   Their new deadline is April 30.  They are taking CUSO information from the credit union 5300 call reports and sending out letters reminding “CUSOs” that they have to register.   Some credit unions may have incorrectly listed a company as a CUSO.  Other credit unions list their CUSO but use an acronym for the CUSO instead of the CUSO’s full name.   NCUA, not knowing better is sending letters to any and all companies listed on the call reports. (more…)

Regulatory Update 3/15/16

Letter to NCUA regarding CUSO Registry Acknowledgement: Yesterday, NACUSO informed you of a change we negotiated with our General Counsel (Messick & Lauer) with the NCUA regarding the CUSO Registry Acknowledgment each CUSO is required to agree to when submitting their CUSO registration in the NCUA’s CUSO Registry system.  As we pointed out in our Regulatory Alert yesterday, the acknowledgment required CUSOs to agree to be bound by statutes that only apply to credit unions and which imposed penalties that are not applicable to CUSOs.


Change to the CUSO Registry Acknowledgement 3/14/16

During the process of assisting with CUSO Registry questions, it came to our attention that in order to complete the CUSO Registry, CUSOs were required to agree to be bound by statutes that apply to credit unions and which imposed penalties that are not applicable to a CUSO.  On behalf of NACUSO and the many CUSOs in this industry, Messick & Lauer (NACUSO’s General Counsel) have advocated and negotiated to revise this acknowledgement to more accurately describe the duty of CUSOs to respond to the CUSO Registry.  It is a contractual duty with the credit union and not a direct regulatory obligation to NCUA.   As NCUA continues to pay more attention to CUSOs, NACUSO will continue to take action to be the voice of CUSOs and to resist any attempts at regulatory overreach.  The NCUA has changed the acknowledgement text.  For your reference, the text of the previous and current CUSO Registry acknowledgments are below. (more…)

Regulatory Update 2/26/16

NCUA’s CUSO Registry Training & Demonstration webinar held on February 11 is now available to be viewed.  If you missed the webinar, or want to view it again, to help you in completing the CUSO Registry, you can watch it by clicking on the following link:  View 2/11/16 Webinar. You have until March 31, 2016 to complete your initial registration of all CUSOs.

Regulatory Update 2/1/16: NCUA’s CUSO Registry Opens Today

Credit unions and credit union service organizations can now get additional guidance on NCUA’s CUSO Registry from a new agency website page. Registration for the CUSO Registry opens today and continues through March 31. The new website page explains the agency’s requirement that CUSOs report information directly to the agency if they wish to work with credit unions and provides links to related resources available to help those completing the registry. You can link directly to the CUSO Registry from the resources page.