Collaboration

HELP! I Need More Net Income!

As someone who has worked with CUSOs for the past thirty years, I am often asked by credit union CEO’s what are the “hot” services for CUSOs?   “I need more revenue streams and I need to contain my operating costs.   What works?”

Fee Income

Revenue streams come in two flavors, fee revenue and interest revenue.  Looking first at fee income, investment services can provide significant returns. After paying the financial advisors and costs, credit unions can earn between 30%- 45% of the commissions shared with the credit union which can be 80% to 92% of the total commissions. There are many credit unions that have affiliated broker/dealer relationships that generate over a million dollars per year in commission income (note that this model is direct with the credit union and not through a CUSO).  The amount of capital needed to start up and support an affiliated investment services program is a pittance comparted to the capital needed to source, underwrite, fund, service and reserve for loans.… Read more

NACUSO Recognizes Excellence in Collaboration at 2018 Network Conference

The National Association of Credit Union Services Organizations (NACUSO), the only trade association focused on growing and protecting the CUSO movement recognized four outstanding CUSOs and one innovative and collaborative credit union at the 2018 NACUSO Network Conference at the Disneyland Hotel.

NACUSO understands the importance that collaboration and innovation play in building a strong and vibrant credit union industry. The CUSO of the Year award has been in place since 1998 and has recognized such legendary CUSOs as the CO-OP Shared Branch network, CU Direct, CU*Answers, CUSO Financial Services and PSCU. Last year’s recipient was CU*NorthWest. This year’s winner is The Servion Group. The Servion Group was founded in 1987 as CU Mortgage Services, Inc., by three Minnesota credit unions – Twin City Co-ops Federal Credit Union (SPIRE Credit Union), City-County Federal Credit Union (purchased by WINGS Financial Credit Union), and NWA FCU (WINGS Financial Credit Union) – looking to offer competitive mortgage solutions to their members.… Read more

Never Burn a Bridge With Former Girlfriends

Never burn a bridge with former girlfriends.  It can jump start a career.   I stayed friendly with my high school girlfriend Maryanne who married John Unangst the President of Franklin Mint Federal Credit Union.   John formed one of the first CUSOs in 1988.   The CUSO provided mortgage services and data processing services to multiple credit unions.   As a result of meeting John through Maryanne, I formed John’s CUSO.  John became a director on the newly formed NACUSO Board and asked me to go with him to San Diego on his dime to a NACUSO Conference and play golf.  My bags were packed before he finished his invitation.

In San Diego, I did a presentation to a four table conference.  John suggested to the NACUSO Board that I be their General Counsel.   My most attractive feature was that I was free.   So began my representation of NACUSO.  I thought I could handle this gig as CUSOs are essentially small businesses and I had a lot of experience representing small businesses, including being the attorney for the local Chamber of Commerce.   … Read more

Voluntary Mergers: The Stuff No One Says Out Loud by Guy Messick

I get it.  You want to merge with a peer sized credit union.  Together you will have more scale, twice the number of branches, twice the membership size, twice the assets…twice, twice, twice.    Having all things twice should create the golden ticket of economies of scale.   But after the merger you seem to have twice the payroll but not twice the benefits.  What happened?   The dirty little details get in the way.

  1. If you don’t trim the payroll, you don’t save money. People are the highest cost of operations.   Unless you have fewer employees after the merger, you are not going to save money.   Are you willing to make those decisions?
  2. If you don’t trim the vendors, you don’t save money. The continuing credit union needs to quickly decide what vendor to use for each service.  Having multiple vendors for a service within a credit union does not create efficiencies.
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