Helping CUs serve business members may be the next big niche for corporate credit unions

<p>WEST PALM BEACH, Fla. – There’s a buzz among corporate credit unions about the prospect of stepping up to help member credit unions serve business accounts. Kathy Garner, president/CEO of Northwest Corporate CU, Portland, Ore., said over the past two months the corporate has been looking at ways of helping CUs better serve businesses. “We’ve been doing some research. We have a person on staff who comes from a commercial bank. We think there probably are some things we can do,” said Garner. Those things could include document preparation, crunching numbers, ACH services, and maybe even having a commercial loan officer on the corporate’s staff to help with business loans. Garner said nothing has been decided at this point. Northwest Corporate recently ran a business services seminar for its CUs. It was crystal clear from that seminar that Northwest’s CUs have tremendous interest in serving businesses. But is this something they are looking to their corporate for help? Garner says yes. She offered the analogy of what happened with item processing 20 years ago. Credit unions knew they had to do it, but didn’t have all the expertise and equipment in place. Corporates stepped up and have become the premier payment processors for the industry. Item processing is key for serving business accounts. Unlike members, businesses want all their checks back all the time. Being able to deliver check images online through a Web-based system are the kinds of things businesses want, said Garner. She said credit unions also must deliver online cash management solutions. “We’re at the point now where we have to decide what we’re going to do. Does this make sense? Can we make a go of it?” said Garner. She said the corporate’s board should have some sense of what it will do in this area by the end of the month. If the corporate does go forward it will likely be done via a CUSO, said Garner. Eric Kenealy, president/CEO of SunCorp Corporate CU, Arvada, Colo., said empowering SEGs and business members to do ACH origination has been the “holy grail” credit unions have been trying to deliver for years. With new technologies, many of today’s corporates can now fill that void. “In the old days we tried to develop a pilot program. We gave the business a floppy disk and manual, and failed miserably. But with APEX it’s all Web-based. We’re starting to see business members and SEGs really start to use this as an origination tool,” said Kenealy. APEX is the Web-based ACH solution of U.S. Central that corporates can offer their member CUs. Kenealy said about 100 of SunCorp’s CUs are on the system. Mike Paton, vice president of marketing for Corporate One CU, Columbus, Ohio, said Corporate One has been talking with the Member Business Services Task Force of the Ohio League to find out what CUs are looking for in the business arena. The corporate has already adjusted its product line to help CUs better serve businesses. “We’re rolling out a new ACH origination product that we feel will make it easier for our members to make ACH origination available to their business members. We’re also making available a business debit card program,” said Paton. The corporate plans to, at no charge, help CUs with the legal documentation requirements of serving businesses. Paton said corporates should only get involved in the areas where they can add significant value in the business realm. “We have been looking at things such as payroll services, Treasury management services. The things that smaller businesses need and would get from a traditional commercial bank,” said Greg Gallant, president of SmartSource Solutions a CUSO of Constitution State Corporate CU. Gallant said SmartSource hopes to roll out some kind of menu of business products by the end of the year. But he said CUs are going to have to make a bigger dent on the business lending side before these ancillary services will take off. “Small businesses will tend to do business with the financial institution that’s providing them with lending. For credit unions that’s just not been a core competency,” said Gallant. [email protected]</p>