FirstCorp to act as national clearing point for IPS Official Check program

<p>PHOENIX, Ariz. – After months of dealing with and getting over bureaucratic hurdles from the Federal Reserve Bank, FirstCorp has announced a partnership with Integrated Payment Systems (IPS) for the corporate credit union to act as a national clearing point for business checks credit unions use for accounts payable and the issuance of loan checks. Instead of the checks clearing at the Fed bank in Los Angeles, credit unions’ business checks will clear on a FirstCorp account at the Federal Reserve Bank of San Francisco, Los Angeles branch. The checks will have FirstCorp’s name and a FirstCorp routing, transit and account number printed on them. Additionally, fee income that had been earned by the Fed will shift from the bank to FirstCorp. “The fee income will remain within the corporate credit union movement,” said FirstCorp President Pete Pritts. Credit unions are charged a per item fee. That fee will cover printing, reconciliation, stop payments, and escheatment costs. Check images will be available 24 hours a day via the FirstCorp Web site. In addition, credit unions will be paid on 100% of outstanding checks and there will be no reconciliation for credit unions. FirstCorp will basically act in a back office capacity. The relationship will be between credit unions and IPS for the actual Official Check program. With the Federal Reserve Bank’s name off the checks, Pritts said the arrangement eliminates a major barrier that’s blocked IPS’ and FirstCorp’s ability to attract credit union business. FirstCorp has had a relationship with IPS, owned by First Data Corp., for eight years through the corporate’s official checking program. Pritts said FirstCorp and IPS had been talking for years about the two setting up a relationship to allow FirstCorp to be the clearing house for IPS’ Official Checking program. “We had to clear a lot of hurdles first,” said Pritts, not the least of which was FirstCorp had to set up a separate routing and transit number, and account number. It had to test the new numbers, as well as receive authorization from Arizona, where FirstCorp is chartered, and from California, where the Fed bank is located, to become a national clearing point. Sixty credit unions in Nevada, New Mexico and Arizona currently use IPS’ Official Checking program through FirstCorp. On average there is about $11 million in checks outstanding on any given day, said Pritts. FirstCorp’s plans include rolling the new partnership arrangement out to these 60 credit unions by August 1. But FirstCorp and IPS already have their site set on expanding the service nationally when it moves in to the second phase. -</p> <p>[email protected].</p>