Virginia CUs, Members to Mutually Benefit from Virginia League's Relationship with Palmetto Coop Services

LYNCHBURG, Va. – Virginia credit unions and their members stand to mutually benefit from a new share draft processing relationship recently finalized between the Virginia Credit Union League and Palmetto Cooperative Services Inc., a wholly-owned subsidiary of the South Carolina Credit Union League. According to the arrangement, checks from members of participating credit unions will be received by PCS which will capture the data from the MICR line of each check and compile that data into a daily electronic file for each CU. PCS, in turn, will transmit that data file electronically to the credit union or their data processor, if they’re on a `batch’ or online system. Once PCS transmits the data file to the credit union, it will send another data file to the CU’s Settlement Institution such as the CU’s corporate credit union, letting them know the amount to debit from the CU’s account – Virginia Corporate Credit Union settles the checks for Virginia credit unions, and First Carolina Corporate CU settle the checks for credit unions in North and South Carolina. PCS provides share draft settlement services to CUs in the latter two states as well as Virginia. The amount that’s debited from a CU’s account is the total value of the CU’s daily share draft items, plus or minus any adjustments. PCS Senior Vice President Mark Curran said all of the item capture and data transmission happens well within the Fed’s daily processing timeframes. But operationally, he said. “PCS has more bells and whistles that allow it to deliver images to credit union employees and members at no fee, and that’s our key differentiator.” Members of credit unions that process items using the Fed cannot access images of their checks themselves. The federal agency, explained Curran, also charges financial institutions per click when they access images of processed checks. As a result of the Virginia Credit Union League/PCS partnership, members will be able to access images of their processed checks through their credit union’s home banking Web site. Curran said PCS doesn’t require that CUs use their local corporate credit union, “but we certainly do recommend it. That way, the whole share draft processing system stays within the credit union family in each state.” He added that, “It also allows both of these corporates to retain their member credit unions’ settlement dollars, which might otherwise be lost to a `foreign’ Corporate or other financial services entity Many other Corporates also provide share draft processing services, so we prefer to work with the local Corporates, who aren’t in competition with us.” The partnership initiative between the League and the service organization began about a year ago when the League approached PCS with the idea. A dozen credit unions were selected for the pilot. The chosen credit unions, explained Curran, tended to be large CUs and were deliberately selected to give PCS the critical mass the company determined it needed to get started to make the partnership worthwhile – a total of 1.5 million processed items a month. The largest credit union participating in the pilot, said Curran, has about 775,000 items a month. The Virginia League said more Virginia credit unions are expected to transition to Palmetto’s services in the near future, and now that the 1.5 million processed items-benchmark has been set, Curran said PCS doesn’t have to consistently hit that figure with Virginia credit unions. He emphasized that contracts are between the credit unions and PCS, and there is no deadline date for contracting for the services. -