Physical Combination of Images May Not be Necessary to Gain Economies of Scale With Banking Industry

LENEXA, Kansas – The credit union exchange strategic working group looking into how credit unions can best take advantage of image exchange in the future has put out a Request for Information to a number of large banks to gauge their interest in dealing with the credit union industry in a more streamlined way for item exchange. U.S. Central is the facilitator of the industry working group which is made up of corporates credit unions and league service corporation item processors. The group was formed earlier this year after talk of the industry, spurred mostly by First Corp and Northwest, forming some sort of national image exchange switch to get better pricing from banks and others. Austin Braithwait, vice president of member services for U.S. Central, said the RFI is due back Jan. 18 and the working group plans to convene again in February. “Banks are feeling their way through this as well. It’s still early on, standards haven’t been fleshed out,” he said. Braithwait said it’s clear that the item processing players in the credit union industry definitely want to collaborate on image exchange, but a national switch may not be the answer. “The one thing that has been a theme is let’s keep this streamlined, but not really invest in anything until we know where the road is going to lead,” said Braithwait. Braithwait said the industry may not have to make any physical technical changes to achieve aggregation with the banking industry for imaging. It could simply form a CUSO or some form of credit union alliance that is in essence representing the industry’s entire imaging volume and the banks could make deals with that entity. The advantage of doing it this way is there wouldn’t be much infrastructure necessary. Braithwait said it’s way too early to tell if that is the right strategy. He also emphasized that U.S. Central is only serving as a facilitator in this discussion and may or may not have a back-office role in the future depending on how things shake out. He noted that all sorts of individual deals between CU item processors and banks are being made throughout the country. Many CU item processors have direct send physical relationships with banks where they bypass the Fed. Those deals could simply be turned into imaging deals. For example, Corporate One has had a relationship with Bank 1 now, that could evolve into an image relationship. [email protected]