PANAMA CITY, Fla. — What WesCorp and Tyndall Federal Credit Union have been able to achieve with item processing shows just how dramatically Check 21 has changed the item processing landscape for both credit unions and item processors.
California-based WesCorp is based two time zones and a couple thousand miles away from Florida-based Tyndall FCU, but in the new world of image exchange, physical location, which has always been a critical component, has become irrelevant.
"The whole image processing world is allowing this kind of capability and what it's doing is allowing credit unions to have more choices," said Tony Kitt, senior vice president of correspondent services for WesCorp. Tyndall, which traditionally processed its own items, shopped around for a processor that could bring it full image exchange. It already had an existing relationship with WesCorp on the investment side. "We used to do it all ourselves. We had a proof machine here, did the encoding and filing and sending to the Fed. We estimate this is going to save us $500,000 to $600,000 a year in a combination of cost savings and increased investment income," said Tyndall FCU Senior Vice President/CFO Steve Ravin.
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The increased investment income Ravin references is the millions of dollars it will now be able to get processed, instead of holding overnight. "We were holding over about $4.3 million a day that we couldn't get processed in time for the courier to take to the airport to deliver to the Fed. We're reducing that by $4 million," said Ravin.
Tyndall is using WesCorp's IMAGEin item processing solution. The CU transmits approximately 10,000 to 12,000 items a month from its 10 branches to a central WesCorp location.
Ravin said the CU brought its branches live in stages, with the last branch coming live July 31. "It took about four or five months from signing the contracts until going fully live," he said.
Ravin said with Tyndall on Central time and WesCorp on Western time, the CU has until about 9 p.m. to get the items to WesCorp.
According to Kitt, WesCorp now has 70 CUs representing 254 branches in the queue for full image exchange.
"Our goal for the end of this year is to have 40% of our items exchanged," said Kitt.
One way to advance that is a direct exchange relationship it is working on with Bank of America. Kitt said because of Bank of America's strong presence in California, WesCorp handles a large volume of their checks. "What this connection means is that we can settle earlier. Because their volume is so great for us, it provides some economic advantages," said Kitt.
In this relationship, however, Bank of America is accepting WesCorp's items, but not sending to WesCorp. Of course WesCorp could hook up with Bank of America through one of the exchange networks, such as SVPCO, for accepting items.
Kitt believes the credit union industry will eventually consolidate to a few single points for exchanging items. The idea was floated a few years ago and is still being discussed among corporates and item processors.
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