The Costco deal, said Hanisch, represents an extension of what the Ontario, Calif.-based CUSO says is a successful hookup with 5,500 7-Eleven stores for ATM/debit processing.

Costco, with headquarters in suburban Seattle, is the largest wholesale membership chain with 376 stores and $60 billion in sales. Hollen said because of prior arrangements with banks, both Oregon and Washington State will be off-limits to the ATM sharing deal for CUs, but other states where Costco has stores will be in play.

"All I know is that my wife likes Costco and I couldn't think of a better place to have the surcharge-free ATMS," said Hollen.

The Costco deal is unusual on two fronts, said CU executives taking part in the CO-OP shareholder meeting. First, Costco already has a CU history having been supported by CUs, but at the same time "it does offer loans and other bank-like services which would be competitive," said one California CEO.

In another area of expansion, Hollen told meeting attendees that beta CO-OP imaging deposit programs at ATMs are moving along rapidly with officials revealing two California CUs on track within the last

several months.

USA Federal Credit Union, San Diego, and California Center Credit Union, Rancho Cucamonga, are offering the envelope-free display service through CO-OP in a "top to bottom" arrangement from image capture and proofing to clearing. Both NCR and Diebold provide the equipment.

"There are 12 more credit unions going live on imaging deposits at ATMs with many more to come," forecast Hollen.

In highlighting what he said was future growth on shared branching, Hollen said "there are at least five large credit unions now ready to jump into shared branching," an important development in that field. He declined to identify any of them.

As another sign of what the CO-OP leadership said underlines its robust recent growth, CUSO directors announced a record dividend payout of $12.1 million and a $9.8 million allocated equity dividend to the 1,032 CU owners.

CO-OP also said it had $26 million total net income with the dividend distribution "establishing a new CO-OP standard for the 11th year."

"The cash and allocated patronage dividend, coupled with an already competitive price, makes the CO-OP Financial Services business proposition compelling for credit unions." said David Maus, CO-OP chairman

and president/CEO of

Public Service Credit Union

of Denver, in a prepared

statement.

Each of CO-OP's CUs receives a portion of the patronage distribution, which represents one-cent per ATM and point-of-sale transaction, concluded the release.

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