Participating credit unions will be given the option to suggest projects and endeavors for the CUSO. All members-owners can avail themselves to any or all initiatives, Brown said. Member credit unions can decide which activities to become involved in. Some ideas may fall under incidental powers while others may not bring any liability to its owners, she added. If there is enough interest, the creation of a sub-CUSO for special purposes could move forward. Petro pointed out that not all ideas proposed will come to fruition.

While still in its infancy, some ideas are already starting to gather steam. For instance, five of the NorCal's owners are working on an indirect lending solution. Because of the liability that could potentially be involved, it will be a separate CUSO, Petro said. Another idea bandied about is shared staff services including hiring a compliance officer for all the representatives to have at their disposal.

"We're the largest in the group," Petro said of $84 million Tyco FCU. "Most of us are in a position to have full-time collectors, compliance officers and marketing people. One of the things we may end up doing is sharing those types of positions."

To that end, it was important that the new CUSO keep its target on smaller credit unions, Petro said. NorCal's owners feel that larger credit unions have more latitude when it comes to product and service development and most were not enthused about forming relationships with the bigger counterparts, she added. Petro even pitched the idea of upping the threshold for owners to $250 million instead of $100 million. Adamant about keeping its small-asset niche, the group shot the suggestion down. While NorCal has room for four more owners, Petro said the CUSO wants to get some of the operational processes out of the way before accepting any new credit unions.

The idea for the CUSO sprang from the CU Bay Area Executive Coalition, a group of northern California CU CEOs, who meet bimonthly for networking and information sharing. Even though the troupe is geared toward those with less than $75 million in assets, Petro was able to attend some of their meetings. One of the participants mentioned their displeasure with a large, well-known indirect lending CUSO, she recalled. Others also voiced their frustration with the same vendor. Soon, talks turned to forming an alternative solution but a model the group had proposed fell outside of the guidelines of incidental powers, Petro said. A credit union consultant suggested they create a shell CUSO and initiatives could then be run under that umbrella and the rest is history.

NorCal is scheduled to do a live Webcast in December where the group will meet to develop a template for proposing initiatives and formalize the process, Petro said. Subcommittees will also be formed to examine specific ideas. In January, the first round of proposals is slated to be presented. The owners will discuss whether the solution is worth moving forward and propose any alternatives. Petro said she is excited about the idea of pooling or sharing compliance resources.

Revenue for the CUSO's owners will depend on the service. Some revenue-generators could be things like a check-cashing facility or reverse mortgage solution, Petro offered. Tyco FCU has had a separate arrangement with a mortgage CUSO. However, as a group, NorCal could negotiate for a higher referral fee.

"As a small credit union with 7,000 members, I may get 35 basis points. As a group, we could probably get more basis points," Petro said.

In addition to Petro serving as secretary of the new CUSO, Linda White, CEO of United Health CU, will serve as CUSO chair; Don Winstead, CEO of Alameda CU as first vice chair; Diana Michaels, CEO of Western Healthcare CU as second vice chair; and Leo Smith, CEO of Bay Media FCU as treasurer.

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