POWELL RIVER, British Columbia — CUSOs have become as important to First Credit Union as ferries and airlines are to residents of this community.Although Powell River is not an island, and is only 80 miles north of Vancouver, the surrounding inlets and mountainous terrain have so far prohibited construction of a highway. So the only access is by boat or airplane.That presented First CU with a challenge. Growth was going to be difficult. So in the mid-1990s the board and CEO wrestled with the question of how to diversify income. CUSOs became the answer.The credit union already had an insurance agency and purchased another.Today First CU, with $150 million in assets, has six CUSOs. Services also include financial planning, investments and a travel agency.President/CEO Dave Craigen explained that, because travel planning is a necessity for residents of the city, First CU figured a travel agency could provide a service members would feel comfortable obtaining from their credit union. Although a travel agency is not one of the services credit unions are allowed under provincial regulations, the agency is located in the First CU office and run by a licensed travel agent."It's been very successful, and it doesn't necessarily require complete ownership," Craigen said.He explained the impact CUSOs have had on the credit union."We have about $14 million invested in subsidiaries rather than the usual financial instruments," he said. "We're making 115 basis points. The average of all the credit unions in our province is 69 basis points. Of that 115 basis points, 110 is coming from our CUSOs. Last year we had a record year, and CUSOs contributed more than 50% of the income. This year it will be about 95%-95.6% as of August."Does a $150 million credit union have any disadvantage overseeing six CUSOs?"The biggest thing is we don't have credit union people try, for example, to run an insurance agency," Craigen answered. "There have been examples of disasters in our system when a credit union bought CUSOs and thought credit union people could run them. That's one thing I've stayed away from. I make sure I've got good insurance people and good wealth management people to run the divisions.""They can report to credit union people because, obviously, it's the membership's money, but you have to let them run the organization. A recipe for hard times is to take an existing operation, do a total cultural change and try to put an operational person such as a credit union office manager in charge."The challenge, he said, is to not bring too much of the credit union environment into a different business. The goal is to take the best of each and put it together.Craigen sees still more potential for both the credit union and the CUSOs. So First CU is rolling out a branding and name change effort. For example, the name of the insurance agency will be changed to First Insurance and use the credit union brand and logo."That will give me a branching opportunity in an already tested, somewhat lukewarm environment," Craigen said.The next level he's looking at is trust services. The credit union has an aging membership. Many of their sons and daughters have moved to other areas, and when they inherit money from their parents, they thank the credit union for taking care of Mom and Dad-then move the funds out of the credit union. First CU wants to set up an estate-trustee service the heirs can use.As for the economy, so far Canada hasn't been hit as hard as the U.S. Powell River relies heavily on the forestry industry-in fact, First CU was formed by millworkers when the British Columbia Credit Union Act was passed in 1939 and is the oldest credit union in the province.The timber industry has seen some slump due to competition under NAFTA and the economy has slowed. But as the figures supplied earlier indicate, the CUSOs have helped. For example, the insurance business is steady and renewal and retention rates are high.Craigen also sees the economy as a plus for wealth management services."People seek advice now more than ever. Our wealth management program-close to $100 million-is significant for a credit union our size," he said. "My plan is that, within three years, wealth management assets will be larger than the credit union's."Also in the works is growth of a partnership branch on Bowen Island, six miles away. Members in that community have a separate class of shares in First CU. They elect their own partnership board which reports to the First CU board but has a mandate covering local issues.While members of First CU pay $25 to join the credit union, people on Bowen Island pay $26. The extra dollar goes into the separate class of shares for the partnership branch. They have their own ATMs."In a few years we hope to say to the partnership board, 'Okay, you've earned $27,000. Here it is. We're not going to tell you how to spend it. You were elected by your shareholders. You know your community,'" Craigen said."That partnership is 15 months old, and we're having fun. Now we're also looking at how we're going to incorporate our CUSO services into that community. I think the next few years are going to be so exciting. We've been in a financial institution industry that's been pretty stagnant. We've reinvented ourselves in the past 10 years, and now in the next year we're going to have to reinvent ourselves again.""I don't know how people can come to work and not be excited."–[email protected]