When Credit Union Times asked Fred Johnson, president/CEO for Credit Union Executives Society, what he sees as an emerging trend in the way credit unions are run, one of his responses was "collaboration."
Small credit unions may have few resources of their own, but if they share back-office responsibilities, data processing, compliance, marketing and human resources with other small credit unions, they can begin to function as if they were larger. For example, small CUs might team up and form a partnership with the same IT vendor, or they might share the services of a part-time collections employee.
It's a concept that allows the smallest, community-based credit unions to exist, and as long as members are given access to the products and services they need, the process in which they were made available to them is irrelevant, Johnson explained.
"A lot of small groups want to start their own credit union, but realistically, without the capital, they can't do it on their own," Johnson said. "Many community-based credit unions are doing this, and it makes a lot of sense."
One example of a back-office collaboration effort is that of Credit Union Resource Group, a CUSO started in 2004 by 15 credit union member-owners, including the Credit Union Association of Colorado (now Mountain West Credit Union Association). CURG now has 29 credit union member-owners.
CURG allows credit union member-owners to utilize services from its partner data processing, human resources, website development and payment card vendors at lower-priced group rates.
"Credit unions in general are burdened with a wide variety of back-office and compliance work, and small credit unions especially need help because they are smaller staffed," said Joy Audet, director of corporate communications for Mountain West Credit Union Association. "By grouping together, small credit unions can get the same services at lower costs. Collaboration is probably the most innovative solution for credit unions now. It's what they need."
Diane Tracy, senior vice president/chief financial officer for the $70.2 million, Northglenn, Colo.-based Horizons North Credit Union, uses the services of CURG's partner human resources vendor, the Miami-based ADP TotalSource. Working with ADP TotalSource directly, Horizons North CU receives payroll and benefits administration services as well as access to the vendor's professional staff, eliminating the need to hire a human resources manager at the credit union, Tracy said.
"This allows us to offer pretty robust and rich medical plans at an affordable price to our staff that we wouldn't have access to on our own," said Tracy, who was a founding CURG board member. "We are backed by [ADP TotalSource's] expertise and knowledge, and are able to stay up to date on payroll and human resources issues that are relevant to us."
Horacio Peralta, president/CEO for the $26 million, 2,700-member BCS Community Credit Union in Wheat Ridge, Colo., said his credit union has reaped many benefits since co-founding CURG in 2004. Before the CUSO's existence, Peralta said BCS Community CU operated an in-house data processing system, which resulted in an overload of back-office work, a frequent need for repairs, security risks and second-tier products and services. Additionally, BCS Community CU lacked a robust disaster recovery system and it could not sync its multiple banking platforms nor join the co-op shared branching network.
Banding together with other small CUs, some of which were experiencing the same difficulties, has enabled BCS Community CU to have more influence over large vendors, Peralta said. Now, the CU uses the services of CURG partner vendor INTECH, a vendor that serves large credit unions, at the same cost of its old in-house system. BCS also outsources its payroll, tax and reporting services through CURG's vendor partnerships.
As a result, BCS Community CU enjoys automated data processing, integrated banking platforms that are updated in real time, a reduction in in-house labor, robust security and lower benefits and insurance costs.
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Natasha Chilingerian
Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.
