First, the platform will make it easier and less expensive for CDCUs to develop and deploy new products, such as remote account opening as part of new member recruitment, and money management tools that can be integrated into transaction accounts.

Second, CU Impact will make it easier and less expensive for CDCUs to report performance data to the NCUA, the U.S. Treasury's Community Development Financial Institutions Fund and other agencies that award grants.

Third, it will lower processing costs to CDCUs by bundling key applications that are typically expensive individually and convert internal IT models to a cloud-based, resource-sharing model.

"EPL is thrilled to join the federation in their ongoing efforts to support the growth and technological advancement of credit unions operating in underserved communities," EPL President/CEO Wayne Benson said when the deal was announced. "Our team brings both decades of experiential know-how and a comprehensive core solution, i-POWER, that will add depth, functionality and expanded capabilities to the CU Impact platform. This partnership will not only help CDCUs effectively manage growth, but also provide an enhanced technical offering paired with a level of customer service deserving of any credit union member."

Benson acknowledged that developing the platform would challenge the Birmingham, Ala.-based company, but emphasized that CUSO representatives have already begun meeting with federation and CDCU executives to obtain feedback about the project in advance.

"I know federation members are really going to like having a core processor that is focused on what they do and how we can make it easier and less expensive for them to do it," Benson said, adding that the CUSO expected some CDCUs to begin using it by the end of 2016.

EPL was purchased by Italian FinTech company Dedagroup earlier this year and reported it serves 77 credit union clients. Dedagroup, which has created common core processing platforms for credit unions in Mexico and Canada, said it purchased a majority stake in EPL because it considered the CUSO the most likely firm to adopt its cooperative approach to core development.

EPL also named seven other credit unions and credit union organization owners. According to EPL's website, they are the now conserved, $598 million, Tuscaloosa, Ala.-based Alabama One Credit Union; the $1.8 million, Atlanta-based Georgia's Own Credit Union; the $408 million, Birmingham, Ala.-based Legacy Community Federal Credit Union; the $159 million, Colorado Springs, Colo.-based Aventa Credit Union; the $255 million, Gadsden, Ala.-based Alabama Teachers Credit Union; the $239 million, Gadsen-Ala.-based WinSouth Credit Union; the $278 million, Lawrenceville, Ga.-based Peach State Federal Credit Union and the League of Southeastern Credit Unions.

Benson explained credit unions that sign up for the CU Impact processor would sign contracts with EPL, but that the CUSO would work with them and the federation to develop and implement the platform.

He also made it clear that the firm sees possibilities for the platform beyond the CDCU segment, pointing out that many credit unions now recognize themselves as low-income institutions, and that more have applied to be recognized as community development financial institutions. These credit unions, he contended, may be open to a core processing platform that provides the cost savings and reporting benefits that CU Impact would offer.

However, Cornerstone Advisors Managing Director Brad Smith expressed skepticism in regard to how well EPL could capitalize on its new platform and convert a broad swath of credit unions beyond CDCUs.

"The less than $50 million asset credit union segment has been consolidating mercilessly and that, combined with EPL losing some of their key largest clients over $500 million over the years, may mean that this is a novel approach to generate some activity within small credit unions," Smith said. "But it won't move the needle for them in midsize and larger credit unions where the growth and core conversion activity is."

Smith said the core processing market has lost adaptability, and the conversion process has taken nearly two years for a growing number of institutions.

Timelines such as these raise the costs and trouble associated with making a core conversion so high, Smith said, that credit unions generally don't make them without a compelling set of reasons.

He also pointed out that the needs of CDCUs and larger credit unions deviate when it comes to core processing.

"I've been on calls with three different credit unions this week considering converting off of their existing core and the complaints were nearly identical: No innovation, lousy service, poor integration with third parties, weak reporting and lack of business lending and business payment functionality," Smith wrote.

EPL's new platform will not address most of those complaints, except perhaps weak reporting, and that alone won't be a compelling enough reason for medium- to large-sized credit unions to jump to the new processor, he added.

Even the biggest community development financial institution and CDCU in the country, the $6.5 billion Suncoast Credit Union, is extremely unlikely to switch to EPL, Smith said. He added that as committed as the credit union is to serving underserved and lower income communities, it's just very unlikely to happen.

Aspects of the new platform that will be must-haves for CDCUs will be nice-to-haves for the larger institutions, and credit unions won't switch core processors for nice-to-haves, he said.

However, Smith praised EPL for its spirit of innovation and putting a new processing model in place, even if it is primarily used by CDCUs.

"There just hasn't been any innovation in this space for so long, I have to cheer when someone gets up and does some," Smith said. "And for the CUSO it could work out quite well and give them a substantial niche, whether or not any bigger credit unions sign on at all."