Let's assume you know that your credit union needs to collaborate to reduce operating costs but are unsure of how to start down the path. A certain amount of planning is necessary, however, you shouldn't over plan and as a result never "pull the trigger." A collaboration is a relationship, not a transaction. Many changes and adjustments will occur as the relationship matures. Collaborations are never perfectly planned from the beginning. Having said that, it is important to define the expectations of the parties as to the scope of services, the level of services, how costs will be shared and how decisions are to be made. Once those issues have been agreed to and each credit union can make its own business case as to how the collaboration will benefit it, the collaboration can begin.

Start simple and realize quick wins. The easiest collaboration to implement is a service the credit union is already performing for itself. This costs the credit union money that it could re-direct to another service model. For example, every credit union has to perform compliance, collections, marketing, loan underwriting, internal auditing and bookkeeping. Pick one to implement. If more than one credit union can share the personnel and expertise, it is possible to realize savings.  Well-run CUSOs also realize increased service levels and expertise.

Do not assume that everyone understands what is meant by compliance services, loan underwriting services or other services you may choose. Be specific in your definition of what services will be provided and the expected service levels. Define the following: How are you going to share costs? Will it be equal sharing by the relative size of the credit union or by transactions? How much capital will be needed to break even? Will a CUSO be established or will the employee costs be shared by contract? Will the shared employee be employed by a CUSO or by one of the credit unions while the CUSO "rents" the time of the shared employee?  How will decisions be made? Will every credit union have an equal say or will there be unequal voting powers? How will credit unions be admitted to the collaboration and what is the procedure if a credit union desires to leave the collaboration?