CO-OP makes a branch purchase deal with Public Service CU.
CO-OP Financial Services announced Thursday that it is selling off its standalone branches in the Detroit area and has another up for sale in Maryland, allowing the payments and financial technology company to effectively exit the business of direct branch ownership.
The Romulus, Mich.-based Public Service Credit Union, which has $276 million in assets and about 31,700 members, will be the new owner of several of the Michigan branches, according to a joint press release from the credit union and the Rancho Cucamonga, Calif.-based CO-OP Financial Services.
"After much strategic study and consideration, CO-OP is divesting from the operation of 10 standalone shared branches, nine in Michigan and one in Maryland. Seven branches in Michigan have been sold to Public Service Credit Union, and employees of the two others will also become employees of Public Service CU," CO-OP Financial Services spokesperson Bill Prichard explained in a statement to CU Times.
The newly-acquired Michigan branches, which are located in Detroit, Garden City, Redford, Southfield, Taylor and Ann Arbor, will go to Public Service but will stay in the CO-OP shared branch network and operate under the Credit Union Family Service Center name, CO-OP said.
"Each location will continue to operate without significant changes. Public Service Credit Union will respect and maintain the integrity of the shared branching agreements as we have always done with our shared branching locations," Public Service President/CEO Dean Trudeau said.
Public Service's members are the second-highest volume users of the Michigan standalone branches, CO-OP noted.
"The Maryland branch remains for sale and will close in late June if it remains unsold, and staff is aware of this difficult decision. CO-OP will not have ownership of any other branches," Prichard added.
In a public statement, CO-OP Network's new president, Jim Hanisch, who is CO-OP's former COO, said the decision to unload the branches came after careful strategic study and consideration.
Prichard added that finding the most efficient way to operate shared branching was part of a commitment to growing the CO-OP shared branch network.
"These locations, as standalone branches, do not serve the strategic interests of CO-OP, but we believe they can have great value to a credit union. These branches are profitable, and there is great potential for a successful outlet owned and operated by a credit union," he said.
The terms of the deal were not disclosed.
The CO-OP shared branching network currently includes about 5,700 branches and 1,800 participating credit unions.
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