NAPERVILLE, Ill. - Even though competition has intensified in recent years, corporate credit unions still very much cooperate. Take $5 billion Mid-States Corporate and $450 million Kentucky Corporate for example. The two just announced that Mid-States will provide item processing services for Kentucky Corporate members. The partnership evolved from the closure of the Louisville Federal Reserve Office. The Fed was a popular processor for many of Kentucky's credit unions, and with its closure Kentucky Corporate sought out an alternative for its members. "This kind of falls in hand with Mid-States' philosophy. We're trying to partner as oppose to compete," said Mike Lee, Mid-States Chief Marketing Officer. Mid-States has said that it will aggressively compete with corporates that come into its core FOM, as it did with Corporate Central in Wisconsin, but it prefers to cooperate. This deal potentially gives Kentucky Corporate a closer bond with its members. The corporate has not offered any item processing services before, and in this effort its brand will be very visible. Kentucky Corporate said it chose Mid-States because of its pricing advantages and service track record. Here's how the new arrangement will work. Mid-States will be doing all back-office processing. Kentucky CU items will be warehoused at the Cincinnati Fed office. The Mid-States courier will pick up items from that office and drive them to Mid-States' Indianapolis item processing facility. The Indianapolis facility is the corporate's main item processing facility, though it also has one in Warrenville, Illinois. Mid-States started processing for Indiana CUs when it merged with INDICORP in the `90s. The added volume won't cause Mid-States to change much on the operational end. It already has seen many of its credit unions in Southern Indiana that used to process out of the Louisville Fed, transition to Cincinnati. Mid-States expects to be able to offer Kentucky CUs cheaper rates and more services than they had with the Fed. Mid-States has done this kind of deal before. It formed a partnership with West Virginia Corporate last year for item processing. That deal was also the result of Fed consolidation. West Virginia needed an alternative when the Fed's Charleston office closed. Kentucky CUs will eventually benefit from Mid-States' Check 21 efforts. The corporate is part of the Endpoint Exchange network and is currently exchanging roughly 2% of its items. Terry Faurote, VP of correspondent services for Mid-States, said don't expect Check 21 to take hold right away. "It's going to be a slow, tedious process. It's going to be a few years before Check 21 and electronification take off,' said Faurote. -email@example.com
In Wake of Fed's Louisville Closing, Mid-States Picks up Kentucky CU Item Processing Business
Want the latest credit union news?
Sign up for our free newsletter today! All the breaking credit union news and information you need to make the right decision for your credit union delivered to your inbox. For free!
Thanks for subscribing, you will start receiving the Daily News Alert tomorrow!