PHOENIX - The arguments about mixing commerce and banking at Wal-Mart may be raging in Washington and in Utah, but credit unions here, in Ohio and Massachusetts continue to expand their footprint in retail stores.
The biggest expansion by far is that of the $2.7 billion Desert Schools Federal Credit Union of Phoenix which is making plans for seven in-store branches in Arizona during 2007.
It already has 19 facilities in Wal-Mart stores, having opened its first in metropolitan Phoenix in January 2004. Desert Schools ranks as the biggest CU player in the Wal-Mart financial network. Only a large Houston bank, Woodforest National, is thought to have more of the in-store facilities at Wal-Mart, which declines to formally identify its store participants by name.
Still Desert Schools management remains highly pleased about the steady growth in deposits, loans and members since it landed a Wal-Mart franchise.
One Phoenix facility has recorded a whopping 20,000 member transactions a month "with another opening 200 member accounts and another bringing in $1 million in home equity loans' during the same period, said C. Lee Brice, vice president of branch operations.
Meanwhile, the $130 million Chaco Credit Union of Hamilton, Ohio expanded its Wal-Mart presence last month by opening two in-store facilities in Cincinnati at Supercenters in Forest Park and Fairfield Township. The addition of the two new in-store branches brings to three the number of Wal-Mart branches for Chaco which a year ago opened its first facility at an Oxford Supercenter. "We've been very happy with the response and exposure we've been getting at our Oxford branch," said James Schultheiss, Chaco president/CEO. Like other CEOs of CUs with Wal-Mart branches, Schultheiss said he remains unworried about the retailer's entry into banking and, in fact, its proposed charter for an Utah industrial loan bank for card processing might be good for competition.
Through its own large card volume, he said, the retailer "might reduce costs" in the marketplace, representing an alternative on services offered by corporate credit unions.
In agreeing with Schultheiss on having a satisfactory relationship with Wal-Mart management, Brice of Desert Schools said her CU has long dealt with a third-party vendor, Financial Supermarkets Inc., of Atlanta which services both banks and CUs on setting up in-store facilities in Wal-Mart as well as in grocery stores.
"Wal-Mart might talk to me now but they didn't at the start," confessed Brice.
A spokesman for Wal-Mart in Bentonville, Ark. confirmed that Arizona remains "a key market for growth" in terms of building new stores with Texas currently having the largest number of stores. California is also a hot spot for more stores, he said.
Brice said over the last two years Desert Schools, as the state's largest CU, has become something of a source and authority for CUs on in-store marketing and servicing.
"We've fielded tons of calls and they even come from community banks," she said.
Though some CUs with Wal-Mart sites have complained about tight space limits in the stores, Brice said Desert Schools has been able to manage utilizing facilities averaging about 693 square feet, allowing for three stand-up windows and one for a sit-down spot for a manager. There are a few small sites with 500 square feet.
In Massachusetts, the $75 million ValleyStone CU of Wilbraham said it also is enjoying brisk loan business at its Chicopee facility though it has discovered marketing "and the need to get staff more sales oriented" quite different from other branches.
"But we get positive comments all the time about how our members and the general public like the idea of coming into the branches on Sunday and during extended hours in the evening," said Suzanne Boniface, marketing and business development officer. -email@example.com