Alabama League, CUSO Aims to Bring Multi-Layered Employer Services to Credit Unions, Small Businesses
BIRMINGHAM, Ala. -- Over the last 18 months, the Alabama Credit Union League had built up a respectable clientele for its professional employer organization services through its CUSO, Credit Union Business Services, LLC.
But the league wanted to turn the heat up a few notches especially since it had discovered there is a pent-up demand.
To that end, the league and CUBS voted Feb.16 to purchase CEBCO and CEBCO Staffing, a Birmingham-based professional employer's organization and temp-to-perm employment services company. The acquisition enables CUBS Resources Ltd., the league's umbrella group of subsidiaries, to service more than 100 companies and more than 2,000 employees in 15 states. CUBS is owned by 11 credit unions and the Alabama CU League. At press time, the deal was expected to be finalized, said Mark Cooper, vice president of CUBS.
CEBCO's array of services consist of payroll services, workers compensation insurance, group benefits, investment and personal insurance brokers, estate and business succession planning, 401(k) plans, staffing services, property and casualty insurance, and human resource services including hiring and firing and drug testing.
The discussions to beef up the league's PEO services sprang from figuring out more ways to help credit unions and serve small businesses with their payroll, insurance and various human and resources needs, Cooper said. With eight clients, PEO services weren't new to the league, but one major barrier stood in the way of expansion.
"We had a solid understanding of how to run a PEO. Our problem was distribution," Cooper explained.
In the fall of 2006, CUBS began its due diligence process looking at several local firms before hearing a suggestion from a CU CEO on looking at CEBCO. Some of the owners of the 13-year old company were getting close to retirement and were exploring the possibility of a sale, Cooper said. What sold CEBCO was its philosophy, nearly identical to the credit union industry's mantra. "They've built their business on not having customers but having members," Cooper said. "They had built a nice clientele over the years." CEBCO employees, including Ray Foushee, president and one of the company's founders, will remain on board. Cooper said Foushee had planned to retire soon but "changed his mind." The CEBCO name will also be retained, but it may change down the road to fit with the several subsidiaries under the league's CUBS Resources, Ltd. umbrella.
"We are very excited to have this opportunity to serve credit unions and their business members," Foushee said. "Providing these services helps free up the administrative burden for credit unions and their small business members, allowing them all to focus on growing their business, as opposed to worrying about the everyday regulatory issues of operating their business."
Cooper said as far as he knows, the purchase makes CUBS the only financial institution-owned professional employer's organization, administrative services organization, payroll, temp-to-perm agency, and insurance agency in the United States. CEBCO Staffing currently has 25 clients and with Alabama's heavy auto manufacturing landscape, Cooper foresees opening offices directly in credit unions to offer temp-to-perm employee assistance.
"What we're contemplating is putting together a teller pool for when a credit union needs someone to come in during peak periods or if they lose an employee," Cooper explained. While CUBS has already received inquiries from credit unions in other states, Cooper said for now, the focus will be on developing a presence in Alabama even though CEBCO is licensed to do business in 14 states. Over the next 90 days, CUBS will be converting its current clients so everyone is housed in one area. Distribution efforts to CUs, select employee groups and small businesses will begin almost immediately after that, Cooper said. CEBCO's purchase, price was not disclosed but Cooper said CUBS "will see more positive cash flow immediately." "Cost-wise, we already had enough money to put down on [CEBCO] without having to borrow a lot," he offered. "We think we can pay off the loan in under three years." CUBS is also willing to help other PEOs that are looking to grow, Cooper said.
"The credit unions in Alabama are working with so many small businesses. One credit union has 800 SEGs. This is truly an exciting time for credit unions to help small businesses." --firstname.lastname@example.org