COLORADO SPRINGS, Colo. -- Embarking on several new expansionbids during the remainder of 2007, CO-OP Financial Services hassigned a tentative deal with Costco Wholesale Corp. to provide ATMsurcharge-free access at 350 of its stores and on another front ismaking plans for credit card processing by yearend.

"We hope to have our Costco agreement ready to go within 60days," declared Stan Hollen, president/CEO of the nation's largestATM/shared branch CUSO speaking here for CO-OP's annual meeting atthe Broadmoor Hotel.

The credit card enhancement represents a broadening of CO-OP'splate of ATM/debit card/EFT processing services offered to 2,000CUs across the U.S.

In pursuing credit cards, "we are simply filling out our producthand and responding to requests by our member credit unions for theservice," explained James Hanisch, executive vice president/chiefadministrative officer.

The Costco deal, said Hanisch, represents an extension of whatthe Ontario, Calif.-based CUSO says is a successful hookup with5,500 7-Eleven stores for ATM/debit processing.

Costco, with headquarters in suburban Seattle, is the largestwholesale membership chain with 376 stores and $60 billion insales. Hollen said because of prior arrangements with banks, bothOregon and Washington State will be off-limits to the ATM sharingdeal for CUs, but other states where Costco has stores will be inplay.

"All I know is that my wife likes Costco and I couldn't think ofa better place to have the surcharge-free ATMS," said Hollen.

The Costco deal is unusual on two fronts, said CU executivestaking part in the CO-OP shareholder meeting. First, Costco alreadyhas a CU history having been supported by CUs, but at the same time"it does offer loans and other bank-like services which would becompetitive," said one California CEO.

In another area of expansion, Hollen told meeting attendees thatbeta CO-OP imaging deposit programs at ATMs are moving alongrapidly with officials revealing two California CUs on track withinthe last

several months.

USA Federal Credit Union, San Diego, and California CenterCredit Union, Rancho Cucamonga, are offering the envelope-freedisplay service through CO-OP in a "top to bottom" arrangement fromimage capture and proofing to clearing. Both NCR and Dieboldprovide the equipment.

"There are 12 more credit unions going live on imaging depositsat ATMs with many more to come," forecast Hollen.

In highlighting what he said was future growth on sharedbranching, Hollen said "there are at least five large credit unionsnow ready to jump into shared branching," an important developmentin that field. He declined to identify any of them.

As another sign of what the CO-OP leadership said underlines itsrobust recent growth, CUSO directors announced a record dividendpayout of $12.1 million and a $9.8 million allocated equitydividend to the 1,032 CU owners.

CO-OP also said it had $26 million total net income with thedividend distribution "establishing a new CO-OP standard for the11th year."

"The cash and allocated patronage dividend, coupled with analready competitive price, makes the CO-OP Financial Servicesbusiness proposition compelling for credit unions." said DavidMaus, CO-OP chairman

and president/CEO of

Public Service Credit Union

of Denver, in a prepared

statement.

Each of CO-OP's CUs receives a portion of the patronagedistribution, which represents one-cent per ATM and point-of-saletransaction, concluded the release.

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