CO-OP Sets Costco Deal, Credit Card Servicing
COLORADO SPRINGS, Colo. -- Embarking on several new expansion bids during the remainder of 2007, CO-OP Financial Services has signed a tentative deal with Costco Wholesale Corp. to provide ATM surcharge-free access at 350 of its stores and on another front is making plans for credit card processing by yearend.
"We hope to have our Costco agreement ready to go within 60 days," declared Stan Hollen, president/CEO of the nation's largest ATM/shared branch CUSO speaking here for CO-OP's annual meeting at the Broadmoor Hotel.
The credit card enhancement represents a broadening of CO-OP's plate of ATM/debit card/EFT processing services offered to 2,000 CUs across the U.S.
In pursuing credit cards, "we are simply filling out our product hand and responding to requests by our member credit unions for the service," explained James Hanisch, executive vice president/chief administrative officer.
The Costco deal, said Hanisch, represents an extension of what the Ontario, Calif.-based CUSO says is a successful hookup with 5,500 7-Eleven stores for ATM/debit processing.
Costco, with headquarters in suburban Seattle, is the largest wholesale membership chain with 376 stores and $60 billion in sales. Hollen said because of prior arrangements with banks, both Oregon and Washington State will be off-limits to the ATM sharing deal for CUs, but other states where Costco has stores will be in play.
"All I know is that my wife likes Costco and I couldn't think of a better place to have the surcharge-free ATMS," said Hollen.
The Costco deal is unusual on two fronts, said CU executives taking part in the CO-OP shareholder meeting. First, Costco already has a CU history having been supported by CUs, but at the same time "it does offer loans and other bank-like services which would be competitive," said one California CEO.
In another area of expansion, Hollen told meeting attendees that beta CO-OP imaging deposit programs at ATMs are moving along rapidly with officials revealing two California CUs on track within the last
USA Federal Credit Union, San Diego, and California Center Credit Union, Rancho Cucamonga, are offering the envelope-free display service through CO-OP in a "top to bottom" arrangement from image capture and proofing to clearing. Both NCR and Diebold provide the equipment.
"There are 12 more credit unions going live on imaging deposits at ATMs with many more to come," forecast Hollen.
In highlighting what he said was future growth on shared branching, Hollen said "there are at least five large credit unions now ready to jump into shared branching," an important development in that field. He declined to identify any of them.
As another sign of what the CO-OP leadership said underlines its robust recent growth, CUSO directors announced a record dividend payout of $12.1 million and a $9.8 million allocated equity dividend to the 1,032 CU owners.
CO-OP also said it had $26 million total net income with the dividend distribution "establishing a new CO-OP standard for the 11th year."
"The cash and allocated patronage dividend, coupled with an already competitive price, makes the CO-OP Financial Services business proposition compelling for credit unions." said David Maus, CO-OP chairman
and president/CEO of
Public Service Credit Union
of Denver, in a prepared
Each of CO-OP's CUs receives a portion of the patronage distribution, which represents one-cent per ATM and point-of-sale transaction, concluded the release.