Fill Corporates' Void Among NAFCU Unit's Priorities
If 2010 was any indication of just how busy NAFCU Services Corp. was, this year could be a repeat times two.
Much of the uptick in business came as a result of the shakeups within the corporate credit union network, said David Frankil, president of NAFCU Services, the wholly owned subsidiary of NAFCU. Founded in 1975, it has partnerships with a 28-member preferred partner program of suppliers that offer credit unions discounted affinity agreements.
Because the entity is a for-profit subsidiary of NAFCU, 100% of its profits go to the association at the end of each year to support their programs, Frankil said, adding NAFCU Services' financials are not public.
"One of our priorities since last year is to replace services offered by corporates," Frankil said. "In the past, with corporates, although there was competition, I don't think anyone would describe it as a free market."
Frankil believes one of the industry's best-kept secrets is the National Investment Fund for Credit Unions or NIFCU$. Since 1975, it has provided cash management services for credit unions' excess overnight funds. NAFCU Services is the sponsor of the NIFCU$ fund and Union Bank NA is its investment manager, trustee and custodian. HighMark Capital Management Inc. is the fund's investment adviser.
The goal this year is to ramp up the NIFCU$ alternative. For many credit unions, corporate credit unions have been the go-to for short-term investment management.
"It's always been managed out of the corporate environment, it's never lost a dime and only uses assets credit unions can invest in," Frankil said of NIFCU$.
NAFCU Services will also partner with ProDraft Services this year to offer its members correspondent solutions, payment processing solutions and EFT processing solutions. ProDraft, founded in 1985 as part of the North Dakota Credit Union League Service Corp. and then as a division of Midwest Corporate Federal Credit Union, beat out some stiff competition to become a preferred partner, Frankil said. The new alliance aims to fill a large chunk of service once offered by corporates, he added.
Many of the irons in the fire will continue burning in 2011 through another pact with MoneyAisle.com, which allows credit unions and banks to bid in live auctions so consumers get competitive deals on auto refinancing, new and used auto loans, certificates of deposit and high-yield savings accounts. More than 100 credit unions are signed on and the company said it expected to have more than 200 financial institutions on board at the end of 2010.
"It's sort of like a reverse auction. You pick the deal you want so you're not bombarded with spam. They're bidding for your business," Frankil touted. "It's almost like a turbo charge for an indirect lending program."
NAFCU Services also plans to build on the use of its CULookup.com website. Visitors can log on to find a credit union to join, compare rates and use a plethora of calculators to find out the costs associated with house and vehicle purchases as well as credit, savings and retirement planning. Frankil said that at the end of 2010, more than 800,000 calculations had been performed. Some 160 NAFCU members have already set up calculators on the site. Plans are in the works to link CULookup.com with MoneyAisle to create even more auto loan bid transactions.
An alliance with DigitalMailer, a digital communication and electronic marketing firm, will help increase the 8,000 to 10,000 monthly calculations already performed through the company's automated relationship builder program. At press time, several more partnerships were in the final stages including one for mortgage subservicing, Frankil said.