Cincinnati-based Fifth Third Bank continues to gain visibilityas an alternative to corporate credit unions, but senior bankexecutives also made plain that their approach to credit unionsfundamentally differs from a corporate's. “For us, this is about abusiness relationship,” said Kevin Jones, vice president anddirector of correspondent banking. And this difference impacts therelationship on numerous fronts.

A natural person credit union has an ownership stake in itscorporate. Not so with Fifth Third, and that is crucial.

Understanding the differences, suggested Jones, is now becomingcritical because many natural person credit unions are uncertainabout what their next steps will be. Will they choose to putcapital into a corporate or will they seek out alternatives?

“Right now, many financial institutions are uncertain abouttheir next steps. They are hesitating to make broad leaps,” saidJones.

Another complication: “For some in credit unions, they see banksas a case of the Hatfields and McCoys,” said Jones. That is, asfundamental rivals, forever in opposition.

But more than 800 credit unions already have crossed thatperceived line and signed on as Fifth Third correspondent bankingcustomers, said Hideo Core, vice president and correspondentbanking team lead at Fifth Third Bank

By the numbers, Fifth Third said it has opened 23 new accountsfor credit unions to date in 2011. In 2010, it opened 88 newaccounts. In 2009, 63 new accounts.

Fifth Third declined to forecast how many new accounts it hopesto open before 2011 runs its course, citing the thick uncertaintiesin the credit union universe.

But, said Jones, “many credit unions are hesitating torecapitalize corporates. We are fielding many calls.”

Not every call is received with enthusiasm,however. Core indicated that the approximate minimum size creditunion for Fifth Third's correspondent services is $250 million.Smaller entities would be considered “if the business relationshipjustified it,” said Core.

Doug Wolf, vice president at CUSO ProDraft Services, whichbrings correspondent banking services to credit unions via FifthThird, said that of the 42 current credit union customers atProDraft, none are as big as $250 million. Many are under $100million. So, he suggested, there are ways around the stated FifthThird minimum.

What there isn't a way around is Fifth Third's focus on businessrelationships as a key difference to how it operates, said Jones.“What we are building are business relationships. There has to be abusiness case.”

Jones added that this extended to decisions to offer, or todecline to offer, lines of credit to credit unions. Fifth Third hasdeclined to do so in at least some instances. “We will take adifferent approach to extending credit to a credit union. We willbe extensive and thorough in our credit review. It has been anobstacle to some credit unions,” said Jones. “We will turn downrequests when we believe the institution is not creditworthy.”

Wolf at ProDraft indicated that none of the CUSO's customersthat applied for a Fifth Third line of credit have been turneddown, but, he said, the lines of credit offered have been smallerthan what a corporate might have extended. “These lines from FifthThird are meant as emergency, short-term loans.”

Added Jones: “We are looking for good quality customers whohappen to be in much the same business we are in, but we reviewthem as businesses. What we want are good quality customers to whomwe can provide services.”