The number of shared branching transactions conducted by members of the 73,000-member, $1.5 billion Technology Credit Union suggests that losing shared branching services if it moved to a bank charter could have an impact on its members.
Technology CU posted a notice to its members about a potential charter change earlier in October and has scheduled a board vote on Nov. 2 to formally consider making an application. In order for the CU to change charters, a majority of members voting would have to approve it.
San Jose, Calif.-based Technology has not returned calls for comment on the potential charter change.
Technology is a participant in the Financial Service Centers Cooperative shared branch network and in its notice the credit union told members that if they use shared branching to make transactions as credit union members, they will not be able to do so as bank customers, though the credit union said this would only inconvenience “a small percentage” of members.
Technology also said its planned additional ATMs with deposit capability will ease some of that inconvenience and suggested the loss of shared branching would be worth it.
But records of the credit union's shared branch usage raises questions about the contention that only a small percentage of members use the service. According to those records, which are widely distributed among shared branching credit unions, Technology CU logged 75,000 shared branching transactions through the end of September, more than one transaction for each of the CU's 73,000 members, indicating that the service is used fairly vigorously.
Further, when asked about the impact of shared branching on a credit union's operations, Sarah Canepa Bang, FSCC CEO, said that many CUs look at shared branching transaction data and mistakenly assume that it is the same people over and over using the service.
“On the contrary, what we find is that it is different people using shared branching and they are often using it for more significant reasons that just dropping off a deposit or picking up some cash,” Bang said. “Our data shows that shared branching members are not using it to get five bucks.”
Canepa Bang also noted that other credit unions have found that increased ATM access had not eaten into shared branching use but had instead developed alongside it. “Credit unions with strong ATM programs and shared branching find members use both,” she said.