4 Credit Unions Build Compliance CUSO: Onsite Coverage
LAKE BUENA VISTA, Fla. — In 2010, nine credit unions began early talks on launching a CUSO that could potentially provide relief from the rising expenses associated with compliance.
By 2013, four decided to move forward with each investing $250,000 towards the new entity. The $364 million Salal Credit Union in Seattle was one of the founders.
“We wanted to lower business risk and the cost of compliance reviews,” Russ Rosendal, CEO of Salal CU, told a breakout session at NACUSO’s annual conference Tuesday afternoon. “We talked about what services we wanted to offer, any future expansion and hiring a really good leader.”
That hire came in 2012 and after a year of more diligence work, including take a long look at hot topic regulations and risk assessments, the CUSO rolled out in 2013.
The CUSO’s goals included offering best-in-class compliance analysis, balancing internal and external resources, and providing a top-of-the-line experience to credit union members, Rosendal said.
So far, one of the CUSO’s credit union owners has saved $200,000 in compliance costs and another was able to reduce its technology costs by $50,000 to $150,000 per year. Rosendal said Salal CU is roughly six to nine months away from recovering its initial investment.
Looking ahead, the CUSO credit union owners are having discussions about whether to add more partners and going into a sales environment, Rosendal said, adding that he didn't want to state the CUSO's name because he didn't want to appear to be selling anything.
“One of the biggest things we need to worry about is the pace of regulatory change,” he added. “We also talked about whether any new owners would have an equal say in governance. We’ve had some good discussions but couldn’t come up with an easy answer to this.”
Rosendal said for the time being the CUSO will keep its roots in the state of Washington. Along with Salal CU, the other owners are $1.3 billion Gesa Credit Union in Richland, $2 billion Washington State Employees Credit Union in Olympia and the $509 million IQ Credit Union in Vancouver.
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