Mountain West League Joins Plexcity
The Mountain West Credit Union Association said Monday it will purchase an ownership share of Plexcity, an Ontario, Calif.-based CUSO founded to consolidate and cut the costs of back office operations.
The Mountain West association comes on board with five other trade organization co-owners including the California and Nevada Credit Union Leagues, New Jersey Credit Union League, Maryland-D.C. Credit Union Association, Ohio Credit Union League and Hawaii Credit Union League.
Plexcity also serves NASCUS as a non-owner client.
“Plexcity’s solutions will translate into higher economies of scale, eliminate redundancies, allow for speedier and more efficient operations through a cloud-based portal, and help our association direct its full attention to serving member credit unions," Mountain West President/CEO Scott Earl said.
Plexcity, which officially opened for business on Jan. 1, 2015, reduces operational costs by standardizing the leagues’ back office functions of IT, accounting/finance and human resources, which are managed from the same technology platform.
Each league that joins Plexcity pays an initial share investment of $30,000. However, how much each league pays for Plexcity’s ongoing operations is determined by the amount of hours and personnel it uses for IT, HR and accounting/finance needs.
“The immediate effect of decreasing their expenses contributes to our members’ future stability,” Plexcity CEO Tony Kitt said. “All of our owners believe we are better at driving down costs together than we are individually.”
If Plexcity continues to be successful in attracting more members – something that will create more scale – Kitt said in an October 2015 CU Times interview the savings should far exceed the 10% seen in the organization's first year of operation.
Other trade organizations also have initiated collaborative projects to lower the costs of back office operations and other services.
In October 2015, the League of Southeastern Credit Unions and the New York Credit Union Association agreed to establish a jointly owned subsidiary to consolidate their back-office operations.
In addition, the subsidiary will offer services in communications, education, training and product development that are not state specific.
Both trade associations will continue to independently operate their local, state and federal advocacy programs as well as membership relationship activities.
This collaborative project is expected to take two to three years to fully implement.