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GRAND RAPIDS, Mich. – When it comes to credit union cooperation on shared branching, the spotlight these days is on western Michigan with small CUs as the biggest cheerleaders of the trend-and with good reason: it’s cheap. “The costs are really minimal with just the transaction fees,” commented Vicki Lyon, CEO of the $26 million Grand Rapids Municipal Employees Credit Union, which by itself has only one branch to share “but now it’s a great way to have brick and mortar all over the state.” GR Municipal, which has separate contracts with 27 CUs across the state, is a member of Wesco Inc., a CUSO-based Kentland Mich., processor, which promotes the sharing concept as an inexpensive vehicle for CUs to get in on the trend without undue hardware or software overhauls. The Wesco co-op program, in which the CU-owned CUSO provides core data processing has been around for more than a decade, but its popularity has been on the rise as Michigan CUs continue to sign new separate contracts with one another to set up the shared pacts. Unlike the big national sharing networks, which in some cases impose higher fees but offer a broader geographic and processing reach, the Wesco program claims its flagship “CU*Base” product supports a CU’s “entire core data processing requirements.” This includes “electronic commerce and internet banking” enabling CUs to expand “member relationships and generate new profitable revenue streams.” As a CUSO, Wesco said it has 50-plus CUs as owners and services 125 CUs nationwide representing 1 million members. Two years ago, NACUSO named Wesco as its “Operational CUSO of the Year.” While many CUs like GR Municipal benefit from their tie with Wesco, several also maintain sharing contracts with Service Centers Corp., the Southfield, Mich. network which is part of the CO-OP system offering international and EFT services linking 14,000 ATMS around the globe. “We belong to SCC and Wesco and I think the organizations complement each other,” said Robert H. Mackay , chairman of Wesco and CEO of Berrien Teachers Credit Union of St. Joseph. His $162 million CU, located on the Lake Michigan shoreline, enjoys the linkup, he said, with CUs across the state particularly in the summer travel season “when there is lots of heavy traffic up north in the Traverse City area.” Berrien Teachers has contracts with participating CUs there, and “we simply pay the fees” which can range up to $1.50 per item at peak times. “But we do like the idea that we don’t have to pay any software costs to get in,” explains McKay. Lyon of GR Municipal agrees and says her CU is “constantly adding credit unions, and I think we have three or four lined up for next year in Grand Rapids, Kalamazoo and Frankenmuth” Dan Balagna, president and CEO of Service Centers Corp. in Southfield, said the Wesco concept “makes sense” for those CUs with specific, local needs but for CUs seeking “as much coverage as possible” they should also belong to SCC. He said the cost structure remains affordable for the small CU since “you only pay for what you use-no more” and you gain the advantage of a data line switch. Mackay said Wesco’s transaction usage with other Michigan CUs varies widely dependant on many factors. For instance, “one credit union using our facility 25 miles away has 914 transactions a month with us and in return we have 542 with them,” he said. Berrien Teachers has 523 transactions with a CU 90 miles away “and they have 65 with us,” he said. John Yeomans, president of the $98 million TBA Credit Union in Traverse City, said the Wesco plan has worked well for his members who sometimes do business or visit in Grand Rapids, 140 miles to the south. “We’re now looking at adding three more credit unions in Grand Rapids and Muskegon,” said Yeomans. Gary Schinske, president of the $59 million West Michigan Credit Union in Grand Rapids, said a major reason for his CU to switch processors to Wesco was the shared branching advantages. With one main office, West Michigan can now share throughout Grand Rapids, “and we now have 13 contracts” with CUs stretching all the way north to Manistee and west to Muskegon. Joni Shinn, a Wesco director and president of the $50 million Service 1 Federal Credit Union in Muskegon, said the shared arrangement has “worked wonderfully for us” and it would be “ideal” if there were Wesco processors in states where Service 1 has branches. Specifically, Service 1, formerly a Teledyne Corp. employees CU, maintains two branches in Neosho, Mo. and Mobile, Ala., but there are no shared pacts in those states. There are only 40 CUs which have Wesco shared agreements, and within that group they maintain 217 “actual agreements” among one another representing 67 branches. Wesco also maintains its CU*Base system is also used as a disaster recovery system. “In the event a CU office is disabled by a disaster, members can easily be directed to the alternate credit union branches they are already familiar with-giving the CU time to recover without interrupting service to members.” Wesco contends its shared branching system is based on the concept of CUs “creating relationships one at a time with other credit unions,” adding “there is no third party firm involved in this network.” The business relationships “are built between credit unions that participate in a technology CUSO that is also owned by peer credit unions.” -

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