MIDDLETOWN, Pa. – Mid-Atlantic Corporate FCU didn't have much in the way of payment processing services when Ed Fox became CEO back in 1989, but Fox's correspondent banking expertise changed all that in a hurry. Most of Fox's career has been with a "bankers' bank." He worked in correspondent banking while with the Federal Reserve Bank of Philadelphia and at First Pennsylvania Bank (which later became First Union, eventually bought out by Wachovia). "A correspondent banker sells banking services to other banks. If you work for a big bank like I did, you used your excess capacity and expertise to provide services to smaller banks – payment services, wire services, loans and cash, anything they needed and couldn't get in-house," said Fox Sound familiar? That's exactly what corporates do for their credit union members. "So really I've been in correspondent banking for 25 years," said Fox. Fox was with the Fed during a very interesting time. "In 1981 because of the Monetary Control Act, the Fed had to start selling payment services they had always given away. I was hired to bring some professional sales expertise to the operation, selling their payment services. I really enjoyed it. It game me a real good feel for how a central bank operates exclusive of their regulatory functions," said Fox. He stayed with the Fed for nine years. Fox's career at the Fed helped him land the Mid-Atlantic job. "I helped the corporate provide share draft services and other payment services to credit unions in Pennsylvania, so I got to know them real well. When my predecessor retired I was one of the applicants." And to the Mid-Atlantic Board he had the right stuff, mainly great knowledge of correspondent banking services, something Fox would learn the corporate sorely needed. "When I came here the corporate was basically a pass-through investment service and wire service for its members. We were not involved in share draft processing. We launched a share-draft service in-house. The difficulty was it was about 12 years after everyone else got into the business, and these other people did it well." He said with good service and fair pricing, Mid-Atlantic was slowly but surely able to win business away from competitors. Today it processes about 400,000 share drafts a day to the tune of eight million a month. The whole process is handled out of Mid-Atlantic's headquarters which the corporate had built to its own specs back in 1999. "We have 125 employees, and the building is built for 220, so there's plenty of room for growth." Fox was also the right leader to have when NACHA made a major change in ACH transactions. "In the early 1990′s it required that all ACH be transmitted electronically. Most of our members were not able to receive them electronically. We put together an electronic receipt program. The Fed sent them to us, and we became the endpoint. We moved it on to our members, which put them in compliance with NACHA. A lot of our members wouldn't have stayed in the ACH receipt business without this," said Fox. Mid-Atlantic is now the largest ACH receiver in the third Fed district. Introducing share draft processing showed Fox could catch the corporate up to others, and the receipt program showed how quickly he could steer the corporate to head off a potential ACH disaster for some CUs. But what came later was one of the most innovative payment processing moves – Mid-Atlantic's entry into bill payment processing. Today the corporate has one of the best cooperative success stories to tell in the corporate network with seven other corporates partnering with Mid-Atlantic for its EBP services. There are close to 300 credit unions using its service, which is delivered through a Mid-Atlantic CUSO. But for Fox it was a move that sort of went against what he grew up in with correspondent banking. In some respects it would put at risk a paper share draft program the corporate worked hard to build. "We decided to do it because we were so successful in share draft processing. Conventional wisdom said this was going to change electronic payments. We were willing to cannibalize that share draft service to be a player in the future," said Fox. Mid-Atlantic jumped into this business at a time when the corporate network was looking for ways to do it collaboratively. "Because we felt we could do it on our own, we didn't want to tie in with U.S. Central and other corporates. They had problems coming to agreement on what was the right way to do it," said Fox. The fact that seven other corporates have chosen Mid-Atlantic's EBP program excites Fox, not just because it's a Mid-Atlantic product but because it shows corporates don't mind cooperating. Fox is a big believer in corporates' cooperative ways. "I'm proud corporates seem to be able to continue to work to do things together. Look at Corporate Exchange (a new corporate CUSO). Twenty-eight corporates were able to get together in less than a year to put that together," said Fox. He credited the leadership involved for bringing credibility to that effort. Still, one of the realities of today's corporate network is competition among corporates that didn't exist in the past. Fox said he's not the kind of guy that loves the competition or hates it, he just lives with it. "I don't think it's terrible, but I don't welcome it either. It was hard for some corporates, including me, to accept the fact that what was once considered our territory was now open for other corporates to come in and solicit. It was a cultural shock that took some time to get used to," said Fox. As for the ongoing corporate consolidation trend, Fox thinks it will continue, but he's not sure what's driving it. Fox said the oft-touted economies of scale reason doesn't make sense to him. "I don't know why any of us aren't large enough to survive on our own. If a $10 million credit union can survive, why can't a $220 million corporate?" When it comes to management style, a micro-manager Fox is not. "I'm a hands-off manager. I let my people do their thing. I challenge them and let them grow. I'm proud of the management staff we have. I've seen it grow and meet challenges." Mid-Atlantic's payment processing prowess is well-documented, but now Fox wants to give some more attention to the corporate's investment offerings, an area he admits could be even stronger. "We have made a big move to expand our menu of investment services by hiring a person with a Series 7 brokerage license. We now offer all brokered investments through ISI (a U.S. Central brokerage subsidiary) and we'll be participating in the new brokered CD CUSO also," he said. Looking at the industry, Fox's main concern is that credit unions don't get off track with their new business lending powers. Having come from the banking arena, he says that commercial services require a different discipline than serving members. "I have a concern that we utilize commercial loan authority properly. It's a great opportunity, but it has to be carefully exercised. Credit unions have to pay attention to getting the expertise they need," he said. Some corporates (Northwest Corporate was the first) have started business services CUSOs to assist their members in this complex area. Fox said look for Mid-Atlantic to get into business services very soon. Fox, 59, hopes Mid-Atlantic is his last career stop. He is only the corporate's second CEO. The first, John Bixler, is happily living retirement life, reported Fox, who sees Bixler from time to time. Fox is a native New Jerseyan, growing up in Camden County (South Jersey). "I'll always have a soft spot in my heart for New Jersey." He still vacations at the Jersey Shore in vacation hot spot Ocean City. Fox lives with his wife Joan in Middletown, Pa. They have three grown children and two grandchildren. His hobbies include gardening, salt water fishing and bird hunting. "I have a good bird dog, a Springer Spaniel, that I enjoy spending time with," said Fox. [email protected]

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