ANCHORAGE, Alaska – Credit unions in the lower 48 states got ataste on 9/11 of what it's like for the country's airtransportation system to be grounded and to not be able to sendchecks for processing. That was fortunately only a temporaryinconvenience. But imagine working for a credit union in Alaskawhere bad weather year-round could prevent flights from landing, orbags of checks could be bumped for needed supplies. Add to that thefact of life in Alaska of knowing that in some areas planes aren'tallowed to land during certain times of the year. Alaska USA FCU,the largest CU in the state, faces challenges like these daily, asdo most of the 13 credit unions in Alaska. For them, Check 21couldn't come soon enough. The $2,297.2 billion credit union has 36branches, including seven in Washington State and 29 in Alaska incities such as Ketchikan, Juneau and Bethel in northwest Alaska,which Mark Johnston, vice president of central operations says isin one of the state's remotest areas and is accessible only by boator plane. “We face some interesting logistical challenges,” saysJohnston. “Credit unions in the lower 48 states can always drive orhave their checks transported by ground transportation if airportsare shut down.” For the past seven years, Alaska USA has been usingTWS System of Alaska a division of TWS Systems Inc., to handle itsitem processing. The company leases space from the credit union inone of its Anchorage branches located about five miles from thecredit union's headquarters. Checks from Anchorage branches aredelivered to TWS each day from 7-8 p.m. and are processed the sameday. Checks from Alaska USA's Washington branches are picked up byDHL and then flown to TWS Systems for delivery the next day. DHL,says Johnston, picks up at different times at different locations,and depending on where the checks are coming from, TWS receivesdeliveries several times during the day for the credit union. TWSSystems handles about 1 million items a month for Alaska USA FCU.Item processing is mostly done at night so processed checks areready to be sent to the Fed by midnight. Johnston admits that theAnchorage airport seldom shuts down, “probably because we're usedto dealing with bad weather,” he says. Still, he adds, “we rely onair transportation as a lifeline to the lower 48 states. We're at aclear disadvantage.” That's why he's looking forward to the passageof Check 21. It will make the check processing system moreefficient, says Johnston, noting that TWS Systems has a short timewindow to get processed items out. In addition, Johnston saidAlaska USA will save on operation costs because the credit unionwon't have to rely on courier service. “Sometimes the courierservice misplaces items or deposits,” he says. “In those instances,we have to go in and recreate the transaction.” More important,Johnston says Check 21 will mean Alaska USA will be able to processchecks from its remote locations on the second day and not bedependent on weather conditions. Until the legislation passes,Alaska USA is working closely with TWS Systems to determine whatequipment it will need to purchase for its remote branches.Johnston says the credit union realizes it may need to look atinstalling additional technology for these branches so they'll beable to electronically capture check images and send them to TWS.“Right now we're going through a period of structured chaos,assessing what we'll need and relying on TWS' expertise to put thenecessary imaging systems in place for us,” says Johnston. NorthernSchools FCU in Fairbanks also relies on DHL to get its items to theFederal Reserve office in Seattle every night. The $72 million,12,000-member credit union sends around 700 items a day to the Fedworth about $1 million. CEO Mike Lombardino says thecommunity-based credit union has a backup plan for thosejust-in-case times when planes aren't flying, but that involvestaking pictures of checks using a rotating camera with microfilm.Northern Schools FCU has considered implementing a contingency planfor a while, but Lombardino says “the cost is hard to justify”because of the relatively low volume of checks processed. Still hesays it would be worth the while for no other reason than to reducethe credit union's exposure to risk caused by releasing funds whena check is deposited but there's a delay in the delivery of checksto the Fed for processing. Lombardino agrees with Johnston thatCheck 21 will make the process of delivering imaged checks moreefficient and reduce operations costs. “It's a good move directedto moving us towards imaging and electronic processing and awayfrom paper,” he says. For credit unions in Alaska, that's a move inthe right direction, he adds. -

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