ARLINGTON, Va. – In spite of feeling some pressure and even taking some lumps lately, the spirit of cooperation that has characterized the credit union industry from its beginning remains alive and attractive, executives who work close to the heart of that industry reported. Shared branching may be about the most financially intimate type of cooperation and incarnate the deepest of the industry's cooperative aspirations. In shared branching, credit unions trust other credit unions to serve their most important asset, their members, every bit as well as the they do and to stop there, not to try to lure them away from their primary CU home with other products or services. Shared branching, even more than surcharge-free ATM networking, distinguishes credit unions from banks and other sorts of for-profit institutions as it recognizes that all credit unions benefit from a willingness among single credit unions to trust and cooperate with each other. "You know, I think the cooperative ethic is still strong but it's under some pressure too," said Jim Hanisch, the senior vice president of CO-OP Financial Services, the parent of the credit union industry's largest surcharge free ATM network and owner of Service Centers Corporation, the nation's oldest shared branching network. Hanisch stressed that he remained optimistic about the industry's cooperative ethic and that his firm strongly believed in it and sought to encourage it among credit unions. "But I have been in too many meetings where, when we asked where a credit union faces its chief competition, the answer has come back `the credit union across town.'" In Hanisch's opinion, the growth in community charters and the pace of mergers have been among the two biggest culprits in putting pressure on the cooperative ideal. The community charters have prompted the idea that a credit union cannot look to merely a select pool of potential members with whom it has a chance to build a strong relationship, but must consider potentially everyone in a given community a potential member-if not one of theirs then of someone else's. The pace of mergers has heightened the perception as well, making it clear that the outcome of competition for members may be a CU's disappearance. But Sarah Canepa Bang, CEO of the Financial Service Centers Cooperative, disagreed. "We initially supposed that the community charters might make it more difficult to get credit unions to start shared branching," she explained. "But we have found that community charters have actually helped spur shared branching. All of a sudden a credit union has the very practical challenge of how to serve a much larger group of potential members, and building branches is expensive. Getting into a shared branching relationship can make a lot of sense in those situations." She also pointed out that shared branching, as an industry, had gotten a lot better at anticipating credit union concerns about it and at emphasizing the transparency that allayed CU concerns enough to let them go forward. "Transparency is key," she said. "With transparency, everyone can know and understand what is going on and why." Craig Beach, vice president with shared branching firm Credit Union Service Centers, also disagreed. He noted that CUSC had not noticed any up-tick in reluctance to join shared branching, in fact quite the opposite. "I think the credit union reaction to the spate of natural disasters that we have suffered helped make it clear that more cooperation, not less, is the way to go," Beach said. "You had credit unions not just using shared branching, but letting each other use their back offices, their other facilities, anything they could do to help each other get through what happened." Beach said that the combination of the need to prepare for disasters and the increased information which can be carried on the network's Next Generation Switch had, in his opinion, increased the desirability of shared branching and made it an easier sell. But Tom Reed, CEO of Encore Financial Cooperative, the financial services cooperative which has agreed to merge with CO-OP Financial Services, noted that while the sense of cooperation within the credit union industry remains firm on some levels, it had also started to weaken when it comes to the notion of CUs purchasing goods and services from within the industry whenever possible. "From my perspective, when a credit union goes with a CUSO or other CU industry-owned organization it knows that the firm is going to put money back into the CU industry in some way," he said, adding. "More and more credit unions appear to be opting for service solutions which are owned by banks and which will not put anything back in to help credit unions. It's a shame and I admit that I don't understand it."