ONTARIO, Calif. -- For Stan Hollen and his family, the last few years have been all about transition and how to manage it.

In the last five years Hollen, now the CEO of CO-OP Financial Services, has moved from being CEO of the largest credit union in California, The Golden 1 Credit Union, to CEO of Liberty, one of the credit union industry's largest vendors. He now serves as CEO of CO-OP Financial Services, a cooperative that encompasses not only the industry's biggest surcharge-free ATM network, but one of the three nationwide shared branch networks, as well as a host of electronic payments services.

"It's been quite a bit of moving and change" said Hollen, showing a hint of understatement that has been something of a trademark, "but trust me, I don't plan on making any more moves."

That likely came as something of a relief to his family, which has been forced to share him with a demanding travel schedule and to maintain more than one home. The Hollen's have one home in Ontario, Calif., where CO-OP is headquartered and another in Minnesota, where the family moved after Hollen took the reigns of Liberty Enterprises, which is now owned by John H. Harland Company after a merger in late 2002.

"Our daughter Jayne is still a 16 year-old and so we decided to stay in Minnesota long enough to finish school where she is," Hollen explained.

The couple has one 10 year-old son, Eric, and three older daughters, Jill, Christina and Kimberly, who are rearing Hollen's four grandchildren in Utah and Texas, but he laughs that, at 57, he doesn't feel old enough yet to be called a grandfather.

The transitions that the family has made have mirrored at least the spirit of transition through which Hollen has had to lead CO-OP Financial Services over the last 18 months.

Significantly, when asked which of those might be the most important and the most lasting, Hollen responded with one that many outside of the cooperative may have missed--the decision to reverse a previous stance and to declare that former CUs that issue stock can no longer participate in CO-OP's surcharge-free ATM or shared branching network.

The decision, which was taken relatively quietly, was a significant shift for the cooperative. Previously, under former CEO Robert Rose, CO-OP had a more open attitude toward banks, even stock-issuing banks, participating in the ATM and shared branching networks. In fact, just two months before Hollen took the reigns at CO-OP, Rose, who was a leading advocate of banks participating in credit union networks, defended such arrangements in Credit Union Times.

"CO-OP Network is one of the last ATM networks owned by financial institutions," Rose observed. "And when it comes to delivery systems, community and independent banks have more in common with credit unions than with the big megabanks which are growing better at customer service," Rose said.

Some of Rose's thinking remains in the new policy, which allows former credit unions that remain mutual banks after conversion and do not issue stock to continue as participants. The one stock-issuing bank which still participates is Pacific Trust, which was grandfathered in under the new policy but which was asked not to advertise their participation widely, according to CO-OP. The bank participates in CO-OP's ATM network but does not trumpet that fact on its website and has only one link to the shared branching locator that the shared branching networks offer.

Hollen also explained that CO-OP had conducted a study through First Annapolis, a financial consulting firm, that found that even if CO-OP had decided to open itself to participation from banks, the overwhelming majority of the banks surveyed would not have been part of a network run and owned by credit unions.

Hollen explained that the significance of the change went beyond the relatively small matter of whether a few banks would be able to offer CO-OP surcharge-free ATMs or not. Instead, it represented the cooperative turning back to its roots in the credit union movement as a source and standard of its brand, of what it offered differently in the marketplace than all the other card processors.

"We just couldn't get big enough," Hollen said. "By that I mean that even if we adopted a policy of growth for growth's sake and took everybody and anybody as members, we still couldn't get big enough to compete with the biggest card processors. While, at the same time, we would lose the very identity which makes us different from everyone else," he added.

The goal, he explained, was to grow while at the same time maintaining the relationships and identity that the cooperative cultivated when it began as merely an ATM network.

That goal also helps explain one of what he calls his "pet peeves", the willingness of some credit unions to do business with bank firms and processors when credit union or cooperatively owned alternatives are available. "I will just never be able to understand that," he said. Credit Union 24, a CO-OP competitor in the ATM and EFT space, is currently switching over its processor to Fifth Third Bank. What's In A Name?

Making the shift from the name CO-OP Network to CO-OP Financial Services was a part of that shift as well, Hollen said. "We wanted to make it clear to people that while we're still the CO-OP, we are so much more now than just an ATM Network," he said.

Indeed, the cooperative sees itself now as a player in the broader ATM electronic payments market and not just as a provider of one payment channel, like the ATM. Not only did the CO-OP expand into shared branching when it merged with the former Service Centers Corporation, but the cooperative recently rolled out a debit rewards and gift card program which have been the traditional province of card processing firms.

"Probably the thing that will distinguish our new programs will be some pretty aggressive pricing," Hollen said, particularly for credit unions that already have a relationship with CO-OP. This is not to suggest that the cooperative has forgotten ATMs. Hollen estimated that roughly half of the credit union industry's ATM traffic is processed through the cooperative.

"We could do better," Hollen said. "Right now I think we have between 70 and 80 of the top 100 credit unions in the network; they all should be members. But we are continuing to grow steadily and keep moving forward."

Curiously, Hollen cited a need to do a better job of explaining to CUs the benefits of one of CO-OP's defining characteristics, the ability to take deposits at ATMs, saying that there were still too many CUs that did not understand how this could help revolutionize their member service--particularly as check imaging at the ATM continues to develop.

He also stressed that it has its eyes on the horizon as well. Recently, the CO-OP made an investment in Ensenta, the firm that writes software that can be used to drive ATMs, shared branching and other member service kiosks. While the CO-OP has been following the development of kiosks for shared branching, Hollen said that the cooperative has even more in mind as perhaps member service kiosks could start to pop up in lobbies and at the end of teller lines.

"What I think we really envision is a situation that is like what you see in airports now," Hollen said, "where members will have a bank of service kiosks to conduct transactions and the member service representatives will be on hand to help them navigate the machines or to correct any unique problems."

Hollen also hopes to continually improve CO-OP's collaboration with leagues and other credit union organizations and trade associations on common concerns and charities. CO-OP is a long time supporter of the Children's Miracle Network, and he expects that to continue. --dmorrison@cutimes.com

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For Hollen and CO-OP Financial, Challenge Is to Grow and Remain the Same

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