Desert Schools, which like Service CU deals with Wal-Mart management in large part through a third-party, Financial Supermarkets Inc. of Cornelia, Ga., said it has "five or six more branches" on the drawing board during 2007-08 for Arizona stores.

Underscoring its claim for Wal-Mart success, Service said its Newington branch brought in $1.5 million in deposits in the first two months of operation with the other two on track to average $5 million a year.

"In our Newington branch, we opened over 25 credit cards a month, an extremely high number," said Karen Benedetti, vice president of marketing at Service.

Service said it is selling the same range of products at the Wal-Mart branches as it does at its 11 traditional branches "but our sales numbers are quite strong so for example in October, checking sales at Wal-Mart ranked No. 1 and 2 among all our U.S. branch locations," said Benedetti.

The facilities are also drawing new members and one of the in-store locations ranked second on that score with Visa and auto loans as top selling products.

The New Hampshire CU, she said, does offer "a unique service where we issue credit and debit cards on the spot–instant issuance–members also select their own PIN. This is available at all our branch locations worldwide and is a great service for members who need credit while they are shopping."

"Our Wal-Mart branches are in a business development period and the products that seem to be selling the most are checking, certificates and credit cards," said Benedetti.

Like other CUs in Wal-Marts, Service and Desert participate actively in the flow of store promotions and activities with employees in the aisles to greet shoppers and direct customers to find items throughout the store.

"We do many local, fun inviting events to build awareness," she said. "Our grand opening lasts for several days and we have refreshments for Wal-Mart shoppers passing by."

Also there are a variety of raffles and events for children.

At least once a month, Service holds a special "dress-up day" to get into the spirit of a particular holiday or sporting event and typically tie that into a product.

"For example, the in-store employees dressed like race car drivers around the time of a NASCAR race as part of an auto loan promotion," she said noting the branch is decorated with a festive auto theme complete with bright colors and balloons.

Both Service and Desert Schools said they follow closely the national fracas over Wal-Mart's now stalled bid for an industrial loan corporation to start retail banking in the stores, perhaps competing with CUs and banks.

Wal-Mart has insisted it has no plans to get into full-blown retail services and seeks the ILC to process card transactions, a claim doubted and protested by the banking lobby, which supports Congress clamping a prohibition on ILCs by retail chains like Wal-Mart and Home Depot.

Neither Desert Schools nor Service are in that vocal grouping, but top management admits Wal-Mart could one day morph into a vigorous competitor for financial services.

"That would be heavy competition and something I would not like to have happen," said Gordon Simmons, the president/CEO of Service.

Carlos Pacheco, vice president for branch operations at Desert Schools, said his Phoenix CU does find Wal-Mart competitive on the limited financial services it offers like money orders and gift cards. "They keep us honest," said Pacheco.

As for Financial Supermarkets, the Georgia vendor that installs the branches for scores of banks and CUs in U.S. grocery and other retail sites, Benedetti said the firm does serve as a "middle man before the branch is built."

Service, she said, does use their branch design team "and they provide sales training."

The Service staff, however, does "become quickly engaged with the local Wal-Mart store and district managers" and the Wal-Mart staff as the CU gets closer to opening the branches.

"FSI has been a big proponent of the importance of the local team relationship for team building/cooperative efforts," she said.

As for 2007-08, Service does expect to move ahead with its remaining Wal-Mart branches in New Hampshire including tentative plans for a Rochester unit in April plus facilities in Hillsborough and Hookset by January 2008. –[email protected]