"As you can imagine, we have studied this for a long time," said Carroll Beach, CEO of CUSC. "And we decided to move now because it seemed to us that the increased synergies and the increasing pressure for higher transaction volumes in the future mandate that we take this step for the good of credit unions."

Beach also noted that the deal would allow CUSC credit unions to have access to more financial services at better prices.

Hollen cited some of the same factors as Beach, but also pointed out the deal fits well with CO-OP's renewed focus on shared branching as one of the services and areas of expertise that CO-OP will offer CUs. The deal will also help CO-OP expand its geographical reach in the Southeastern and Eastern parts of the country and expand its ability to offer shared branching to more credit unions, Hollen said.

"I think it's important to remember that most credit unions in the U.S. still do not use shared branching, for a number of reasons," Hollen said. "One of the fallouts from this announcement is that we have heard from a number of credit unions who said they are willing to take another look at shared branching now." Hollen also stressed that the deal was important to CO-OP's "renewed commitment" to shared branching as part of its overall mission to become a source for multiple financial services for credit unions. Interestingly, technology played an important role in making the deal happen now, according to both leaders. CUSC has almost finished switching all of its 760 participating credit unions to its new Next Generation Switch, the only credit union-owned data switch available to credit unions and one which allows much more data to be included in shared branching transactions. Hollen said CO-OP had been impressed with the switch and getting access to it for its shared branching credit unions became an important spur toward making the deal. Average credit union members who use shared branching should not notice any differences since the new organization will continue to use the "CU Swirl" branding campaign that has been used to identify shared branch outlets. Credit union participants in both networks should see lowered prices from increased transaction volumes and greater access to services, particularly for CO-OP shared branching outlets, which will gain access to the NGN switch.

One factor that also helped the deal was the little known fact that both networks use standalone outlets that are generally owned by the network or by CUSOs. CO-OP's shared branching has long been affiliated with the standalone outlets, but Beach said CUSC is also affiliated with 85 of them as well.

Since the organizations have only signed a letter of intent, each leader noted that they were only taking the first step in the merger process. CUSC member credit unions will have to vote to approve the deal and both sides will have to work toward preparing a definitive agreement. There are no particular regulatory hurdles and both leaders expect to have the transaction completed by the end of the second quarter of this year. –[email protected]