CHEYENNE, Wyo. and SALT LAKE CITY -- For years, the runningteaser between Meridian Trust Federal Credit Union and Utah PowerCredit Union involved finding a way to link up to serve moremembers even though both financial institutions were as differentas they come.

Other than sharing the same data processor, both credit unionsdidn't have that much in common when it came to field ofmembership. The $159 million Meridian Trust FCU was founded in 1954to serve state of Wyoming employees and later evolved to amulti-SEG institution serving more than 18,000 members. The $250million Utah Power CU got its start in 1935 for Utah Power &Light employees and with more than 16,750 members, remains a singlesponsor, state-chartered credit union to this day.

Meridian Trust, with five branches throughout the state, waslooking to expand its presence in the western part of Wyoming, saidKim Withers, president/CEO of the credit union. Utah Power hadfound that many of its members lived in the Rock Springs, Wyo.area, but charter and regulations prevented the credit union fromventuring across state lines, said Ryan Pollick, vice president oflending and marketing at Utah Power.

The idea to launch a shared service CUSO ultimately became thesolution to accommodate members at both credit unions. On May 30,2006, PowerTrust opened its doors for business in Rock Springs.Here, Utah Power and Meridian Trust members could make deposits andwithdrawals.

"We came to this partnership in sort of an odd way," recalledWithers, who is also chairman of PowerTrust. "We've had arelationship with Utah Power for many years because we're on thesame data processor. We would always joke 'if you needed to orwanted to partner...' The timing was right for both of us."

This wasn't Meridian Trust's first venture into the Rock Springsarea. In the late 1980s, it had a branch located in a nearbylocation, but it was very expensive to maintain, Withers said.After a depletion of energy resources, such as oil and coal,impacted Wyoming's economy, the branch was closed down and "soldfor pennies on the dollar."

Meanwhile, Utah Power's nearest branch for Rock Springs' memberswas 190 miles away in another state, Pollick said.

"What we found to be interesting is our members really wanted usthere [in Wyoming]," Pollick said. "They were literally begging usto have a presence there."

When the discussions began in late 2005 to roll out PowerTrust,it was agreed the credit unions would split the start-up costs downthe middle, which came out to be under $100,000, Withers said.Starting next year, PowerTrust will implement a pro ratatransaction system. Using a CUSO eventually slashed branch expensesby 70% for Meridian Trust. Net income for the first year ofoperation was $38,000.

Selling the CUSO to members has been surprisingly easy, saidPollick, who had concerns that some would be leery of doingbusiness with a subsidiary that, when said out loud, did not soundlike it had a direct tie to Utah Power. The CUSO is currentlyaveraging 1,000 transactions per month. Nearly 170 new members havejoined both credit unions. The average loan balance for MeridianTrust and Utah Power for members using the shared service CUSO is$11,796 and $4,189, respectively. The average deposit balance is$7,338 for Meridian Trust members and $3,512 for Utah Powermembers.

PowerTrust also ran a number of campaigns to drum up business.Meridian Trust kicked off a "Crazy 8" special where membersreceived 8.0% on a new share certificate that required a $1,000maximum with e-statements. Utah Power rolled out a "Come in, Cashin" promotion that entered every member transaction into a drawingfor $250. Transactions increased 30% the month the promotion ran.More than 200 members came and picked up their free hat, mug orflashlight after the CUSO invited them to stop by during theholidays.

Pollick and Withers said both credit unions looked at otheralternatives to starting their own CUSO including partnering withsome of the industry's well-known, national shared servicenetworks. It was soon determined that it would be difficult to usethe regular route of a shared service center, "because we wanted toestablish a center in places where it doesn't make sense for theregional CUSO to establish a stand alone service center," Witherssaid. Also, at some point PowerTrust may consider expanding beyonddeposit transactions.

Utah Power is also looking to expand in other parts of Wyomingthrough PowerTrust by the end of the year, Pollick said. So far, headmits, the biggest challenge has been the across statelines-commute.

"Administratively, PowerTrust is handled by both credit unions,"Pollick explained. "Logistically, the distance creates a little bitof an issue from time to time but our partnership has become sostrong that we're able to work through it."

From her perspective, Withers said PowerTrust's biggest hurdleactually came before the CUSO opened for business. The stateregulators and banking groups did not like the word "trust" inPowerTrust and the implication that it might be perceived as atrust services CUSO.

"The most difficult thing was getting the name passed inWyoming," Withers said. "The banking groups were behind this. Ittook longer than we expected it would."

To appease regulators and bankers, a tagline was added under thePowerTrust logo that reads "credit union service organization."

Another challenge has been the "extremely tight" labor market inRocket Springs, Pollick noted. The "booming" coal, oil and gasindustries in the West have led to more jobs than people and ashortage of housing to keep up with the growth. Pollick said ittook quite some time to find and hire PowerTrust's two full-timestaffers and to ensure that they would stay for the long term, theywere "paid at a premium."

Still, for a CUSO with just under a year under its belt,PowerTrust has proved that collaboration can boost the bottomline.

"We're not small but our size prevents us from doing some thingsthat the larger credit unions can do," Pollick said. "CUSOs canhelp find the right partnerships. I see our organization developingaround the needs of our CUSO."

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