TALLAHASSEE, Fla. — There are signs across the credit union card space that credit unions are beginning to turn back to credit union owned and operated firms for solutions to their ATM, debit and credit challenges.

Credit Union 24, the large credit union-owned ATM and EFT network that is headquartered out of Florida, is the most recent to note this shift in direction, pointing to indications that credit unions have begun to put a greater value on credit union ownership of their vendors and networks.

“When a consumer of an organization's product or service has an ownership interest in that organization, it stands to reason that the organization is compelled to act in the best interests of that consumer,” explained Jim Park, president and CEO of Credit Union 24. “That model is paramount to the success of the credit union movement.”

In a prepared statement Park contended that more credit unions are realizing this value in the wake of large corporate mergers and buy-outs that can work to undermine the ideals that credit unions have historically upheld.

“Despite some bold attempts by some of these new entities to woo larger institutions off of credit union-focused processors and networks, credit unions generally have held firm,” the statement said.

Credit Union 24 has signed 15 new credit unions to the network so far this year, including $1.5 billion Tower Federal Credit Union, and has seen transaction volumes increase by more than 16% over the same period last year.

Credit Union 24 has seen record numbers of

new credit union network participants join the EFT cooperative, while transaction volume from credit union cardholders has also increased, the network said.

Credit Union 24 also said Central Florida Postal Employees FCU, NWS FCU, ETMA FCU, Augusta County FCU, Continental FCU, Connections CU, Ocala Community FCU, Phoenix Pride FCU, Coop Toledo FCU, Emory FCU, Dillards FCU, Tower FCU, HCA FCU, Florida Aircraft FCU and Mountain Empire FCU all joined in 2007 so far.

“Transaction volumes and new credit unions are both key indicators of the network's performance,” said Park. “Increases in those areas tell us that the transparent, democratic controls and shared ideals inherent in a member-owned cooperative are still compelling benefits for credit unions.”

Park points to the network's recent pricing overhaul as one of the benefits of working with a member-owned cooperative. “As soon as our cooperative found a way to increase credit union point-of-sale interchange income and reduce fees at the same time, we did it,” said Park. “Our pricing is based on cost, not profit. When we trimmed our costs, we were immediately able to pass the benefit directly to our credit unions.”

Credit Union 24 is only the most recent organization to report finding they have a marketing edge as a credit union owned and operated firm. Other credit union owned and operated card/ATM institutions include PSCU Financial Services, TNB Card Services, The Members Group, and CO-OP Financial Services.

Each of these is having a strong year and has pointed to their credit union ownership as a factor that is making them more attractive in the marketplace.

“I have been saying this for months so I am glad that other people are picking up on it,” said Stan Hollen, CEO of CO-OP Financial Services, the parent CUSO of CO-OP Network. “We think that it's high time that more credit unions brought their business to credit union owned cooperatives and away from banks,” he said, in a slight dig at Credit Union 24's use of a switch owned by Fifth-Third, a switch that Credit Union 24 in the past has credited, in part, for being able to lower prices.

Credit Union 24's spokesman Sean Dempsey anticipated Hollen's comment and argued that the switch was only a switch and that the control and benefits of ownership remained with Credit Union 24 and that those were the things that were attracting the additional credit union attention.

Significantly, both men agreed that it was the increase of economic metrics such as transaction volumes and aggregate card portfolios, in addition to credit union ownership, that has helped make credit union owned organizations more attractive. “Credit union organizations have become real players in these markets,” Dempsey said.

–dmorrison@cutimes.com

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