Now her CU, which serves employees of the office products firm, is looking to join up with "other like minded credit unions who see their future in workplace growth."

"We're convinced that the way to grow is through SEGs and based on what I've learned that as a community charter, you simply can't compete with the big boys like BofA or Wells Fargo," said Freeborn, the former head of Kinecta CU.

Under its current schedule, Xerox FCU plans to change its name by next February "under a soft timetable" and his hired a St. Louis firm, Newground, to research new branding.

At the same time, Xerox FCU expects to open a $20 million headquarters complex in El Segundo by April and add the 10 branches in its three major markets here, San Jose and Rochester, N.Y.

In an interview, Freeborn acknowledged that the changes at Xerox–including a $1.4 mllion loss for the first three quarters–have been not come without cost but they have been anticipated.

"We're not shy about seeing a little red ink," declared Freeborn, stressing the CU remains financially healthy as it embarks on its broad strategy put formally into place little more than a year ago.

As part of its remake, the CU said the new branches will have a "retail look" in a move away from the standard teller-work stations of existing CU branches.

"We are looking at renaming our tellers as universal associates who can migrate through the office complex as they service members," said a spokesman, noting all the details are yet to be worked out. However, the model branch is expected to open in February next door to the CU's headquarters.

In a backgrounder statement outlining the rationale for its makeover and problems with community growth, the CU explained that it had experienced "a steady decrease in retail membership in recent years" related to various ventures.

"Until recently, membership growth was fueled primarily through our indirect auto lending CUSO, Credit Union Auto Finance, in Rochester, NY," the statement said. "Despite cross-sell efforts through direct mail and outbound telemarketing, these consumers did not develop a relationship beyond the minimum share requirement and an auto loan. As the loans paid off, memberships closed."

Now, continued the release, "an entirely new and highly focused business model was designed around being a niche player endorsed by our sponsors and partners — a "workplace credit union."

In the future, Xerox FCU "will aggressively target SEGs in our priority geographies and industries and deliver "private banker" level service to members of all means. We will simplify our products and processes in order to make every interaction quick and effortless."

The CU said it would provide members "a trusted source for financial information and education — even for non-members."

"Advertising and sales activities will be focused on SEGs," of which there are now 100, said the report noting a new Business Development Department is being set up.

The CU said it obviously "will be investing heavily in technology and people" and so such activities "will negatively impact earnings until 2010. With a net worth ratio nearly 12% and solid asset quality, we believe this investment strategy presents the best long-term usage of our members' capital," the CU concluded.

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