Come One, Come All: New Texans CUSO Targets CUs, Banks, Others

CU Times Senior Staff Reporter

RICHARDSON, Texas -- Texans Credit Union plans to include banks and other industries among its target audience with the launch of Innovative Support Solutions, a new tactical services CUSO.

Launched June 15, the CUSO will provide risk management and fraud protection, operations and consulting services to financial services and related industries. The risk management arm includes transaction risk analysis and management and regulatory consulting services. The operations solutions division includes database management and information technology operations outsourcing while the consulting services division will provide core system implementation, integration and upgrade support.

Discussions on launching Innovative Support began a number of years ago when Texans CU President/CEO David Addison and Greg Gallant, executive vice president and chief operating officer, realized the benefit of providing risk management and fraud protection, operations and consulting services to credit unions. In November 2007, the credit union put together a financial plan and hired Ray Seefeldt to oversee the new entity.

According to Seefeldt, president of the new CUSO, the initial focus will be to target credit unions. Financial services and related industries will also be courted. The reason behind reaching out to a broader client base is closely tied to the Fair and Accurate Credit Transactions Act, which requires NCUA, other federal financial institution agencies and the Federal Trade Commission to establish guidelines to ensure the accuracy of consumer credit reports, Seefeldt said. Innovative Support is also looking to take its client base even further, possibly to restaurants that offer gift cards or auto lenders. Seefeldt emphasized that the core focus will be on credit unions.

"We followed the lead of the regulatory groups. This spans everyone, not just credit unions," Seefeldt explained. "FACT is FACT whether you're a credit union or a bank. The good news is it is transportable."

Innovative Support is ready to gain ground within the banking industry. Seefeldt said the $2 billion Texans CU will use the CUSO to implement a FACT plan for OBS Financial Services Inc., a Whitehouse, Ohio-based registered investment advisory and asset management firm it purchased in December 2007 that currently serves more than 50 banks. The acquisition builds on the 2001 launch of Texans Financial, an investment services subsidiary.

On the risk management end, Innovative Support will help its clients with a proactive approach to prevent identity theft through its Informant system. Seefeldt said Texans CU already had a robust risk management group in place in large part because of its fairly technologically savvy membership. For instance, a member who has traveled to Saudi Arabia and is using his debit card there will get a telephone call based on past transactions that showed no previous usage in the country, Seefeldt said.

Because credit unions need to acquire the proper amount of insurance to cover any potential losses for fraudulent transactions, the premiums and deductibles tend to be higher.

"We can get them to a point to create a situation that is financially tolerable," Seefeldt said.

Innovative Support's operations solutions division aims to aid its clients with content control. Heartland Marketing Group, the wholesale division of Texans Insurance Group, has relationships with 800 insurance agents. Seefeldt said at some point the CUSO wants it to gain additional licenses so that services can be sold through OBS, another of the CU's CUSOs. He used Heartland as an example of how Innovative Support plans to manage content remotely. OBS is based in Ohio, while Heartland is in Paris, Texas. The division is also set up to provide support for the various stages of collection efforts on delinquent accounts.

Under the consulting arm, the new CUSO plans to leverage integration services through a variety of vendor solutions, Seefeldt said.

"We have been approached by a variety of small group alliances that are doing [integration services]. Our plan is to aggregate those loose alliances of independent consultants so that credit unions have a broader implementation process."

For many credit unions, having a database administrator on staff can be a costly addition--"It's hard to get them and if you do get them, they're hard to keep," Seefeldt said, adding they are considered the "neurosurgeons of the IT department." Innovative Support plans to provide high technical database services but on a scale that would be affordable to credit unions, he pointed out.

Given the number of other vendors that are already offering credit unions services similar to Innovative Support, Seefeldt acknowledged that if the CUSO did not have an alliance with Grant Thornton LLP, it would not be able to go to market with an edge. With member firms in more than 80 countries, including 50 offices in the United States, Grant Thornton International Ltd. is one of six global accounting, tax and business advisory organizations.

"We have all of the components for service delivery. We reached out Grant Thornton and they offered their input," Seefeldt said.

A FACT plan for a $200 million credit union can be developed for $4,000 thanks to a partnership with Grant Thornton, he pointed out. Costs for all of the CUSO's services vary based on asset size.

ISS is in discussions with the Texas Credit Union League to provide $500 scholarships to credit unions with less than $5 million in assets, Seefeldt said. Meanwhile, the CUSO is moving forward with plans to conduct six-hour informational seminars for smaller credit unions.

"The value proposition is significant because we provide [FACT services] through Grant Thornton," Seefeldt said. "We strongly believe no one can develop a better plan for cheaper."

While Innovative Support is still in its infancy, the CUSO has since established a pipeline within its transaction risk management and consulting divisions, Seefeldt said.

Texans CU is planning to continue expanding its product portfolio to beyond "the margin-shrinking retail banking product set," said Matt Davis, executive vice president and chief marketing officer at the credit union.

"If Texans is going to survive long into the future, and continue to offer the market leading rates, service and fees that we do today, we must endeavor to continually increase our service level and expand our margins to support the investments required to meet the memberships' needs and high expectations," Davis said.

--msamaad@cutimes.com

Clearview FCU Expands Check Cashing

PITTSBURGH -- Clearview Federal Credit Union said it is expanding its nonmember check cashing service again, this time to its Center Township, Chippewa and Hopewell Township branches.

Area residents can visit these Clearview branches and cash payroll and government checks for a fee of $2.00 per check. Residents do not need to be a member of Clearview or have an account there to use the service, according to the $650 million credit union.

In April, Clearview extended the check cashing service to its Brentwood and Kennedy Township branches.

--msamaad@cutimes.com