6 Months Later, CUs Happy With Joint Branch

Six months after opening a jointly-operated branch here, the two credit unions behind the facility say they are both happy with the results.

The $700-million Arrowhead Credit Union, which serves 127,000 members, and the $180-million Norton Community CU, which has 18,500 members, opened a joint branch in this town of 43,000, 75 miles east of LA, in July.

Each "branch" has its own entrance from the outside, plus there is a connecting door inside, which allows members to walk from one to another.

Representatives of the two San Bernardino-based CUs said each has formed partnerships and shared space with other Inland Empire credit unions in the past, so the joint branch in Yucaipa was not unusual.

Valerie Spiro, VP-marketing and membership development for Norton, said the CEOs of the two CUs were together at a function when Yucaipa came up in conversation. "Arrowhead wanted to open a branch there, and Norton piggybacked on it," she said.

Norton Community was formerly Norton Air Force Base CU before the base closed in 1994. With its membership base shrinking, Spiro said, the CU converted to a community charter and began seeking out relationships with other credit unions. "Two of our three branches are shared branch environments," she reported.

Anne Benjamin, VP-corporate sales for Arrowhead, told The Credit Union Journal Norton leased the suite next to Arrowhead's suite in a Yucaipa shopping center, and paid for its own tenant improvements.

A 'Platform' Facility

Norton's portion of the shared branch is a "platform" facility, Spiro said. Norton members go there to open new accounts, apply for loans, process IRA transactions and resolve problems.

If Norton members wish to perform account transactions that require a teller, they cross to the Arrowhead side to use "video tellers." These new high-tech machines connect the member to a teller in the back office through a two-way videoconference feature. Documents and currency are exchanged via pneumatic tubes.

Norton pays Arrowhead a transaction fee for processing its members' transactions through CU Service Centers provided by the Financial Service Centers Cooperative (FSCC).

Arrowhead's Benjamin said, "The arrangement benefits Norton, because they didn't have to install a teller line. It benefits us, because we generate income from handling Norton's members' transactions.

According to Benjamin, Arrowhead in effect "shares" its branches with hundreds of other CUs in the Inland Empire by allowing members of other credit unions to visit its tellers and use its ATMs. Last year, Arrowhead processed 1.2- million transactions for members of other CUs.

"We wanted to partner with other credit unions before there was an FSCC network," said Benjamin, "because if you want to compete with Bank of America, with its thousands of branches, no one credit union can do that."

Both Benjamin and Spiro characterized the working relationship in the Yucaipa branch as "great."

"It is working very well," said Spiro. "The relationship between the two staffs is good, and they have built camaraderie."

Asked if the shared branch was a precursor to a merger, Benjamin replied, "No. Not at all."

Said Spiro: "You never say never, but I don't know about a planned merger. There is plenty of business in the Inland Empire. It is a partnership, and we are helping each other. We have a branch in Yucaipa, and they have traffic and income."

Benjamin agreed with Spiro's assessment, noting the two CUs have overlapping FOM. "We can co-exist in the Inland Empire together."