Can Three Credit Unions Really Co-Exist In New Facility?

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Credit unions have often agreed to share office space in a crisis, such as following floods or fires. And there are, of course, numerous shared service centers operating that provide service to members of multiple credit unions.

But can three credit unions peacefully coexist in the same set of offices on a day-to-day basis, permanently?

Call FCU, Connects FCU and Richmond Federal Employees FCU are going to find out when Call FCU's s new "credit union mall" facility opens later this year.

Call CEO Roger Ball has been kicking the idea around for years: build a branch facility where members from several different credit unions all enter through the same main entrance and then head to one of the offices just off the main entryway.

Each CU has its own separate teller line as well as office space for signing up new members or taking loan applications, but they share conference room space and some common areas as well as a through-the-wall ATM. Six drive-up lanes on one side of the building are divvied up among the three credit unions, using remote teller screen technology and pneumatic tubes.

"This is supporting the movement, and it's Project Differentiation because you can bet that you won't ever see three banks get together to share a building," Ball suggested. "It's good for all credit unions because if this allows these credit unions to grow, it makes the whole movement stronger, and hopefully, this will be something other credit unions can try in other areas."

While there may be the occasional person who could join more than one of these three credit unions, their fields of membership are distinct from one another with very few similarities. Indeed, Ball made a point of finding two credit unions whose FOMs are disparate from that of Call FCU and from each other to lessen the competitive edge that might otherwise hinder the cooperative spirit.

The $51-million Connects FCU, for example, serves mostly Verizon employees and a few other SEGs. RFEFCU, with $27 million in assets, primarily serves federal employees and several SEGs.

"Our FOMs are mainly all occupational; there's not enough overlap to worry about," said Ball, whose $160-million credit union serves Philip Morris. "I'm really excited about this because I'm real concerned about the route some credit unions are taking with community charters and the liberalization out there. It creates greater competition, and I'd rather see credit unions work cooperatively."

Even with the relatively disparate FOMs, however, with family membership eligibility, there will be some overlap, but the CUs say that's all right with them.

"When a member walks in, (he or she) should just utilize whatever service best suits (him or her)," suggested Evelyn Dowdy, CEO of Connects. "You can find whatever you like out of all of us."

Still, Dowdy conceded this might not work for all credit unions, even though all three CEOs have said they hope their "mall" is copied by other CUs. "I don't think credit unions with similar fields of membership could do it," she noted. "When (Ball) was talking with credit unions in the area about this idea, he knew there were certain ones he wouldn't ask because the management styles were just too different or because the field of membership was just too close. The managers have got to get along for this to work."

With the significant cost and security advantages the "mall" affords the two smaller credit unions, which are not investing any money in the site or the facility itself-it will be a turn-key situation for them, bringing only their employees and their DP system to the office space they will lease from Call FCU-the only potential downside is one of identity.

"The only thing I can think of is the identity issue," said RFEFCU CEO Grace DeMeo, when asked about what disadvantages there were to sharing a branch rather than building a separate one. "Instead of one sign with just one credit union name on it, it will be one sign with three credit unions' names on it. But many of our members really embrace the credit union differences."

And the additional opportunities to cooperate far outweigh any identity concerns, she added. "There are so many things we can look at doing together, so many things we can piggy back on," DeMeo commented. "It's not just sharing some common areas, it's the opportunity to get in and start something."

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