Small CU Joins The Online World (For Free) And Sees Numerous Options Ahead

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One more credit union just joined the Web. Most credit unions larger than $25 million in assets have had websites with homebanking for years, according to Callahan and Associates.

But the $28-million Pacific Bay CU only last month set up shop online.

"Now we offer everything that Golden 1 Credit Union offers," said Pacific Bay President Leo Hooper. "We just have fewer zeros added onto our assets."

In the past, the 4,600-member CU couldn't afford to build a virtual branch, Hooper said.

"When we looked at the costs initially, homebanking was cost prohibitive," he explained. "Small credit unions don't have the dollars that larger institutions have."

Up popped an opportunity in March for credit unions with fewer than 10,000 members to launch a turnkey e-branch-for nothing-courtesy of eBusiness solutions provider Cavion Plus.

Cavion Plus is not the first to open the web to small CUs. Two years ago, The Credit Union Journal reported that Orlando, Fla.-based Worldwide Interactive Services, Inc. was providing Internet banking with no sign-up or activity fees to CUs with fewer than 2000 members as part of a 'Free for 2003' promotion.

After the quick, no-cost launch with Cavion Plus, Pacific Bay CU will pay about $1,300 per year for the turnkey package, which includes a website, homebanking and encrypted connectivity, Hooper said.

For an additional cost, Pacific Bay added electronic bill pay and check image access as well. The Internet package should help stop the slow leak of members leaving PBCU, Hooper said.

Retaining members is a matter of "fierce" competition in the Bay Area, he added. Oakland alone boasts 25 credit unions, five of which are at least $1-billion in assets, he said.

"We expect to retain checking accounts now because we have full-featured access," Hooper continued. "We've had members worldwide chomping at the bit for this because they want the convenience."

The biggest draw for Internet banking may be from members who use the CU's audio-response system, according to Hooper. Hooper predicts that one-quarter of the nearly 500 Pacific Bay members that use audio-response will have signed up for homebanking by mid-August.

"Internet banking complements our audio response system," he explained. "Audio response doesn't meet the needs of people who want to reconcile an account or view a checking draft, for example. Internet banking is more appropriate for those activities."

The Mounds View, Minn.-based Cavion Plus is a Liberty Enterprises company providing eBusiness solutions to credit unions. Currently 11 credit unions, with assets ranging from $17 million to $142 million, have signed up for free start-up Internet banking.

CUJ Resources

For info on this story:

* Pacific Bay CU at www.pacificbaycu.org

* CavionPlus at www.cavionplus.com

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