As the new CEO of Southwest Corporate Federal Credit Union, I see the legacy of this organization's first two CEOs, John Arnold and Francis Lee. They and the other leaders of the corporate credit union network through the years have created an innovative and efficient system of support for the credit union movement that evolved as credit unions evolved, resulting in corporate credit unions becoming the trusted partners of their member credit unions. I would submit that now credit unions need a trusted partner more than ever in today's market as financial services become more sophisticated and their related implementation more complex.
What do I mean by trusted partner? I believe that a trusted partner is someone who listens to you, who intimately understands your business and works hard to deliver solutions to your needs. Most importantly, a trusted partner has your best interests in mind. Corporate credit unions are the trusted partners of credit unions.
Certainly corporate credit unions' roles have evolved over time as the credit union industry has evolved and become more multifaceted. In the beginning, corporate credit unions provided their members with a trusted partner from whom they could borrow money and a place to invest excess funds. Over time, the partner grew right along with the credit unions' need for a larger offering of more complicated products as demanded by the marketplace.
From the corporate credit union view, the early years were a time when credit unions had limited vendor options. Credit unions weren't large in assets and numbers of accounts relative to their counterparts in the banking industry; therefore, vendors spent more time pursuing banks. Over time, however, the market for the products and services used by CUs has become much more competitive as many service providers now target the CU market for a wide range of products.
But corporate credit unions have responded to both the increasing competition and growing needs of member credit unions by developing new products and services, hiring internal expertise, adding technical resources, and through active sales and marketing efforts. In other words, just as credit unions have evolved, corporate credit unions have also evolved and remain well-suited to meet the ever-growing needs of their member credit unions.
Think about the valuable services that corporate credit unions have brought to reality for their member credit unions-the settlement network, excellent liquidity solutions, high-yielding investments, ACH origination, imaged item processing, branch capture, asset/liability management and many other needed solutions. No doubt, corporate credit unions have for many years played a unique and critical role in the credit union movement-an integral, member-owned part of the infrastructure that supports the industry. And as we move into the future, this historic partnership is becoming more important.
Credit unions increasingly need a trusted partner that they can turn to for products that are becoming more complex. Branch capture with image exchange is a perfect example. Corporate credit unions can establish the necessary relationships with software and hardware vendors, and with the electronic exchange networks that make that product work effectively. Implementing that product alone would be difficult and inefficient for most any credit union and probably would result in a less efficient service in the end. In Southwest Corporate's case, we have established electronic image exchange relationships with Viewpoint, Endpoint and direct with large banks, which has resulted in much higher numbers of checks being exchanged electronically than an individual credit union would be able to get on its own, especially if its only exchange point was the Fed. The point is that tapping into a corporate's staff expertise, technological resources and processing volumes brings the opportunity for economies of scale required to operate an effective and efficient image exchange.
A 20 Basis-Point-Advantage
Another area where corporate credit unions continue to earn the label as trusted partner is investment services. If you haven't checked out the rates on share certificates at your corporate, take a look, especially if you are buying agency securities. The certificates at your corporate will beat agency returns by as much as 20 basis points. This benefit is possible because members of the corporate network have developed the investment expertise and the controls to be granted expanded investment and derivative authorities by NCUA. This expertise allows corporates to create a variety of share certificates that yield more than comparable agencies, including the popular structured share certificates. That's an easy way to put additional earnings onto your credit union's bottom line.
The legacy of this partnership between credit unions and corporate credit unions continues and has a bright future. Corporate credit unions remain uniquely positioned to meet the needs of today's credit unions through ever-increasing levels of staff expertise and technological resources, combined with a philosophy of always having credit unions' best interests in mind. It's who we are. Corporate credit unions are an integral and lasting part of the credit union system that created them. Over these many years of partnership, corporate credit unions can claim an important role in helping cultivate the success of the credit union system.
John Cassidy is CEO of Southwest Corporate Credit Union, Dallas. For info: www.swcorp.org.
