Texas Branch Network Looks To Fill Void From CCU's Exit

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Texas Credit Union Service Center Inc., the operator of shared branching in this state, is working fast to fill a void to be left by a Community Credit Union, a credit union trying to convert to a bank and which TCUSC has told must leave the network.

Paul Ellis, vice president of the shared-branching network, said that the organization has a two-pronged approach as it moves to replace the 31 branches that belong to Community CU and which make up about a fourth of the 118-shared branch network within Texas.

Ellis said the first strategy is to work as fast as possible to get other participants in the network to open all their branches to the network. The other strategy is to improve communications to members about locations located near the Community CU branches.

Ellis said that the organization had "a joint decision" with Plano, Texas-based Community CU that its branches would leave the network. He said TCUSC felt it wouldn't be a good fit for the very simple reason "they are going to be a bank and we are a credit union." Moreover, he said there were regulatory concerns and "they didn't want to have any obstacles" in their attempt to convert, he said.

The Texas regulator must still decide on Community's application. Regardless of whether or not the attempt by Community CU to convert succeeds, their branches will stop belonging to the network by April 30, he said.

Ellis said there were also technical concerns on the side of both the network and the credit union that prevented the relationship from continuing. The network has already notified participating credit unions and is now looking into "how members affected by this will be serviced."

The decision does not mean that another credit union converting to a bank in the future will automatically be cut off from the network, Ellis said. "We would have to enter into negotiations to work out the process," he said.

The Texas Credit Union Service Center is part of the larger Credit Union Service Center Network, in which 1,070 credit unions participate offering 1,550 locations in 42 states.

Gary Base, president of Community CU, did not return telephone calls for comment.

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