Used Machines, New Growth

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Marine Federal Credit Union is the largest financial institution in this coastal community northeast of Wilmington-despite the presence of several national and regional banks and two substantial credit unions.

According to two of Marine FCU's managers, a big part of the credit union's success is due to its automated teller machine strategy.

More specifically, Marine FCU has a network of 71 used, refurbished ATMs, and handles all maintenance, replenishment and balancing in-house.

Chuck Collins, MFCU's executive vice president, told The Credit Union Journal the mid-1990s decision to use refurbished ATMs instead of new machines has helped the credit union go toe-to-toe with Bank of America, Wachovia, and First Citizens Banks, and Navy Federal and State Employees Credit Unions.

"We knew if we wanted to legitimately compete in this town, we had to grow our ATM network and be there for our members. However, we couldn't afford to do so at the price of new machines," said Collins.

In 1994, the purchase of a new automated teller machine from NCR set the credit union back $30,000. "And that was just the tip of the iceberg," recalled Collins. Annual maintenance through NCR was $3,500 per ATM, and a major bank that services ATMs charged a whopping $250,000 annually for replenishment and minor maintenance of MFCU's then fledgling network of 13 machines.

Marine FCU learned about refurbished ATMs from a company called Atlanta Computer Group (ACG), which sold used machines for about one-third the price of a new one, he said. "These ATMs are reworked, repainted, function just like a new one, and, they are guaranteed by ACG," said Collins.

In addition to saving money in up-front costs on the machines, MFCU started its own maintenance program and formed balancing teams. The credit union hired a woman who had been laid off by NCR to head up its maintenance department, and it put together three, two-person balancing teams-mostly retired Marines working on a part-time basis-to collect deposits, carry money for replenishing the machines and perform simple maintenance tasks.

"These guys are as loyal as the day is long," said Collins. "And our maintenance people can field strip an ATM like a Marine can an M-16 (rifle)."

Bonnie Hall, senior manager of electronic card services, said the in-house maintenance and replenishment teams are a "wonderful program."

"We used to have to wait for days to have someone respond when an ATM went down. Now, we do it on the spot," said Hall, who has been with Marine Federal Credit Union since April 1994. "The people on these teams don't like arriving in the morning to find one of their machines went down overnight-they take it personally."

Growth Fueled By ATMs

Collins and Hall credited MFCU's use of refurbished ATMs with helping the credit union grow by attracting new members. "They are like little workhorses out there," said Hall.

Collins agreed: "When we first started expanding our network and installing machines in different locations, we assumed it would give relief to existing branches and machines. Instead, the new ATMs embellished what we had and attracted new activity."

Marine FCU's ATMs cover all of Onslow County, including the vast expanse of Camp Lejeune-a Marine Corps facility and the largest amphibious training base in the world. Some are in shopping centers, while others are in standalone kiosks.

Collins said the credit union discovered the latter serve as billboards, advertising MFCU's ubiquitous presence.

"Having all these machines so prominently located is great for us," he said. "Particularly the kiosk units with our name shouted out on prominent corners. I have people tell me they joined the credit union because every time they turn a corner, they see a Marine Federal Credit Union ATM."

The credit union says local residents do not have to travel more than a half-mile to find a Marine FCU ATM, and the number of machines is growing. Collins said merchants approach the credit union to request that ATMs be installed near their stores-and, in some cases, offer to waive the rent-simply to have MFCU members with cash in their hands near their premises.

Helping the 'Little Guy'

Not all of Marine FCU's ATMs are viewed as profit centers.

The 45,000 Marines, plus their dependents, living in and around Camp Lejeune have a need for quick access to small quantities of cash.

"Many of these people are young, and living paycheck-to-paycheck," Collins explained. "The average withdrawal at our ATMs is $54, compared to over $100 at other financial institutions. Our board of directors continues to harp on looking after the little guy. Our members cannot afford to take a $20 taxi ride to go the ATM, so we have installed many ATMs in remote and isolated areas on the base, even though we know they will never come close to paying for themselves. We felt this was the right thing to do to support both our membership and our core sponsor, the U.S. Marine Corps."

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