A Texas credit union is giving new meaning to the phrase, "know your customer."

The Houston Municipal Employees Federal Credit Union, which has $17 million of assets, has installed a biometric system that lets it identify retail customers by their fingerprints. The system uses scanners from National Registry Inc.

Biometric technologies, which identify people by physical traits, are used by only a handful of financial institutions. But interest in biometrics is on the rise due to increased concern about fraud.

Houston Municipal turned to biometrics after finding members would sometimes forget to bring identification when visiting retail offices. "They would rely on someone in the credit union identifying them," said Barbara Davis, the credit union's president and chief executive officer.

Houston Municipal's biometric system compares fingerprint images taken at the point of service to templates stored on the bank's systems.

The technology can be used for identifying users of automated delivery devices, such as personal computers or automated teller machines. But Houston Municipal has installed the system only in branches.

Though the branches did not have a high incidence of fraud, the credit union's executives were troubled by reports of increasing crime. "We were seeing a lot more fraud on television," Ms. Davis said. The biometric system "made us feel a bit more secure."

Though some members were wary of the scanners at first, most of the credit union's 16,000 clients are pleased with the service, Ms. Davis said. A customer can opt not to use the system, but none has done so yet.

A few "minor adjustments" had to be made in the first two weeks of operation, she said, but the system has performed smoothly since then.

A potential pitfall of biometric systems is failure to identify a customer, but Ms. Davis said this has not been a problem.

Houston Municipal is one of the few credit unions in the country using biometrics.

Purdue Employees Federal Credit Union in West Lafayette, Ind., began using finger-scanners in self-service kiosks last February. Through Dec. 1, about 1,500 of its 45,000 members had registered their fingers with the system, said Gail Koehler, the credit union's vice president for information services.

The biometric devices allowed $220 million-asset Purdue to expand its retail presence using the kiosks.

It currently has three kiosks and plans to install two more this year. The credit union has had little technical difficulty with its scanners, Ms. Koehler said.

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