Time was when a credit union service organization (CUSO) was viewed as a hobby not a business, says Guy Messick, an attorney who over the past 25 years has had a hand in creating many of the estimated 1,500 CUSOs currently in existence. CUSOs have come a long way during that time.
“Now they’re a critical part of credit unions’ success,” says Messick, who’s also general counsel for the National Association of Credit Union Service Organizations (NACUSO).
CUSOs allow credit unions to reduce costs and increase income. In fact, Messick says, some credit unions today remain in the black largely because of the savings and income they derive from CUSOs. Without these collaborative enterprises, he adds, “the credit union industry would be much weaker.”
In the early days, credit unions formed CUSOs so they could provide services that, at the time, they weren’t allowed to offer themselves, such as investment services.
“That has evolved into leveraging the CUSO model to help credit unions become more efficient and share risks,” says Jack Antonini, NACUSO president/CEO.
Today you can find CUSOs that do just about anything credit unions need. Take, for instance, Buffalo Pacific, a CUSO that created Telepresence.
This offering allows users to “sit across the desk” from someone who might be a thousand miles away. The users interact, look each other in the eye, and soon forget the person isn’t actually sitting across from you.
This product could be a boon for remote service delivery. “The difference between Telepresence and video conferencing,” Messick says, “is like the difference between going to the moon and a horse-and-buggy ride.”
Many newer CUSOs, however, focus on more mundane tasks. More operational CUSOs exist today than ever before, Messick says.
Also increasing in number are CUSOs that help credit unions with compliance responsibilities and loan generation.
Northwest Credit Union Collaboration, for example, is a relatively new CUSO four Washington state credit unions formed to reduce their compliance costs.
Another CUSO, Mortgage Liquidity Solutions, helps its five founding credit unions deal with liquidity issues that arose after corporate credit unions could no longer lend funds to CUSOs for mortgages.
“When you look at the evolution of CUSOs,” Antonini says, “it has mirrored the challenges and issues credit unions have faced over the years.”
New CUSOs are constantly emerging, and existing CUSOs are always reinventing themselves. Here’s a look at a few of them.
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