Top-Level Takeaways
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Ellen Yacovone is retiring as CLO to become TFCU’s first chief CUSO officer after reviving their own as an insurance agency.
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New policies and procedures will include looking first for potential CUSO partners in each vendor relationship.
Ellen Yacovone of Tucson Federal Credit Union ($631.9, Tucson, AZ) saw her cooperatives CUSO sit idle for much of its 20-plus years of existence and she knew it could do more. Now it’s her baby.
In April, Yacovone stepped down as chief lending officer and became instead the credit union’s first chief CUSO officer.
She’s now responsible for identifying new opportunities, managing relationships with current partners, vetting potential investments, and planning and implementing new activities and collaborations.
That means much of my time goes into research. Thanks to Google not a day goes by without me learning something new,Yacovone says.I’m also creating the foundation upon which we’ll build our CUSO over the next several years. That means policies and procedures structure mundane but necessary work.
First, The Paperwork And The Board Buy-In
Yacovone already has gotten a lot of the paperwork done. Just four months into the job, she already has produced the following documents:
- CUSO General Policy: This document includes definitions, goals, and executive leadership for Tucson FCU’s CUSO work.
- CUSO Collaboration: This document identifies steps and considerations for collaborating with others through the CUSO.
- CUSO Administration: This document outlines responsibilities connected to administering the CUSO policies.
These and other policies, templates, and more for credit unions across the country are available for downloading from the Callahan Policy Exchange.
The paperwork isn’t done.I’m currently in the process of writing out my five-year vision,Yacovone says.The biggest piece for me here is growing non-interest income, diversifying our source of income.
Yacovone also has already gotten significant buy-in from TFCU leaders for her work. The board of directors recently approved the CUSO general policy, which, among other things, requires decision-makers to include CUSOs in the mix for any new vendor relationships.
TFCU already works with several CUSOs, including Origence, LenderClose, HomeAdvantage, QCash Financial, CUBG, and PSCU.
The biggest advantage in my eyes is that CUSOs are credit union-centric,Yacovone says.We don’t have to explain our business model.They already get it.
That includes such nitty-gritty as why credit unions have only one account number for each member even if they have multiple deposit and loan relationships.It’s very challenging to explain that to a vendor who doesn’t know credit unions,Yacovone says. CUSOs usually understand that model and understand how important member service is to use.
A Case Of The Stars Aligning
TFCU does have a CUSO of its own Tucson Federal Resource Alliance that was formed about 20 years ago to run the credit union’s wealth management business. That’s now handled by CUSO Financial Services and is going strong,Yacovone says.
TFCU’s own CUSO, meanwhile, basically sat idle for 15 years, Yacovone says, until about two years ago when she led TFCU’s launch of Tucson Federal Insurance Agency under that CUSO’s ownership umbrella.
That’s my baby and my first up close and personal introduction to CUSOs,Yacovone says. The agency uses Insuritas for operational support and offers property and casualty, commercial, and life insurance, and currently has about 300 policy holders.
CU QUICK FACTS
TUCSON FCU
Data as of 06.30.21
HQ:Tucson,AZ
ASSETS:$631.9M
MEMBERS:68,391
BRANCHES:6
12-MO SHARE GROWTH:18.58%
12-MO LOAN GROWTH:3.73%
ROA:1.29%
Credit unions, of course, can only own an insurance agency through a CUSO, and the ability to offer members more options and often significant savings through that corporate structure, fueled Yacovone’s enthusiasm about the potential that CUSOs offered the credit union in multiple areas.
I shared this enthusiasm with our C-suite and we all agreed that the CUSO presented some good opportunities for the future. At the same time, retirement was looming and I wanted to ease into it,she says.
TFCU wanted me to stay, fortunately. I was ready to pass the baton from leading the lending and collections team, so they entrusted me with the CUSO. It was a case of the stars aligning.
Working Toward Enterprisewide CUSO Awareness
Yacovone says she would like to see the insurance agency triple in size and at least one successful collaboration up and running in partnership with a fintech and/or another credit union before she calls it a day.I also would like to see TFCUdemonstrate a real commitment to CUSOs with at least 10% of our investment portfolio in CUSOs, she says.
Yacovone now is working to raise awareness about CUSOs at TFCU.I’ve had the opportunity to share the CUSO message through all-staff meetings, presentations to the senior management group and the board, and through weekly communications regardingour performance to goal for the insurance agency,she says.
That awareness also extends to this expectation, expressed in this statement that leads off the CUSO Collaboration document: Because CUSOs are credit union-centric, TFCU will look to CUSOs for any new vendor relationship or strategic partnerships.
For her part, each time the credit union is looking for a vendor for a particular product or service, she’ll research whether a CUSO would fit, and if so, will connect the stakeholder and the CUSO.
Yacovone explains,I put it in the procedure because I don’t want to overlook a CUSO opportunity simply because someone doesn’t know. Through my interaction with all the managers, I’ll make sure they understand the thought process and what to do.
The Bottom Line: Working To Improve Members Lives
The biggest takeaway for me so far would be that CUSOs have a tremendous opportunity to partner with fintechs to provide the same high-end service to our members that big banks can,sometimes even better,Yacovone says.
But before she rides off into the Arizona sunset, Yacovone says, she also has another goal in mind as the credit unions first-ever chief CUSO officer.
Success in this endeavor, for me, also would be mentoring a leader who will take over this job and lead the CUSO effort to ever-greater heights,she says, adding,We all can nurture this industry with our investment of money and knowledge to help improve the lives of all our credit union members.