The credit union industry gathered this week at Disney’s Yacht Club Resort for NACUSO Reimagine 2026, and the conversations that took place will shape the future of how credit unions operate, collaborate, and compete.

I haven’t been to a NACUSO event in two years, so coming back to Disney pushed me to reflect on why CUSOs and this conference exist in the first place. Why does this conference matter? What makes CUSOs, dare I say given the location, magical?

Credit Union Service Organizations (CUSOs) are a major strategic asset for the credit union movement. They exist at the intersection of collaboration and innovation, allowing credit unions to pool resources, share risk, and bring services to members that many single institutions could not provide on their own. Whether it’s lending, technology, payments, or financial wellness, CUSOs help credit unions better serve members. And NACUSO, the National Association of Credit Union Service Organizations, exists to fuel that ecosystem through three core pillars: advocacy, collaboration, and education.

Attending this conference reminded me of just how much behind-the-scenes work is happening on behalf of the industry.

The Compelling CUSO Case

Mark Zook, president and CEO of MAPS Credit Union ($1.5B, Salem, OR),  kicked things off on Day 1 with a session that was equal parts origin story and strategic reminder. He didn’t sugarcoat it: building a CUSO is hard. But why it’s hard — because collaboration is a strategy, not just a nice idea — was a powerful message that stuck with me.

The income statement benefits of a well-run CUSO are real, but so is the balance sheet thinking that has to underpin the decision. More than anything, Zook reminded the room that CUSOs fuel the vibrancy of the credit union model. When credit unions go it alone, everyone loses a little. When they build together, the whole industry wins.

Throughout the show, we saw real-life examples of CUSOs and how they are helping credit unions.

Advocacy Isn’t Always Glamorous, But It’s Critical

The regulatory and legislative update was a good reminder that the work NACUSO does on Capitol Hill is unglamorous but essential. Topics ranged from the ongoing push to reform the 1% CUSO investment rule — a restriction that limits credit union investment in service organizations — to updates on the GENIUS Act among others.

The regulatory landscape is shifting, and credit unions need a seat at the table. NACUSO is working to make sure they have one.

AI Is the Leadership Story Of The Moment

If there was a thread running through every session, it was artificial intelligence. Keynote speaker Trent Gillespie, CEO of Stellis AI, set the framing from the start, saying AI is not an IT project, it’s a leadership one. That single sentence reoriented the conversation in a way that was both urgent and clarifying.

The numbers he cited were hard to ignore. A significant majority of knowledge workers are already using AI on the job, and not using it is rapidly becoming the minority position. A full 82% of Gen Z is reportedly already using AI for financial decisions. Gillespie provided live examples of how cheap and accessible this technology is and challenged everyone to ask the harder question: What will our future members want?

What I found most compelling was his framework around “AI sprints” — a monthly, one-step-at-a-time approach to adoption that prioritizes direction over speed. There’s a real danger in moving fast without a clear destination, and Gillespie was right to call it out. His concept of standardized playbooks, using AI to execute consistent processes at scale the way you’d want any great employee to, is something credit unions and CUSOs should be thinking about right now.

He also addressed the shadow AI problem head-on. Employees are already using these tools, whether you’ve sanctioned it or not. The better move is to bring it into the light. Make AI use safe, supported, and expected. Build it into job performance. Reward the learning.

The Next Big Idea Goes To Charm Security

One of the most energizing moments of the conference was the Next Big Idea Competition, NACUSO’s version of Shark Tank with a credit union twist. Finalists pitched live to the room, and attendees helped pick the winners. First place went to Charm Security, a cybersecurity play built for the credit union space. Second place went to Duome and third to Crebit. If you want to read about where innovation is headed in this industry, these organizations are worth knowing.

The Economy: We’re OK. Not Great, But OK.

Economist Elliot Eisenberg gave an economic update that was honest, grounded, and mercifully free of doomsday predictions. The headline takeaway? We’re OK. There’s no recession knocking at the door right now.

One interesting concept I have never thought about was the idea that the only two things that have truly revolutionized markets in modern history are railroads and, now, AI. He’s bullish on what AI means for productivity and deeply aware of how much depends on its continued development.

The Bigger Picture

These are just a few insights from Reimagine 2026. I could have written about a dozen others.

But one idea I kept coming back to as I walked the partner pavilion and sat in sessions is that the credit union model is still one of the most powerful financial structures ever built. It’s built on trust, community, and shared ownership. CUSOs extend that power. NACUSO fights to protect it.

The urgency in the hallways this week was real. AI isn’t coming — it’s here. Competition isn’t waiting — it’s knocking at the door. Your members’ expectations are growing in sophistication. We need more boldness AND more collaboration. With a side of urgency.

The people in this room get that. That’s why they’re here.

The post Reflections From NACUSO Reimagine 2026 appeared first on CreditUnions.com.

Prizeout is a fintech company that partners with credit unions to help their members maximize their money while generating additional non-interest income for the institutions. To facilitate this, a group of credit unions established Prizeout Partners, a credit union service organization (CUSO), in February 2023. This CUSO grants credit unions access to Prizeout’s CashBack+ ecosystem while its board oversees strategic direction, financial health, and regulatory compliance, ensuring long-term growth and value for its credit union partners.

The Prizeout Partners CUSO board is uniquely made up entirely of female executives from Suncoast Credit Union ($17.8B, Tampa, FL), Stanford Federal Credit Union ($4.3B, Palo Alto, CA), Michigan State University Federal Credit Union ($8.1B, East Lansing, MI), and Interra Credit Union ($1.9B, Goshen, IN). We sat down with these leaders to discuss their unique perspectives, advice for women pursuing fintech leadership, and the initiatives they are championing to expand opportunities for women in the industry.

What unique perspective do you bring as a female leader in fintech, and how does that influence the board’s decisions?

Darlene Johnson, Executive Vice President, Suncoast Credit Union: As a female leader in fintech, I bring a unique perspective that is deeply rooted in empathy, collaboration, inclusion, and a commitment to innovation. My journey in the credit union industry has taught me the importance of understanding and addressing the diverse needs of our members, particularly those from underserved communities. This perspective influences my decisions as a board member by ensuring that we prioritize initiatives that promote financial inclusion and support the wellbeing of all members.

My approach to leadership emphasizes the value of diverse viewpoints and the power of collective problem-solving. By fostering an environment where all voices are heard and respected, I help the board make more informed and balanced decisions. Additionally, my focus on social impact and community engagement ensures that our strategies align with the broader mission of improving the financial health of our members and communities. This holistic and inclusive approach not only strengthens Suncoast but also sets a positive example for the industry, demonstrating the value of diverse leadership in driving meaningful change.”

What advice would you give to women looking to break into leadership roles within fintech and financial services?

Darlene Johnson, Executive Vice President, Suncoast Credit Union: Breaking into leadership roles within fintech and financial services can be challenging, but it’s certainly achievable with the right approach. I believe women should start by immersing themselves in various aspects of the industry, gaining experience in different roles to build a comprehensive understanding of member needs. Networking with other women leaders and seeking mentorship opportunities can open doors to unique opportunities and partnerships, providing guidance and valuable insights from experienced leaders. Continuous learning and development are crucial, as seen in my championing of the Leadership Excellence Achievement Program (LEAP) at Suncoast, which has successfully graduated many team members into various leadership roles.

Embracing innovation and adaptability is essential in the rapidly evolving fintech industry. Women should be open to emerging technologies and innovative solutions, as demonstrated by my approach to partnering with fintech companies such as Prizeout. Additionally, focusing on social impact and community engagement can enhance leadership profiles and attract like-minded individuals to the team.

Building strong relationships and fostering authentic engagement with members and employees are foundational to trusted relationships. By following these strategies, women can effectively navigate the path to leadership roles within fintech and financial services, making a significant impact on the industry and paving the way for future generations.”

Amy Sink, CEO, Interra Credit Union: Get involved. Find a mentor and be present. Do the small things that get you noticed and find ways to get invited to events that help you network.

Fintech and credit unions have historically been male-dominated spaces. How has your role on this CUSO board helped challenge that status quo?

Amy Sink, CEO, Interra Credit Union: I never think about my participation as challenging the status quo. I work on things that are important to me and work with people that have high expectations.

What initiatives or strategies has this CUSO board championed to open more opportunities for women in fintech?

Amy Sink, CEO, Interra Credit Union: We are challenging the “war” on payments. Managing deposit goals and competing with P2P is the new normal and Cashback+ is a tool to help us compete.

How has being part of this CUSO board influenced your own professional growth and vision for the industry?

Amy Sink, CEO, Interra Credit Union: I really enjoy starting something new. In the case of Prizeout, it’s having the opportunity to create a new product and share it within the industry. As a person who has been in the industry for a while, it’s easy for me to share this kind of idea with my friends. Not every CUSO idea works for every credit union but the collaboration in our industry allows us to agree and disagree.”

April Clobes, President & CEO, Michigan State University Federal Credit Union: Serving on the Prizeout CUSO board has provided me with a deeper understanding of how a fintech company evolves — maturing, scaling, and continuously innovating even after an initial product finds success. Our ongoing work and board service has broadened my perspective, allowing me to apply these insights to other boards I serve on, ultimately helping organizations expand and enhance their member experience.

When fintechs succeed, they elevate the entire industry, strengthening its ability to compete and drive innovation. In the early stages, fintechs gain invaluable insights from those who have successfully navigated growth challenges and scaled their businesses. My experience on the board has not only enhanced my effectiveness in my role but has also made me a more knowledgeable and strategic advisor.

What do you see as the biggest challenge facing women in fintech today, and how can organizations like CUSOs help address it?

Amy Sink, CEO, Interra Credit Union: Women have a propensity to take themselves out of the “game” for lots of reasons, but it can hold them back and have them looked over.

What’s one key change you hope to see in fintech leadership over the next five years?

April Clobes, President & CEO, Michigan State University Federal Credit Union: Many fintech leaders I work with are deeply passionate about their products and services, always seeking ways to enhance the member experience. I encourage them to continue fostering collaboration by formalizing and expanding communication channels to support and learn from one another.

The cooperative spirit within the credit union space is what sets this industry apart and has been a driving force behind its growth. While many fintech leaders have begun forging partnerships and identifying synergies, there remains opportunity to collaborate for integrations. By working together and supporting each other, fintechs can strengthen their ecosystem, ultimately driving greater member engagement and delivering even more value.

Strong female voices have the potential to make change. These women in particular are championing mentorship, innovation, and collaboration among one another and their teams to shape the future of their organizations. As the industry evolves, so will their impact, ensuring that more women have a seat and say in the future of financial services.

Prizeout is an advertising and financial technology company that helps put money back into people’s pockets. Through Prizeout’s technology, brand-funded offers are available to all partners, including financial institutions, gaming companies, gig economy startups, and more, giving them access to instant cashback from national and local brands when they shop with digital gift cards. The company was founded in 2019 and is headquartered in New York City. For more information about Prizeout, please visit www.prizeout.com.

The post How 1 CUSO’s Board Is Empowering Women In Fintech appeared first on CreditUnions.com.

Aside from the traditional competition from large money center and community banks, credit unions now must contend with the rise of digital banking and challenger fintech companies. These new market entrants offer a range of innovative products and services, often with higher interest rates on savings accounts and competitive loan terms. The heightened competition from these “shiny new toys” has lured away members who are seeking higher returns, greater convenience, and a better digital experience.

Also contributing to deposit erosion is the changing demographics of credit union membership. As younger generations — who are more tech-savvy and open to digital banking solutions — join the workforce, they might be less inclined to choose traditional brick-and-mortar institutions.

Credit unions must adopt a proactive approach that focuses on innovation, member engagement, and member experience. By embracing digital technologies and offering innovative products and services, credit unions can attract and retain younger members while better serving their current members. Investing in personalized member experiences and building strong relationships with members can foster loyalty and encourage deeper relationships. This combined with the trust, safety, and service already provided by credit unions will give members reasons to stay and for new membership to grow.

CUSO Collaboration Gets Results

This begs the age-old question: Build in-house or find a trusted service provider to partner with? Building takes time and resources most credit unions just don’t have. The vast majority of credit unions’ tech and product budgets cannot compete with the large banks in their markets. The power of credit union collaboration through CUSOs can help fuel innovation at scale, allowing credit unions to compete and thrive as they build and implement meaningful engagement tools. How can credit unions make deposit accounts more relevant and offer new and existing members unique and valuable tools?

Enter CashBack+, a digital engagement, rewards and loyalty platform powered by Prizeout — the direct result of CUSO collaboration to solve these issues.

Michigan State University Federal Credit Union ($8.2B, East Lansing, MI) leverages CashBack+ to reward and engage with their members. Earlier this year, MSUFCU deployed Offers, the first of three CashBack+ products. CashBack+ Offers is a digital marketplace where members can take advantage of personalized merchant-funded cashback shopping offers when paying with their MSUFCU accounts. This is a secure marketplace with over 500 offers which lives behind banking walls in both online and mobile banking, delivering instant cashback and puts MSUFCU top of wallet on every transaction.

Cashback and shopping rewards have generally only been available to credit card users…until now. CashBack+ Offers enables debit card and checking account users to earn instant cashback on every purchase they make using their deposit accounts, and there are no limits on how much they can earn throughout the year. MSUFCU members are taking advantage of this benefit.

Members are earning more cashback:

• The top 25% of users are on pace to earn $190.00 per year.
• The average user is on pace to earn $91.00 per year.
• CashBack+ rewards earned average is in the 8% to 10% range, compared to the national average cashback rewards earned percentage of 1% to 2%.

While earning cashback is a win and satisfying for members, MSUFCU is also benefiting from increased digital engagement, capture of member spend, and increased product use:

• Driving Digital Engagement: CashBack+ users are 3.5x more likely to have online banking sessions than those who don’t convert.
• Consistent Engagement: CashBack+ users check for offers 1.7x a week.
• Product use is consistently growing: Purchase volume is growing 15% each month.
• Member Satisfaction: Active users are spending 17% of their eligible spend with CashBack+ each month.
• Member Retention: Two-thirds of users will buy again in a quarter.
• A New Source Of Non-Interest Income: MSUFCU is paid a revenue share that outpaces debit interchange on every member transaction.

“For years, we have been looking for a simple and secure way to reward our members for their loyalty without adding complicated or cumbersome steps to receive their benefit. Many of the current options can be difficult to use, leading the member to lose interest,” says Ami Iceman, chief experience officer. “CashBack+ Offers from Prizeout has quickly proven to be a great tool that our members love using, especially when we know every dollar matters.”

In the first quarter, Prizeout will be releasing CashBack+ Pay (a pay-by-credit-union cashback shopping tool) and CashBack+ Rewards (a spend-based and actions-based rewards platform) to give credit unions even more ways to reward and engage with their members.

“We are very excited to add Pay and Rewards to our member engagement strategy,” Iceman adds. “The full suite of CashBack+ products and services is a true differentiator as MSUFCU works to retain and grow our membership. Benefits such as these reinforce the value we can provide our members as their primary financial institution.”

The Prizeout Partners CUSO was formed in February of 2023 by 20 founding members to build digital products for credit unions, by credit unions. Prizeout now powers the engagement, loyalty, and rewards strategy for more than 30 credit unions. For more information about deepening member relationships with CashBack+, visit prizeout.com.

The post Drive Deeper Relationships Through Digital Engagement And Deposit Account Use appeared first on CreditUnions.com.

Our mission is to grow the credit union community. There are ample opportunities to keep business within the credit union space, especially when considering the alternatives like “the big dogs” in the industry. Here are five compelling reasons to leverage a mortgage CUSO now.

1. Enhance Your Membership Base

One of our primary goals is to provide credit unions with more opportunities to build their membership base. In the past 10 months alone, Mortgage Center has facilitated more than $80 million in new member production for our partners. Our emphasis on increasing mortgage volume for credit unions has resulted in not only new loans but also numerous opportunities for membership growth.

Through collaboration with a CUSO such as Mortgage Center, credit unions can draw in new members who specifically join for mortgage services, thereby broadening their influence and impact.

2. Navigate The Unpredictable Mortgage Market

The mortgage market is notoriously unpredictable, and this year is no exception. Data indicates rates are not decreasing as much as anticipated, adding another layer of complexity.

By partnering with a mortgage CUSO, credit unions can offload the stress and uncertainty of navigating this volatile market. Mortgages are what we know inside and out. We take these stressors off you and your team, allowing you to focus on serving your members better.

3. Keep Business Within Our Community

There are numerous mortgage companies available, but it’s crucial to keep business where it belongs — inside the credit union community.

By leveraging the services of a CUSO, you can ensure your mortgage program remains aligned with the values and mission of your credit union. This not only supports the broader credit union community but also reinforces the cooperative spirit that sets credit unions apart from other financial institutions.

4. Address The Aging Membership Challenge

The average age of members is rising, indicating the membership base is getting older. This demographic trend poses a significant challenge for credit unions striving to attract younger members.

CUSOs are actively building awareness around the credit union industry for those seeking mortgages, particularly younger individuals. Through strategic partnerships and targeted outreach, we help credit unions address this challenge and bring in a new generation of members.

5.Strengthen Your Credit Union’s Core Values

Mortgage Center takes our commitment to growing the credit union community very seriously. Our efforts are not just about numbers — they’re about fostering a thriving credit union ecosystem.

By working with a CUSO, credit unions can reinforce their dedication to community growth, ensuring their mission resonates with both current and potential members.

Now Is The Time To Redefine Your Mortgage Program

The landscape of the mortgage market is rapidly evolving, and credit unions must adapt to stay competitive. Now is the perfect time to redefine your mortgage program with the support of a mortgage CUSO. Let’s keep business within the credit union world and keep it thriving, together. By doing so, we can collectively ensure the credit union movement remains strong, vibrant, and relevant for generations to come.

Leveraging a mortgage CUSO offers numerous benefits — from enhancing your membership base and navigating market uncertainties to keeping business within the credit union community and addressing demographic challenges. It’s a strategic move that aligns with the core values of credit unions, fostering growth and sustainability in an ever-changing financial landscape.

The post 5 Reasons To Use A Mortgage CUSO Now appeared first on CreditUnions.com.

“Collaborations with fintech companies — once viewed as advantageous — are now essential for survival and growth in the modern financial landscape.”  — Danny Phillips, SVP, CU*SOUTH

Credit unions are facing a pivotal moment in their evolution, addressing the critical need for technological innovation through the integration of advanced technologies. As a result, collaborations with fintech companies — once viewed as advantageous — are now essential for survival and growth in the modern financial landscape.

Technological Advancements: A Key To Competitiveness

As reported in a January 2023 article published by American Banker, there is a significant gap in membership growth between larger credit unions, which are equipped with the latest technological advancements, and their smaller counterparts.

For example, credit unions boasting assets of more than $1 billion have experienced an 8.1% growth in membership. Conversely, smaller credit unions with assets ranging from $100 million to $500 million report a 4.3% decrease in membership​​. This trend highlights the critical role technology plays in attracting and retaining members, with larger institutions leveraging their resources to offer frictionless member experiences and innovative services.

The Risk Of Technological Stagnation

It’s crucial for credit unions to stay technologically updated, especially when considering the competitive pressures arising from both within and outside the traditional banking sector. Credit unions are increasingly losing ground in small business lending, a sector where digital lending tools offered by fintechs and other financial innovators are setting new standards for speed and convenience​​.

This shift underscores the urgency for credit unions to embrace digital transformations to not only defend their market share but also expand their reach and enhance their service offerings.

Simplifying Processes To Enhance Member Experience

The need for digital optimization extends beyond competitive positioning. It directly impacts the ability to attract new members and business.

According to an October 2022 article published by The Financial Brand, the abandonment rate for digital applications for deposit products was less than 10% for only 14% of banks and credit unions in the United States. This emphasizes the necessity for streamlined, user-friendly processes​​ that would help credit unions significantly reduce abandonment rates and improve operational efficiency.

Embracing The Digital Shift

In order to thrive, credit unions must leverage their unique strengths — such as their community focus and member-centric values — while aggressively pursuing digital innovation and fintech partnerships. This approach not only addresses the immediate challenges of member retention and competitive pressures but also positions credit unions as forward-thinking, responsive institutions ready to meet the evolving needs of their members.

Additionally, this methodology empowers credit unions to enhance their value proposition, attract a broader member base, and secure a competitive edge in the increasingly digital financial marketplace.

For credit unions seeking to navigate this digital transformation, partnering with CU*SOUTH offers a pathway to leveraging state-of-the-art technology and fintech solutions. Visit cusouth.com to book a discovery call and explore how to effectively modernize operations, enhance member experiences, and drive growth in a technology-driven landscape.

Danny Phillips is senior vice president of client experience at CU*SOUTH. Reach him at danny.phillips@cusouth.com.

CU*SOUTH, a 100% credit union-owned CUSO, champions credit union growth and embraces innovation to deliver top-tier, future-ready core processing and mobile banking solutions that redefine member experiences.

The post How Fintech Partnerships And Digital Transformation Help Credit Unions Thrive appeared first on CreditUnions.com.

Top-Level Takeaways

• In the first quarter of 2021, a dozen BCU team members participated in a strategy course focused on sustainability and leading with purpose.
• The course led the credit union to reduce NSF fees, form a financial wellbeing CUSO, and create a fund to help employees experiencing hardship.

The intersection between physical, financial, and mental health has never been greater. Many credit unions offer financial wellness programs to members in an effort to help them feel less stressed about their finances. BCU ($5.4B, Vernon Hills, IL) has taken that charge one step farther.

The Illinois cooperative has established a new CUSO, dubbed Life. Money. You, that offers financial wellbeing programs to everyone — even those who don’t meet the credit union’s membership requirements.

“We wanted to have a greater impact, especially in underserved communities,” says Jill Sammons, senior vice president of marketing and strategic communications for BCU.

Here Today … Here Tomorrow … Here Through It All

That desire is also the driving force behind the credit union’s “Here Today For Your Tomorrow” tagline and overall brand narrative.

To ensure all 800 BCU employees understand the cooperative’s purpose, the credit union surveyed them. Responses showed employees understood well the meaning behind the credit union’s brand; however, they sometimes struggled to understand how the work they did day in and day out contributed to BCU’s purpose and mission.

“They needed help connecting the dots,” Sammons says.

As BCU was talking about purpose and making an impact on the communities it serves, it also started thinking about sustainability. In addition to serving six local communities in Illinois and Wisconsin, BCU serves a number of employee groups and does a lot of business in Puerto Rico.

Plagued by frequent hurricanes, the cooperative’s Puerto Rico headquarters has triple redundancy with solar power, generators, and water preservation techniques. That came in handy this past September when Hurricane Fiona made landfall as a Category 4 hurricane. As one of the few places with power in the aftermath, employees used the BCU facility to charge cell phones and even do laundry as they served members.

“During Hurricane Fiona, BCU was like a beacon on the island,” Sammons says.

The Power Of Sustainability

BCU’s newfound focus on sustainability isn’t just because it wants to help members, although that is an important objective, of course. The credit union’s sustainability efforts make business sense, too. That’s a key teaching featured in Sustainable Business Strategy, a virtual learning experience Callahan & Associates offers in collaboration with Harvard Business School.

“There was this huge ‘aha’ moment when I saw the slide showing how you can do good in the world for people and do well financially for your organization,” Sammons says.

When BCU decided to participate in the program, it wasn’t satisfied with sending one or two individuals. So, it sent a dozen.

The cooperative identified high-performing individuals to create a private cohort of cross-functional, mid-level leaders from finance, marketing, consumer lending, deposit products, and more. Employees in different time zones participated together, and team members who rarely interacted — even a pair as unlikely as the director of creative communications and the director of finance — established great relationships.

At the same time, four executive leaders participated in a mixed cohort with other credit unions to glean insights from others.

The two groups took the course in parallel, kicking off the experience in the first quarter of 2021. When the dozen participants regrouped for the final debrief, they were able to identify takeaways to immediately implement.

One immediate action? The credit union analyzed and significantly reduced its non-sufficient funds and overdraft protection fees.

“Those decisions were directly correlated to the learnings from the course,” Sammons says.

Another action? The credit union expanded Life.Money.You.

“We were in the early stages of forming an LLC and needed to gain consensus internally about separating our financial wellbeing work,” Sammons says.

BCU had offered financial wellbeing tools and resources to members under the Life.Money.You. brand for a decade. Convincing the board and leadership team that offering the program to non-members would benefit the community while supporting the financial stability and long-term performance of the organization was critical.

An Investment For Employees, Business, And Community

Doing well while doing good — that’s the sustainable strategy way. Anecdotally, for BCU, there are more voices in the room now pushing the credit union to have these kinds of conversations and identify these kinds of opportunities.

“It’s not a coincidence that more of us are now asking how we grow in a scalable way without losing the internal culture and high-touch business practices we’re known for,” Sammons says.

With plans to send more employees through Sustainable Business Strategy in the future, Sammons sees courses like this as a solid investment in the future.

“How much do we really implement from a conference?” the SVP asks.

Aligning teams around sustainable business strategy also can help employees find their purpose and increase engagement. That’s a major advantage when recruiting and retaining talent is challenging.

At BCU, the creation of a “Generous Fund” allows employees to make small contributions to help their colleagues out of hardships. Employees can make $1 or $2 donations via payroll deduction or one-time gifts via digital banking.

“We talk about being purpose-driven, and this fund gives employees a tangible sense of purpose,” Sammons says. “Their small donation can have a huge impact on someone else. Just like we want to help people find financial peace, we want to help our employees thrive.”

The post Why Did BCU Reduce Fees And Form A Financial Wellbeing CUSO? appeared first on CreditUnions.com.

The CTS board is chaired by Tim Chapman, president and CEO of Members Community Credit Union ($85M, Muscatine, IA). Also involved are Abbey Community Credit Union ($132.1M, Vandalia, OH), CSE FCU($372.6M, Canton, OH), and Tendto Credit Union ($141.6M, Erie, PA). Additional credit unions have committed to invest by the end of September 2022.

CU-Interface describes itself as a boutique company that believes in quality over quantity in this essential business relationship and that credit unions should thrive by taking full advantage of their core’s technology, not merely survive despite their core’s limitations.

Here’s more about mpowered and the new CUSO.

What in a nutshell is the vision for CTS and the mpowered platform?

Cooperative Technology Solutions: The new CUSO will collaborate and enhance the core for current and future users. The purchase of CU-Interface will facilitate additional hiring and pave the way for additional mpowered users to shape the company’s roadmap through advisory groups.

Will you be keeping the mpowered name for the CU-Interface platform?

CTS:The mpowered namespeaks to our mission of empowering users with member data at your fingertips, so we will be keeping this trusted brand.

What challenges will the new Cooperative Technology Solutions Group help its credit union clients overcome?

CTS:In this era of consolidation, credit unions can find themselves at the mercy of their oftentimes much larger trading partners. First and foremost, CTS members control their destiny by owning their core data processor. Regardless of size or investment, credit unions using mpowered will be steering the product roadmap through user advisory groups that will balance the needs of larger and smaller credit unions.

What opportunities will CTS help its credit union clients leverage?

CTS:The cooperative bargaining power of multiple credit unions helps overcome barriers to entry like minimum transaction thresholds or expedited certifications when onboarding with approved vendors. For example, market sectors like bill pay and remote deposit are dominated by a small number of actual providers abstracted by numerous resellers. CU-Interface connects directly to the largest providers, eliminating costly resellers for participating credit unions.

Ultimately,mpowered credit unions will be able to leverage economies of scale unavailable to them on their own, including through fintech partnerships and other vendor opportunities. They also will be able to develop and provide shared services in the back office, call center, and data analytics operations.

What differentiates your core processing platform from the competition?

CTS:CU-Interface has worked to create an affordable, high-caliber product to empower credit unions to do what they do best: serve their members. The mpowered is member-based, rather than account-based, providing a user-friendly and highly intuitive interface that effectively accesses and records members’ account information.

Because it isn’t cobbled together from various third-party components, member service representatives can seamlessly assist members with basic account questions, loan origination, credit card processing, online access, or collections information all within the same interface.No need to sift through each account a member has with their cooperative.

Please describe some of the features integrated into your core platform and how they’re developed.

CTS:mpowered’s seamless functionality includes teller line check scanning, mobile apps, home banking, bill pay, automated daily share draft, ACH and debit card processing, automated loan approval, member onboarding, e-signature, remote deposit capture, document/form generation, collection processing, investment tracking, real-time general ledger, document management system with real-time transaction imaging, and much more.

Our highly integrated system is based on the newest Microsoft platforms to provide open interoperability with modern platforms, including Excel, Word, and PDF documents. All the development efforts for the mpowered core are done in conjunction with credit union management and personnel, from feature request through final certification. We listen to the needs of the users and let their core processing wish list become reality.

Please describe the integration capabilities of your platform with the wide range of ancillary services necessary for credit unions to compete in today’s market.

CTS:CU-Interface built mpowered with a vendor agnostic philosophy. We integrate directly with multiple national and regional vendors for essential services like ATM, ACH, Check 21, Member Rewards programs, Bill Pay, Indirect Lending, Gap insurance and more. In many areas, we offer an included solution, but also enable credit unions to exchange data with their existing vendors.

Please describe the support your CUSO will provide your client credit unions, both in person and virtually.

CTS:As owners and users of the platform CTS has a vested interest in putting forth the best product possible to meet our credit unions’ needs. CTS is already exploring options for adding shared services such as back office and enhanced accounting support since the member credit unions all use the samempoweredinterface for their operations.CU-Interface will continue supporting client credit unions day to day from the company’s newly expanded office in Richfield, OH.

Please describe the ownership opportunities that will be available for other credit unions to get involved with the new CUSO.

CTS:CTS is building toward 100% ownership in five years. To align members philosophically, CTS participation is open only to current CU-Interface credit union clients. In the cooperative spirit, CTS has also capped member investment so no one credit union can buy majority control of the board.

How can a credit union contact you to learn more about the new CUSO both as a prospective client and a prospective owner?

CTS:Credit unions interested in learning more about mpowered can start their core search at www.cuinterface.comor call Christian Dabney at 330.741.9495. Prospective investors can email info@ctscuso.comor find board slides at www.ctscuso.com.

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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.

• 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.

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The Study

PSCU randomly selected 20 credit unions from across the United States averaging $3.1 billion in assets. Ten of the credit unions were utilizing outsourced collections support for early-stage calls, while 10 were performing this function in house. PSCU set out to answer the following questions: Which credit unions fared best during the past 18 months, and what will the future hold for both those that utilize outsourced collections and those that do not?

First, PSCU extracted data from the NCUA 5300 Call Report, examining early- to mid-stage performance for the four years leading up to December 2019, which was the last quarter not affected by coronavirus. The data included 195 of the country’s largest credit unions, excluding Navy Federal Credit Union as its large size would skewed the results. Credit unions saw a 30% drop, on average, in accounts from 30-59 days delinquent to 60-179 days delinquent, which was established as the benchmark for pre-pandemic performance.

As coronavirus emerged in early 2020, spending sharply dropped as consumers stayed at home and unemployment soared. This reduced spending enabled consumers to pay off debt. From December 2019 to June 2020, data for the 20 credit unions in PSCU’s study showed a 50% drop of 30-59 days delinquent accounts. As 2020 entered the third and fourth quarters, spending returned and so did early- stage delinquency. However, as coronavirus cases soared in late 2020 and into early 2021, an additional stimulus package and other factors including extended unemployment benefits, mortgage forbearance, and renter eviction moratoriums contributed to another steep decline in early-stage delinquency in early 2021.

PSCU then divided this data by the 10 credit unions utilizing outsourced collections compared to those that were utilizing in-house resources. The data showed a dramatic difference: The credit unions not using outsourced collections were unable to consistently match the 30% drop in accounts from 30-59 days delinquent and 60-179 days delinquent, as shown in the below graph. In fact, since March 2016, performance-to-expectation has been eroding:

Credit unions that were utilizing outsourced collections saw much different performance, consistently meeting or exceeding the 30% benchmark, as shown in the following graph:

As fewer accounts were going into delinquency during this historic period, credit unions outsourcing collections reduced the work being sent to their vendor partners which, in turn, reduced expenses. Those that were performing the work in- house suddenly found themselves overstaffed while their expenses remained constant, as many credit unions tried to hold onto employees versus letting them go prematurely due to the uncertainty of the economy.

On the other hand, if delinquency were to suddenly spike to historic levels, credit unions outsourcing collections would immediately increase workflow to their partners, incurring only the added expense to work those additional accounts. Credit unions handling collections in-house would be faced with a need to hire and train staff quickly before the accounts flow through to charge-off. This rush to hire and train could also lead to increased compliance risk should inexperienced staff not handle member inquiries and needs as required and expected.

Looking Ahead

Bearing all of this data in mind, what does the future hold for delinquency? No one could have predicted, planned, and staffed for the delinquency pattern that emerged, and no one expects delinquency to remain as low as it has been recently. As vaccinations and the reduced number of coronavirus cases continue to help reopen the economy, some key dates all of which are still subject to change lie ahead that may add to delinquency in the near future. These include:

• National renter eviction moratorium ends on June 30
• Mortgage forbearance ends for most loans on June 30
• FHA mortgage foreclosure moratorium ends on June 30
• Enhanced unemployment insurance benefits expire on Sept. 6 (24 states have announced earlier expiration dates in June and July)
• Pandemic unemployment insurance benefits expire on Sept. 6
• Student loan deferrals end on Sept. 30

The pandemic brought awareness to the value of outsourcing collections to reduce costs versus keeping it all in-house. Credit unions would be remiss to not consider all options when determining their best plan of action for delinquency in the future.

Wendy Elieff oversees the success of the Client Service and Marketing teams for CU Recovery and The Loan Service Center, a PSCU subsidiary. Wendy has worked for CU Recovery for the past 22 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness, as well as building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.

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