CREDIT UNION COOPERATIVE STRUCTURES

1. CREDIT UNION COOPERATIVE STRUCTURES Presented by: Patricia A. Sterner President JFB & Associates, LLC

2. Four Models • Credit Union Service Organization (CUSO) • Credit Union Shared Service Center • Credit Union Shared Management • Credit Union Group/Affiliate Structure

3. Credit Union Service Organization • Structure: For-profit entity that allows credit unions to • Combine back-office operations • Provide extended financial products and services to members and nonmembers. • Products/Services: • Checkcashing • Discount brokerage services • Investments • Auto purchasing • Mortgage origination and services • Benefits: • Shared costs result in lower fees for members • Financial services not otherwise available to members • Ability to serve non-members, create path to traditional financial services

4. Credit Union Shared Service Center • Structure: Shared facility cooperatively owned by a group of credit unions. • Stand-alone facility built and owned by the group • Branches of participating credit unions that accept service center transactions • Products and Services: • Access to most financial products/services utilized by credit union members • Benefits: • Convenient, personal service at no extra cost to members • Extended geographic reach • Shared operating costs result in lower fees/higher dividends

5. Credit Union Shared Management • Structure: retain identity through shared management • Corporate organization providing fee-based management and operational services • Cooperative model (credit union-owned) • Management services provided by one credit union to another • Products and Services: • Operational management • Recordkeeping and reports • Marketing • Mortgage origination • Teller support • Benefits: • Expanded range of services • Lower cost of operations increase dividends, lowers rates for members • Professional, full time management • Increased access to services

6. Credit Union Group/Affiliate Structure • Structure: • Credit union partners with or creates affililate non-profit entity or entities • Various models based on local community, financial needs and tasks, organizational culture and mission. • Products and Services: • Seeking and administering grants and contracts • Financial counseling • Mortgage origination • Back office services • Research and development • Payroll and personnel management • Benefits: • Expanded access for potential members • Decreases regulatory risk • Decreases credit union costs resulting in better rates and services for members • Allows access to additional financial products not offered by the credit union • Provides for related services such as financial counseling

7. Resources • Filene Research Institute • Outsourcing and Sharing Credit Union Management • Check Cashing and Savings Programs for Low-Income Households • National Federation of CDCUs • Community Banking Partnership: Legal Structures that Work • The Coop Network: www.co-opnetwork.org • Credit Union Service Center (CUSC): www.cusc.net • Credit Union Service Organization (CUSO): regulatory information at www.ncua.gov