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By CO-OP Financial Services
Vendors are critical partners for credit unions. With a little more than 1% of America’s credit unions exceeding $1 billion in assets, few individual organizations possess the financial strength or resource depth to internalize processes, particularly payments technology. The choices are to collaborate among ourselves, retain a vendor, or in some cases both.
My position on credit union selection of vendors is well-known: Banks and bank-owned processors should be the absolute last resort for credit unions. They compete for deposits and loans, and they pay dues to fund organizations that are trying to restrict the credit union movement.
There have recently been several bank-owned processors saying they are credit union-friendly. Ask them if the bank still pays ABA dues and what public positions their executive management have taken regarding CRA and taxation of credit unions.
Another key question is what does the vendor give back to the credit union movement? Do they participate in credit union advocacy? Do they support systems organizations? Do they contribute to credit union charities?
CO-OP Financial Services is a not-for-profit cooperative, owned and operated by more than 1,000 credit union shareholders. There are many other for-profit organizations for credit unions that are not bank owned. At the end of the day it is not just about function, service and price. It does matter where the profits flow and how they are used.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
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May 7, 2007
Chuck Van Court
7/26/2012 04:03 PM
Stanley takes a strong position and I agree with it. In fact, how about kicking it up a notch and expecting vendors to do a significant amount of their banking through credit unions? By proudly calling First Tech credit union our primary financial institution, I believe that Fuze better supports and understands the movement as members.
Amen! At the end of the day it''s really about who''s looking out for you. It''s hard to understand why credit unions are paying hundreds of thousands of dollars to DealerTrack and RouteOne when the CUDL CUSO supports all four of Stan''s closing key questions. I''m not too sure the street or the captives have the movement''s interests in the forefront of their corporate objectives.
I, too, agree with Stanley''s position. On that same note, I also wonder why some credit unions do business with an insurance company (Chubb)which sponsors and funds an organization that is desperately trying to tax credit unions out of existence.
7/26/2012 04:00 PM
What about marketing companies ... Affinion, for one? They made their reputation in the BANK market and shifted emphasis years later. They work with and support thousands of banks.
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