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CUSB Misconception: Credit Unions will Steal Your Members

A recent CO-OP Financial Services white paper is debunking myths about Credit Union Shared Branching. Here is an exert from the white paper that address the third misconception: Members Will Be Stolen by Other Participating Credit Unions. Hear what fellow Missouri credit union representative Tony DiGiovanni has to say about the issue.

Misconception Three: Members Will Be Stolen by Other Participating Credit Unions.

While seemingly unfounded, it remains a leading shared branching misconception that members are poached by participating credit unions. Aside from the industry philosophy, which doesn’t foster competition from within, there are network policies and procedures in place preventing this theory of “stealing” from occurring. 

“I have always felt that we are not in direct competition with other credit unions. It seems that some credit union presidents might be leery of sending their members to other credit unions, but we have not had a problem with it,” said Tony DiGiovanni, President of the Kansas City, Missouri-based CSD Credit Union. “I feel that when your members go to other credit unions to do a transaction, all they want to do is get the transaction over with and get out of there. Also, the credit union employees just want to get the transaction completed and go on.” 

With 3,700 members, $33 million in assets, seven full-time and two part-time employees, and one branch location, CSD Credit Union joined the shared branching network in February 2012. “So far our members love it. In fact, we can now offer an alternative to members who are moving to keep their accounts open,” said DiGiovanni. “Also, it gives us 26 branches in the Kansas City are without spending a ton of money. This is a very cost effective program for our credit union.” 

Bonnie A. Kramer, Senior Vice President of Operations (FSCC) for CO‑OP Shared Branching, explained that shared branching participants note that convenience is the key to delivering services and maintaining credit union membership. “Over the past 20 years, our largest credit unions continue to open branches to allow members of other credit unions to take advantage of expanding their footprint in delivering service to members,” said Kramer. “These same credit unions also send their members into branches of other credit unions. If there was a problem with credit unions stealing members, we would not be seeing this cooperation in the network.”

% Using the Credit Union User Non-User
As their PFI 74% 51%
For checking 80% 61%
For debit/check/ATM card 74% 50%
For online account access 50% 31%
For bill payment services 21% 12%
For mortgage/LOC 33% 19%

 

 

 

 

 

 

Referencing the above statistics, Kramer said, “The credit unions that use shared branching are finding that their members—going into branches of other credit unions—consider their credit union as their primary financial institution (PFI). There is not one credit union that can boast that they have over 7,200 locations available in 50 states for members to use and be convenient.” 

With 6,643 members, 11 employees, three branches and $26 million in assets, the Fort Wayne, Indiana-based Pinnacle Credit Union has realized only benefits from shared branching. “You will always have the potential to lose members to another organization, however being a part of shared branching gives your members more branches,” said CEO Lisa Williams. “The people working at the shared branching facilities aren’t the ones that will be trying to steal your members. Rather, these are individuals who have been trained to help your members as if they were their own,” she continued. “I would have lost some of our members to other institutions just because they were moving away; now I am able to keep them.”

Click here to read the entire white paper.

Click here to learn more about Shared Branching.

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