Joyce Moed | Business Samples

Struggling With Affiliation
By Joyce Moed

LITTLE ROCK, Ark.–With many credit union leagues struggling with affiliation, one league is hoping that by creating its own CUSO it will add more value to the credit unions it serves.

"When our board had its planning session last year, we talked about what we could do to get more members," said Reta Kahley, president and CEO of the Arkansas Credit Union League.

Toward the end of 2006, a league task force consisting of volunteers was put together to work on the new CUSO concept–designed as a way for the league to break into the indirect lending field.
The 10-member task force was headed by Dee Edie, president/CEO of Diamond Lakes Federal Credit Union. Now, after about six months, the task force, which was made up of mainly credit unions CEOs, is disbanding.

"That was always the plan," Edie said. "The task force has done their job. We did a wonderful job, and we hired our manager. That person will take over, and find a location."

The new CUSO, to be named Arcuso, is planned to be up and running by September, and will have two goals: to grow membership and to get more loans for members.

Kahley said they are following in the footsteps of many other state leagues that also have their own CUSO, including Texas, Ohio and Colorado.

"We certainly are not pioneers," she said. "We’re trying to learn from what others have done."
Edie agreed.

"We didn’t try to invent the wheel," she said. "We traveled to another state and viewed what they had done well and had not done well. We looked at business plans. They were very generous, and shared their information with us."

Edie said the task force also talked additional leagues that had created CUSOs.

"People were so generous," she said. "We ended up with a tremendous amount of paperwork. It was a lot of work, but well worth it. [The task force] was a wonderful team. It brought you close. "

Edie said that the new manager will also be working with auto dealers to help get them more loans.
"It is a partnership with the auto dealers in that the CUSO will work closely with the auto dealer chosen for our plan. We will be very choosey on which auto dealers we work with. The credit union will be able to deny any loan they want to. The credit union is not required to keep that loan. The [borrower] has to meet membership eligibility, and have score eligibility. Also, if the credit union has had a loss from that particular member, they don’t have to take the loan. They can certainly deny it."

Arcuso’s headquarters will be in central Arkansas, according to CUNA, and task force members are working to choose an exact location.