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Iowa CUs study co-ops in Germany Poland
SOPOT, Poland (1/24/11)--With the help of World Council of Credit Unions (WOCCU), two Iowa credit union league officials traveled earlier this month to Sopot, Poland, and several cities in Germany to discuss collaborative efforts and visit cooperative financial institutions. The purpose of the trip by league President/CEO Patrick S. Jury and league Vice Chair Tim Chapman, president/CEO of Members Community CU in Muscatine, was to examine ways in which credit unions in other countries effectively manage resources through collaboration in hopes of finding ways for Iowa’s credit unions to save money while better serving their members.
Iowa Credit Union League Vice Chair Tim Chapman (from left), president/CEO of Members Community CU, Muscatine, and Iowa League President/CEO Patrick S. Jury joined Brian Branch, World Council of Credit Union’s executive vice president and chief operating officer, in visiting cooperative financial systems in Poland and Germany in search of greater collaborative operational techniques. (Photo provided by World Council of Credit Unions)
Polish credit unions take a collaborative and integrated approach to service. The institutions operate under a uniform brand and use system-wide operations and management capabilities to serve Poland’s 2.2 million credit union members more efficiently. Several Iowa credit union officials would like to see similar economies of scale at work in their state, said WOCCU. “Credit union income is under significant pressure due to corporate stabilization needs and anticipated reductions in debit interchange income,” Jury said. “We want to help Iowa’s credit unions achieve greater economies of scale through collaborative efforts and make sure these initiatives add value for the credit union member.” Poland’s SKOK credit union system works under one unified brand for all of the country’s 62 credit unions and their 1,837 branches. All credit unions belong to the National Association of Cooperative Savings & Credit Unions (NACSCU), headquartered in Sopot and WOCCU’s member in Poland. NACSCU provides the brand identity and system-wide marketing and investment services. It also provides a framework for products, but credit unions set their own pricing, an arrangement that enables them to operate more competitively, said Brian Branch, WOCCU executive vice president and chief operating officer. “Outsourcing services through these companies reduces costs for all credit unions and allows small credit unions to implement programs they otherwise could not afford to,” said Branch, who accompanied Jury and Chapman on the tour. “These include uniform credit analyses, standardized product development with pricing appropriate credit unions, common branch-office design and standardized marketing initiatives.” The SKOK system owns several companies that provide economies of scale in serving credit unions, Branch said. The companies provide expertise in supervision, insurance, investment funds management, publishing, accounting software, training, financial education and arbitration available to all NACSCU members. The SKOK network electronic payments system (HSO) supports 848 ATMs, includes two mobile ATMs and has 1,100 POS devices. HSO provides credit union software, telecommunications card services and electronic settlement and payment services, allowing credit unions of all sizes to offer call center services, internet banking and credit scoring system. It also provides association centralized collections, offers remittances and is a member of Visa, Branch added. In 2010, a pilot group of nine credit unions representing 50% of the system’s assets integrated under the Stefczyk credit union banner to share management services through a limited partnership joint stock company, TZ SKOK. The participating credit unions united around a common commitment to compete aggressively with Poland's banks. The group is led by Stefczyk credit union, which has 759,000 members served by 369 branches and 2,200 employees. Stefczyk's US$1.9 billion dollars in assets constitute 29% of the assets of the entire the Polish credit union system. “The Stefczyk group is an interesting idea that I would like to explore more fully with Iowa’s credit unions,” Jury said. “We have 135 credit unions in Iowa, all but one of which are state-chartered. We’re a close-knit credit union community with long-standing leadership, and we believe there are great opportunities to work together.” The group also met with leadership from the National Association of German Cooperative Banks, the International Raiffeisen Union and other German financial cooperatives. The maturity of the German system yielded additional ideas to those learned in Poland, which launched its modern credit union movement in 1992. Visits to both countries’ systems opened participants’ eyes to possibilities, according to Branch. “There is a great deal of interest among U.S. credit unions to control costs and improve efficiencies,” said Branch. “Many economies can be achieved through collaborative effort, and cooperative systems in other countries offer models of how to do that.”
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