Credit Union Cooperatives
This section of The SAR Activity Review outlines findings from Suspicious Activity Reports referencing credit union cooperatives that provide shared-branching services to member credit unions.
Credit Union Cooperative Shared-Branching Model
Credit union cooperatives operate networks that provide Electronic Funds Transfer/Automated Teller Machine/Point of Sale (EFT/ATM/POS) and sharedbranching services to the cooperatives? member credit unions. Where applicable, cooperatives? EFT/ATM/POS networks enable members of participating credit unions to use other participating credit unions? ATMs without paying fees or on a reduced-fee basis. Shared branches allow members of participating credit unions to conduct transactions at either branches of the cooperative?s other participating credit unions or facilities that are managed by the cooperative itself.
There are three types of shared branches:6
- Outlet - A facility owned and staffed by a credit union where members of other credit unions, within the same cooperative network, can conduct transactions.
- Stand?Alone? A facility owned and staffed by a credit union cooperative, where members of participating credit unions can conduct transactions.
- Partnership Outlet? A facility owned by a credit union or group of credit unions and staffed by employees of the cooperative, where members of participating credit unions can conduct transactions.
Credit unions belonging to shared-branching networks fall into two categories:
- Issuer- Credit unions that allow their members to conduct account transactions, transfers, or payments at other outlets, partnership outlets, and stand-alones within the same shared?branching network.
- Acquirer (Issuer/Acquirer) ? Issuers that serve as outlets by accepting and processing transactions from members of other credit unions within the same shared?branching network.
In a given transaction, the issuing credit union pays a fee to the acquiring credit union. If the transaction occurs at a shared-branching facility that is operated by the cooperative, the issuing credit union pays a fee to the cooperative. The cooperative annually distributes its income collected from fees to its stockholders. Credit union cooperative shareholders can be credit unions, corporate/industrial credit unions, state credit union leagues, or other credit union service organizations.
6 Swedberg, Jamie. ?Share and Share Alike.? Credit Union Management. January 2006. pg. 38; and Dernovsek, Darla. ?Shared Branching Takes Root.? Credit Union Magazine. November 2005. pp. 44-47. Synopsis of SAR Filing Activity: Credit Union Cooperatives
Excerpted from SAR Activity Review Issue 12, page 15
First published on 10/01/2007