Benefits of Partnerships Between Coops

on 11:06 AM

A new report lays out the business case for credit unions and other cooperatives to engage in mutually beneficial partnerships with each other.

About 35% of credit unions have community fields of membership (FOMs), making them readily able to accept cooperatives as members. Many credit unions without community FOMs may also be able to accept cooperatives as members through membership in select groups.

Recognizing the tremendous potential for economic benefit that credit unions could reap from developing more business relationships with other types of cooperatives, the CUNA Cooperative Alliances Committee sought to demonstrate this potential with data. The Committee partnered with the Nat'l. CU Foundation, NCBA-CLUSA and the Filene Research Institute to research and analyze the benefits.

The results of the research include partnerships such as cross-promoting m
embership; sharing physical space such as locating credit union branches or ATMs at or next to non-financial cooperatives; cross-marketing efforts such as co-branding credit cards; and shifting cooperatives’ current and future deposits and borrowing from commercial banks to credit unions.

Non-financial cooperatives in the U.S. comprise about $300 billion in assets. These cooperatives range across a broad variety of sectors, including utilities ($149 billion) and farm-related ones ($83 billion). Non-financial cooperatives would benefit from broadening their potential sources of credit and financial services. As cooperatives themselves, credit unions are a natural destination, instead of commercial banks, for non-financial cooperatives’ deposits.