The Evolution of Business Services CUSOs

Credit Union Magazine
October 8, 2004

Bob Dorsa, president of NACUSO, Newport Beach, California, recently shared his thoughts about business-services credit union service organizations (CUSOs).

How do you see business services CUSOs evolving?

I hope they evolve in small numbers. The last thing we need is 200 business-lending CUSOs. This is a highly complex business model that requires great expertise in the whole area of business lending and other services. A lot of people think offering business services is seeing which members' businesses have outgrown their garage and need to build a building, and that's the end of the story. Business services involve deposits, commercial lines of insurance, and relationships with small businesses. It has nuances that people may not be fully aware of.

Credit unions doing this collectively have the best chance of being successful. This may be a real opportunity for the credit union community to restructure itself for the future. There are [thousands] of credit unions with less than $50 million in assets that never will get into these services on their own. Unless they affiliate with a CUSO, they don't have much chance of engaging in these activities.

How might business services CUSOs shape the CU movement?

In a great way. Single-sponsor credit unions largely are a thing of the past. Where will new members come from? That's my top question. If dealing with small businesses is a conduit to reach consumers, this may be a great thing.

Reprinted with permission from creditunionmagazine.com