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April 21, 2014
Commentary

Cooperation proves a winning strategy for Maine credit unions

In April 2004, six Maine credit unions came together to create the shared branch network in Maine, with 11 locations. In the 10 years since, the network has grown to include nearly 90% of the state's 61 credit unions, with 160 locations in Maine and more than 5,000 nationwide. Today, the shared branch network in Maine has nearly three times as many branch locations as any single bank in Maine and is the fourth-largest network nationwide.

Promoting the benefits of shared branching for members is a top priority for credit unions. Benefits include the ability to make deposits, withdrawals, transfers, account inquiries and other transactions at locations convenient to members; and access to accounts even when members move, are on vacation or are out of town in an emergency. However, the shared branch network offers many benefits to the credit unions themselves — for example, as member-owned cooperatives, they can make the best use of resources and leverage the economies of scale that being part of a cooperative provides.

For credit unions, shared branching is an opportunity to offer significantly more convenience to busy and mobile members through widespread branch access and greater person-to-person contact. It also enables credit unions to expand their opportunities to deepen relationships by providing additional products that add new channels for profitability while reinforcing their value as a primary financial institution.

By sharing facilities, credit unions can offer greater convenience to members without the significant investment in branch development that would be required otherwise. While branches are still an important component of a credit union's strategic planning, through the cooperation of shared branching, credit unions have the financial resources to introduce new convenience channels, such as online and mobile, as well as other innovative and beneficial products and services

In addition to the economic advantages that the shared branch network brings to credit unions, it also bolsters disaster recovery. Earlier this year, a Maine credit union had a fire at its main office. This credit union was not part of the shared branch network; however, within a day, the credit union became part of the network and its members had access in person to their credit union and the ability to conduct transactions at other credit unions in the region. Shared branching played an integral role in getting the credit union connected to its members and vice-versa within hours rather than days or weeks.

Since credit unions were first formed in Maine, back in 1921, cooperation has been a key component in the growth and success of credit unions in our state. From sharing ideas and knowledge to coming together on issues, such as ending hunger and financial education, and pooling resources to introduce innovative products and services that otherwise may be cost prohibitive for one institution, cooperation is alive and well among Maine's credit unions. Since 2008, assets, loans and deposits have grown significantly at Maine credit unions as consumers found value in having local and trusted financial services.

Perhaps, most indicative of this trend, Maine credit unions have gained more than 40,000 new members in the past five years, and total credit union membership in Maine is at an all-time high at more than 637,000 members. Today, Maine is the fifth strongest credit union state in the nation, with nearly 50% of the population belonging to a credit union.

Shared branching is an outstanding example of what can be accomplished when there is cooperation and collaboration for the greater good of all, rather than one. As a result, members of most Maine credit unions have access to the largest branch network in Maine, as well as one of the largest nationwide. This was all accomplished in a decade, thanks to cooperation.

John Murphy is president of the Maine Credit Union League. For more information about shared branch locations in Maine, visit www.mainecreditunions.org.

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