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Credit Unions Helping Credit Unions: Why Many Are Joining the ModernFi CUSO Network
November 7, 2024
Across the country, credit unions are pillars of financial support and empowerment in their local communities. We’re proud to be part of a growing movement as these institutions come together through the ModernFi CUSO network to help each other grow deposits and member relationships. Credit unions in the ModernFi CUSO network now collectively represent over $85B in total share shares and deposits.
Credit unions nationwide recognize the immense potential of the ModernFi CUSO network to drive growth, deepen member relationships, and further their strategic priorities. While every institution has its own unique goals, we see several common trends and use cases across our partners:
Business Banking: Accelerating Commercial Member Services
Credit unions are increasingly focused on business banking and commercial member services in order to grow holistically and better serve their communities. The growth trend is striking, with commercial deposits as a percentage of total credit union deposits doubling over the past decade.1
Royal Credit Union, a leader in business banking in Wisconsin, is a testament to the power of innovative business banking solutions to drive member growth. Speaking about how ModernFi CUSO has fit into their approach, Mickey Noone, VP of Business Lending at Royal Credit Union, shared his experience: “Everybody’s running to find a resource to get some level of NCUA coverage on deposits so finding ModernFi was literally a gift. We’re very fortunate to stumble across [ModernFi], and you’ve been very helpful for us as we look to extend coverage to our depositors here at Royal.”
Recognizing that coverage and peace-of-mind are just one part of the business banking puzzle, our partnership with Tru Treasury has helped shared partners deploy the full suite of commercial services. John Ballantyne, CEO of Tru Treasury, emphasized the significance of this strategic alliance: "For years, we have been searching for a deposit network to add to our offerings and were thrilled to find ModernFi. Our broad range of treasury solutions combined with ModernFi's industry-leading deposit network significantly enhances credit unions' positioning to win in the competitive business banking market."
Public Funds: Strengthening Community Bonds
Public funds represent a perfect opportunity for credit unions to grow, drive lending in their local communities, and serve their very own communities. However, security is crucial for winning public fund RFPs, as regulations require funds be insured or collateralized. ModernFi CUSO helps credit unions compete by offering accounts with millions in extended NCUA insurance,* ensuring federal coverage, eliminating collateral needs, and freeing liquidity for lending.
Credit Union 1, a pioneer in leveraging ModernFi for public funds in Florida, shared their approach: “ModernFi has shown us a path forward for CU1 to aggressively pursue public deposits. Their expertise has been invaluable in educating our team on how we can use their innovative network to grow our public and private deposits,” said Sherod Halliburton, Market President.
Our team has put together a state-by-state analysis on public depository eligibility for any credit union looking to target public funds for deposit growth.
Individuals: Growing our Core Members
At the heart of every credit union is a commitment to individual members' financial wellbeing. As members accumulate wealth throughout their relationship with credit unions, extended insurance accounts are a powerful tool to retain and own the entire relationship with those that hold larger balances. Indeed, extended insurance accounts have shown over 100% retention on average since 2018.2
Lookout Credit Union in Idaho shared the impact these products will have on their members: “We’re excited to offer millions in insured deposits. This strengthens our relationships with high-value members. It's a win-win for Lookout and the communities we serve,” said Amy Cicilliot, Chief Operating Officer.
Pima Federal Credit Union in Arizona is taking a similar approach: “We joined ModernFi to provide more security to our members with larger deposits. Extended insurance is helping us build trust with those members,” said Bruce Barnett, Chief Operating Officer.
A Collaborative Future, Rooted in Shared Values
While business banking, public funds, and individual services are key drivers for credit unions joining the ModernFi CUSO network, they're not the only reasons. Many institutions are leveraging ModernFi's solutions to better serve nonprofits, a sector that often requires enhanced deposit security. Others are using the network to support strategic acquisitions, ensuring a smooth transition of large-value accounts.
The Honorable Rodney Hood, former chairman of the NCUA and ModernFi board member, emphasized the broader impact: “We’ve never had a tool or technology like ModernFi within the credit union system before. Deposit insurance is now important. [March 2023] was a wakeup call for folks. I look at deposit insurance like oxygen; you don’t really realize it’s there until it’s gone.”
Regardless of their specific focus, credit unions across the spectrum are harnessing the power of ModernFi CUSO to drive their strategic objectives, better serve their members, and fuel sustainable growth. As the network continues its rapid expansion, it's clear that the collaborative spirit of credit unions helping credit unions is fostering a more robust and resilient movement, poised to meet the evolving needs of members in an increasingly complex financial landscape.
Discover how ModernFi can support your deposit growth objectives.
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Best,
The ModernFi CUSO Team
* Deposit insurance provided through program credit unions (subject to meeting certain conditions)
Sources
1 Credit union data provided by NCUA Call Reports
2 S&P Global
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