The Curious CUSO: What is a Credit Union Service Organization?
For those dedicated readers of this blog — you may have noticed an unfamiliar phrase popping up with familiar frequency: credit union service organization.
In a previous post, we noted some of the changes and developments taking place since M3 Group became a subsidiary of Reseda Group in 2022. Reseda Group is a credit union service organization founded and owned by Michigan State University Federal Credit Union. Through the acquisition, M3 Group joined a team of companies under the Reseda umbrella supporting credit unions.
But what exactly is a CUSO — and, perhaps more importantly, why does it matter? To borrow an oft-used line from my high school history teacher right before he launched into a lengthy explanation on any given topic, “So what, who cares and what difference does it make?”
A CUSO is a collaborative entity formed by credit unions to provide specialized services to their members. CUSOs are typically created to offer services that individual credit unions may not have the resources or expertise to provide on their own.
To put it another way, it’s that “bigger boat” Chief Brody was pining for in “Jaws.”
The National Association of Credit Union Service Organizations (NACUSO — which sounds like the less-popular brother to famed snack and cookie manufacturer Nabisco) compiled a detailed 13-page history and evolution of the CUSO, which can be found here for those of you grappling with the throes of insomnia.
For the rest of us, let’s keep this simple. CUSOs offer a wide range of specialized services that benefit credit union members, including but not limited to technology solutions, lending/mortgage services, compliance and risk management, and marketing and member engagement (Hey, that’s us at M3 Group!). In addition to M3’s marketing magic, Reseda Group also boasts another wholly owned CUSO partner in Foresight Group; products such as Ever Green and ChannelNet; and a wide range of investments, including Pocketnest, BenefisCU and Nextly.
Plus, there’s benefits to credit unions that are afforded through a CUSO.
Cost efficiency: By pooling resources and sharing expenses, credit unions can access specialized services at a lower cost compared to developing them in-house.
Expertise and innovation: CUSOs bring together professionals with specialized knowledge and experience in their respective fields. This allows credit unions to leverage the expertise of industry experts and stay at the forefront of technological advancements.
Collaboration and networking: CUSOs foster collaboration among credit unions, enabling them to share best practices, exchange ideas and collectively address common challenges. That collaborative environment promotes innovation and growth within the credit union industry.
By leveraging the strength from each industry arm of a CUSO, mutually beneficial collaborations provide credits unions with a win-win-win scenario for the institution, its membership base and the companies in the CUSO fold to compete, grow and evolve in the widening financial landscape.