Just as investors should iversify their portfolios, the same can be said for credit unions as we look
to establish credit union service
organizations, or CUSOs. Diversi-
fy and grow should be our mantra!
Redstone Federal CreditUnion’s CUSOs branch out in unexpected, yet intertwined ways.Our subsidiaries include Redstone Insurance Services, Redstone Consulting Group, RedstoneTitle Services and Redstone Family Realty. All are wholly-owned byRedstone and serve a wide rangeof members, non-members andother credit unions.
It was important for us to builda network of CUSOs that couldstand alone, but become strongerand even more successful whenworking in concert with one another to meet members’ needs.
It began with our first CUSO,Redstone Insurance Services,which became the hub as othersbegan to sprout around it.
As an independent agency,
Redstone Insurance Services
shops for the best coverage and
price for members or clients
across multiple carriers. It has be-
come a flexible and worthy com-
panion to the credit union’s other
high-earning products. Car buy-
ers, new homeown-
ers and the general
membership all need
The insurance CUSOhas grown to nearly10 employees thisyear with a net worthof more than $4.8million.
Our members cannow find a home using Redstone FamilyRealty and pay for it using a mortgage from Redstone. They canclose the home loan using Redstone Title Services and protectit and its contents through a policy from the insurance group. Wehave created a true one-stop shopfor key real estate needs.
Todd Howard, president of
Redstone Family Realty and Red-
stone Title Services, said it’s about
choices: “We know that our clients
have choices. For that reason, we
created a one-stop shop that gives
them quality choices, plus signifi-
cant discounts and convenience
when they use these services to-
gether or separately.”
The CUSO’s clients reap the
benefits of this synergy. Knowing
the organizations are under the
umbrella of a respect-
ed and strong par-
ent company builds
When used together,members can savehundreds or thousands of dollars andtime.
The realty agencywas added to themix in late 2019 after we purchased alongstanding agency,retained its Realtors,Family Realty. The pandemicstruck just as the agency begun itsrebranding in the market. However, with a booming real estatemarket, there has been lots of activity as the agents learn what newproducts and services are now intheir arsenal.
Howard believes the agency is
an “absolute game-changer” in
this competitive real estate mar-
ket. It’s a solid business model
that is built on the reputation and
integrity of two time-tested orga-
nizations. It’s a service and rela-
tionship that makes sense for our
The title company started from
the ground up in 2013 and has
grown to 23 employees who are
on track to process more than
3,800 title searches this year. Over
the past five years, it has saved
members an estimated $1.5 mil-
lion in closing costs.
Redstone heightened itsunique selling proposition forits one-stop real estate shop byoffering an $899 flat mortgageorigination fee starting in January 2020, which increased members’ savings even more. Our executive team and the CUSOs areroutinely looking for new ways tosynergize one another’s productsand services while adding valuefor our members.
In some ways the joint branding– which targets members of theRedstone Federal Credit Unionfamily – has been both a benefitand a challenge.
When marketed together,members sometimes have a difficult time differentiating between what represents the creditunion and what represents itssubsidiary. Either the publicthinks the CUSO services areonly for Redstone members, ormembers call the CUSO for actions that must be handled bythe credit union.
Cohesive branding across thecredit union and CUSO takes advantage of a member’s loyalty tothe credit union brand. However,because most of our CUSOs servethe community at large, they mustalso market to the entire community – not just to credit unionmembers.
Redstone Consulting GroupCo-branding is not an issue forRedstone Consulting Group. Itis the only business-to-businessCUSO on our list, providing software and service solutions forother credit unions. Its four-per-son development team is complemented by business operationsand sale expertise. Since 2017, itsclientele has grown significantly– from 10 credit unions to morethan 50 credit unions and community banks today.
The consulting group has
a unique set of challenges:
Marketing to an entire industry
and not a set membership or
geographic area, and hiring and
training developers who are flu-
ent in working within Fiserv’s
Its leaders attended industryconferences and trade shows tomitigate those hurdles in the past;however, with the pandemic shutting down in-person events, theywere sent back to the drawingboard.
Hiring the right people is a challenge faced by all our CUSOs.
Kevin Carroll, president of Redstone Insurance Services, said histeam must have a mix of industryknowledge, all the required professional designations and certifications, and the ability to adaptto working for an agency that is affiliated with a credit union. That’sa tall order!
It can also be difficult for leaders of larger financial institutionsto remember that their CUSOs areactually small businesses whereflexibility is necessary to pivotquickly to address an issue orjump on an opportunity that presents itself.
Making It Work
Despite the challenges, I knowthat CUSOs provide an excellentvehicle for credit unions to expand their products and servicesto meet their members’ financialneeds, and to increase their efficiencies through relationshipswith other cooperatives. They alsogenerate noninterest income forthe credit union.
Here are some best practices to
keep in mind:
• Narrow your ambitions to what
you do best and can execute
successfully with the team you
have in place.
• Identify your clients and knowhow to communicate withthem.
• Engage an industry expert early on in the process. You don’tknow what you don’t know.
• Leverage the knowledge, skillsand insight of credit union staffand management, but do notrely on them to fully understand your business. n
CUSO Network Generates Success-Boosting Synergy
Senior EVP and CFO