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By Nathan Peck | MiBiz
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GRAND RAPIDS — To survive is to adapt.

Grand Rapids-based Xtend Inc. is providing credit unions the ability to react to changing market demands. Xtend, a credit union service organization, is owned cooperatively by 47 credit unions with assets ranging from as little as $10 million to more than $200 million, and serves more 150 credit unions across the U.S. Founded eight years ago as a means to support back-end operations for its member credit unions, CEO Scott Collins says the Xtend model can serve as a model for credit unions of all sizes to grow and thrive.

Xtend employs 30 people, and provides bookkeeping services, member outreach and call center services for credit unions. Total sales for FY 2009 were up 39 percent over a year ago, driven by a 30-percent increase in its bookkeeping service and 14-percent growth in its electronic communication business.

Collins recently spoke with MiBiz about how the CUSO is growing its service offerings to include compliance to help the industry grow.

MiBiz: Many are familiar with CUSOs from an underwriting standpoint — several participating credit unions pool their resources to complete loans that they individually would not have the capacity to do individually — but how does Xtend operate?

Collins: We started out trying to see if we could drastically reduce costs for credit unions to help them survive and thrive. We’ve done that and now have shifted to help them create more revenue. Our call center makes or takes 20,000 calls per month.

Through our marketing services, we’ve reached out with 1.5 million electronic communications. For our credit unions, we try to be very aggressive and forward-thinking as we’re reaching out to businesses. Traditional banking does a great deal more marketing, offering mobile banking. They have all those tools to bring to their marketing, (but) credit unions typically don’t. Our industry, I’m painting with a broad brush here, does more stealth marketing. Xtend is trying to kick that into high gear.

We have developed business services that our credit unions need. We do back office work for 50 credit unions. As smaller credit unions have experienced attrition and didn’t want to hire a new person while wanting to offer new products and services, their existing staff was too busy in the back office to take on all these roles. It’s not outsourcing, really it’s out-tasking. One person (at Xtend) can support seven or eight credit unions. We can do it at a price point that doesn’t eat into the budget of the smaller credit unions.

MiBiz: How is the industry responding and how do you fit into that?

Collins: We are a shared resource business. We are trying hard to get credit unions to partner with each other. Xtend is a model to do that, and if we can be a model for the industry, I will be happy.

In October we are trying to get credit unions that do business in the region to meet and get in business with each other. I will give you the business plan, the run sheets that we use. Credit unions often have excess capacity in some area, (so) why not partner with another credit union if you have a great loan officer and maximize that resource? The only way the credit union brand is going to survive is to share resources and network with each other. It all comes down to breaking down those barriers to cooperation.

MiBiz: What is 2010 looking like for you and your clients?

Collins: We are seeing positive trends with the partners we work with. They’re getting more deposits, which I think is a flight to safety and local banking. There is the opportunity now for them to develop more aggressive lending portfolios and we have the tools to be able help them. Though we don’t do underwriting per se, we can put together marketing campaigns raising the awareness of their products, providing turn-key solutions for lenders.

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TAGS:

• credit unions
• finance
• grand rapids
• scott collins
• xtend inc