• Bill Seymour

CUs and Government Partnerships

As credit unions move from banking 2.0 to banking 3.0, the progressive credit union seeking to build membership and expand attractive services to help that goal should look for the diamonds in the rough of government partnerships.

These explorations can produce interesting and exceptionally valuable finds, just as Nutmeg State Financial Credit Union discovered in Connecticut.

I served until my retirement a year ago, as the Chief of Staff to the Connecticut Department of Motor Vehicles Commissioner. Lumbering DMVs and other government operations, hampered by old technology and an inability to fulfill expectations for quick service sought by today's tech-savvy customers, need outside-the-government solutions to address these issues.

For more than a decade, the DMV had one private-sector vendor providing license and ID card renewal services in New Haven and Fairfield counties in the southern part of the state. Suddenly a call came - that vendor, which had a membership organization, wanted to serve only its members.

In discussions with our legal staff as well as the Governor's Office, we determined that was not possible. Any vendor offering state services needed to serve any member of the public. The vendor eventually served notice it was pulling out since we would not conform to its business model.

I became the designated person to help find replacement candidates. Among the many ideas suggested was a credit union. We had only partnered with this specific vendor that left, so a credit union was a new -- and perhaps unusual -- consideration for a partner, if only because we knew little about them.

I was game to explore them. Other DMV officials and I met with one credit union and had discussions over a period of time. That credit union declined to offer our services because some customers represented the "riff-raff" of the community and the credit union would need to hire more security.

But I didn't give up. Even through credit unions were not banging on my door to sell themselves, I could see the potential investment of my customers providing a continuous flow of potential membership opportunities.

Having the experience of only one credit union and it wanting to be selective -- a business decision I could not afford -- I sought another. After a few phone calls, I found Nutmeg State Financial Credit Union in nearby Rocky Hill, Conn. In our first discussion, its officers made clear their business strategy included helping under-served populations that are also among the citizens to whom government provides licenses and IDs.

As more discussions unfolded following a solicitation for requests for quotation, it became clear that Nutmeg, and its strategic partner DaLand CUSO, could bring technological advancement that the state had neither the resources nor the human capital to develop. On the other hand, DMV could offer a non-traditional flow of customer traffic into Nutmeg branches to support its strategy of increasing foot traffic via non-traditional banking services. Due to the growing online self-service solutions Nutmeg is providing, these brick-and-mortar locations allow the credit union acquire new members and provide members an unparalleled in-branch self-service experience to satisfy all their banking needs.

A partnership eventually developed and it opened two offices to rave reviews from the public and the media. It became a model for DMV 2.0 license and ID card renewal services.

The lesson here is simple: Credit unions should seek out hidden opportunities in government. Gems could be anywhere in the government wilderness. Yes, there are trails to blaze, but without doing it, opportunity may never present itself.

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