The SAR Activity Review Issue 12 - FinCEN

Credit Union Cooperatives
This section of The SAR Activity Review outlines findings from Suspicious Activity
Reports referencing credit union cooperatives that provide shared-branching
services to member credit unions.
Credit Union Cooperative Shared-Branching Model
Credit union cooperatives operate networks that provide Electronic Funds
Transfer/Automated Teller Machine/Point of Sale (EFT/ATM/POS) and sharedbranching
services to the cooperatives’ member credit unions. Where applicable,
cooperatives’ EFT/ATM/POS networks enable members of participating credit
unions to use other participating credit unions’ ATMs without paying fees or on a
reduced-fee basis. Shared branches allow members of participating credit unions
to conduct transactions at either branches of the cooperative’s other participating
credit unions or facilities that are managed by the cooperative itself.
There are three types of shared branches: 6
• Outlet – A facility owned and staffed by a credit union where members
of other credit unions, within the same cooperative network, can conduct
transactions.
• Stand–Alone – A facility owned and staffed by a credit union cooperative,
where members of participating credit unions can conduct transactions.
• Partnership Outlet – A facility owned by a credit union or group of credit
unions and staffed by employees of the cooperative, where members of
participating credit unions can conduct transactions.
Credit unions belonging to shared-branching networks fall into two categories:
• Issuer – Credit unions that allow their members to conduct account
transactions, transfers, or payments at other outlets, partnership outlets,
and stand-alones within the same shared–branching network.
• Acquirer (Issuer/Acquirer) – Issuers that serve as outlets by accepting and
processing transactions from members of other credit unions within the same
shared–branching network.
In a given transaction, the issuing credit union pays a fee to the acquiring credit
union. If the transaction occurs at a shared-branching facility that is operated
by the cooperative, the issuing credit union pays a fee to the cooperative. The
cooperative annually distributes its income collected from fees to its stockholders.
Credit union cooperative shareholders can be credit unions, corporate/industrial
credit unions, state credit union leagues, or other credit union service organizations.
6 Swedberg, Jamie. “Share and Share Alike.” Credit Union Management. January 2006. pg. 38; and
Dernovsek, Darla. “Shared Branching Takes Root.” Credit Union Magazine. November 2005. pp. 44-47.
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