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Credit unions in New York and 11 other states will soon begin providing services to one another's customers, effectively establishing an interstate branch system.
The project, with its visions of full-service offices in shopping malls and stores, raises a challenge for banks.
The network, operating shared-service offices as Credit Union Service Centers, will allow credit unions to offer customers deposits, withdrawals and even loans when they travel to any state that the system covers.
Six Buffalo area credit unions with more than 25,280 members and assets exceeding $75.98 million are among the project's first investors.
Sponsors say the interstate network will reinvent the credit union movement by making services available to many new members.
"We see it as having more impact on the financial services industry than anything since credit unions introduced share drafts in 1976 or 1977," said Charles Whitney, chief executive of the New York State Credit Union League Inc.
Whitney said share draft accounts, credit union checking accounts that pay earnings as dividends rather than interest, forced banks to begin offering interest on their own checking accounts. …