Coopetition in Action: Why Credit Unions First and Innovative Business Solutions Are Collaborating

In 2008, nine credit unions in the Carolinas had the same problem. Three of them competed in the same South Carolina market. Instead of each solving it alone, they solved it together. That decision became Innovative Business Solutions (IBS). It’s also why Credit Unions First and IBS recently formed a mutual referral agreement.

Coopetition is when competitors cooperate on a shared challenge while still competing in other areas. The word blends “cooperation” and “competition.”

In the credit union world, it usually means institutions that compete for the same members pooling resources to do together what none could do as well alone. IBS is a good example. Those three South Carolina credit unions still competed for members, but they jointly formed a CUSO to handle commercial underwriting and servicing.

In this episode of Members First Mindset, Dan Daggett, CSO of Credit Unions First, and Melanie Munsey, CEO of Credit Unions First, sit down with Mark Cox, President and CEO of IBS, and Nicol Matthews, Chief Operating Officer of IBS. They discuss how the partnership came together, how IBS supports credit unions in commercial lending and business services, and what a values-aligned partnership looks like in practice.

Built by Credit Unions, for Credit Unions

Those nine founding credit unions were entering commercial lending and needed help with underwriting and servicing. Mark Cox joined IBS in 2013 after a 35-year banking career. He calls his first look at coopetition a turning point: competitors setting rivalry aside to solve a common problem. Today IBS serves 24 credit unions across six states, and more are completing due diligence.

More Than Commercial Underwriting

IBS has grown well beyond back-office lending support. Nicol Matthews explains that the team now helps credit unions:

• Develop business deposit products
• Review their websites from a business owner’s perspective
• Adopt practices like a separate BIN for business debit cards
• Train their people through a compact commercial lending school, sales training for relationship managers, and sessions for state regulators

Size Isn’t a Barrier

Many credit unions assume they’re too small for commercial lending. Matthews points to a microcredit union in Greensboro, North Carolina that IBS helped build out business services in a banking desert. IBS meets credit unions where they are. Options range from full underwriting and servicing, to a shared lender program where two or three credit unions split the cost of a lender, to overflow and participation support.

A Partner, Not a Vendor

A vendor sells you a service. A partner works as part of your team. Cox says IBS operates as the credit department or loan administration department of the credit unions it serves. With NCUA revisiting vendor authority, Daggett suggests oversight could distinguish between CUSOs, credit union-owned vendors, and privately held vendors. Munsey adds that her years on the insurance CUSO side showed her that difference firsthand when examiners had questions.

Why This Partnership Makes Sense

Daggett, Munsey, Matthews and Cox met in person this past April and found their organizations closely aligned. Cox describes a shared purpose of doing what’s right for credit unions, whether through insurance or lending. For Matthews, it comes down to trust: when a credit union needs insurance help, she knows where to send them. Daggett notes that neither organization uses one-size-fits-all pricing. Credit Unions First will take a lower commission when that makes a deal work for a credit union.

The People Behind the Work

The numbers are impressive. IBS has underwritten more than $7 billion in commercial loans over 18 years. The stories stand out more. Matthews once hired a Walmart cashier into a credit union call center, and within three or four years that employee was managing it. Munsey closes with the bigger picture: commercial lending creates jobs and economic activity in the communities credit unions serve.

What This Means for Your Credit Union

If you’ve wanted to offer commercial lending or business services but weren’t sure you had the size, staff, or expertise, you don’t have to build it alone. That’s the point of coopetition, and it’s what this partnership is for.

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