FEDERAL WAY, Wash. (9/19/12)--Dan Hein, vice president of administration and finance for the Northwest Credit Union Association (NWCUA), spent a day in August meeting with representatives of the National Credit Union Federation of Korea (NACUFOK), the hub of the Korean credit union system.
Tae-Jong Zhang (left), chairman and president of the National Credit Union Federation of Korea, visited with Dan Hein, vice president of administration and finance for the Northwest Credit Union Association, at Korean credit union headquarters in Daejeon, South Korea. (Photo provided by the Northwest Credit Union Association)
Hein's visit to South Korea was essentially a first step, an opportunity to develop a friendship between NACUFOK and the NWCUA and to share knowledge about each organization (Anthem Recap
NACUFOK was established in 1964 and is the fifth-largest national credit union trade association or federation in the world, with roughly US$42.8 billion in assets, 5.86 million members, and 955 total credit unions as of 2011.
In many ways, the Korean credit union system resembles the U.S. credit union movement, with a mission founded on the same principles of cooperative finance that guide credit unions worldwide. Headquartered in the city of Daejeon in a skyscraper owned by the federation, NACUFOK is essentially Korea's equivalent of the U.S.'s Credit Union National Association (CUNA). However, instead of working with autonomous state and regional leagues and associations, NACUFOK has a number of regional branches serving credit unions on a more local level.
Hein met with NACUFOK Chairman and President Tae-jong Zhang to discuss the two countries' credit union systems and general financial industries.
Hein also talked to NACUFOK's information technology (IT) manager, who led him through the restricted-access server room. In the year 2000, NACUFOK developed and launched the Intra-Network system, which connected all of the country's credit unions onto one core system. By comparison, John Lass, senior vice president, strategy & business development at CUNA Mutual Group, recently estimated that 92 different core processors are used by credit unions in the U.S.
In 2008, NACUFOK also implemented a new IT financial system. Because of these efforts to unify the nation's credit union operations, the server room Hein toured houses all servers that process all Korean credit union transactions, online banking services, and other IT-related activities. Servers are grouped together based on their primary function.
Later in the afternoon, Hein met with NACUFOK's planning and coordination department staffers to discuss the U.S. credit union movement.
"They were very interested in the challenges that U.S. credit unions are facing and how they are working to best meet those challenges," Hein said. "They also asked about the NWCUA and our role with credit unions and how we are helping the industry."
The department also was interested in the U.S. credit union system structure, asking specifically about the credit union tax exemption. In Korea, credit unions are not taxed, and credit union members pay lower tax on interest income for certificates of deposit.
NACUFOK's nationwide marketing and public relations efforts is a unified approach that has helped create more credit union brand awareness for each credit union, Hein learned.