WHITE OAK, Penn.-Four small credit unions didn't know how good they had it with their original data processing vendors-until they converted systems, went through experiences that shook them to the core, then gratefully returned to their original vendors years later.
One CU left AMI Information Systems after six years for a core vendor that "was never available to answer questions or help with problems," said Joy Benedek, CEO at Alcose CU here.
But it gets worse, according to Benedek. "For many questions, the vendor's response was that they didn't know anything about credit unions." A year and a half later, Alcose boomeranged back to Racine, Wis.-based AMI.
Why did Alcose leave AMI in the first place? "Our former CEO claimed we couldn't grow with AMI," said Benedek. In three years, Alcose has grown to $15-million in assets from $6-million, a spike Benedek said she attributes to AMI.
One CU spent two years away from San Diego-based Symitar and two years out-of-balance, according to the CU's manager, who asked not to be identified in order to avoid potential lawsuits. "The new general ledger system was way too haphazard," said the manager.
"Once, the G.L. even rounded our entries for the day to the nearest even number," the manager continued. The $4.5-million CU was on Symitar for at least 10 years before it migrated to the new system in 2008 and spent two years on shaky ground. The CU returned to Symitar in January.
Why Do They Leave in the First Place?
Why did the CU leave Symitar in the first place? The homebanking product was "several thousand more than we could afford," the manager said. "Now, homebanking is offered as part of the package at no extra cost."
Bay Ridge FCU of Brooklyn, N.Y., experienced a drama of blackmail and lies-and a plethora of defects in its new system, alleged CEO Gene Brody.
The $125-million CU left a legacy Share One platform after 17 years to seek out a core system that was Windows-based, Brody said. After conversion to a large CU core processor, Bay Ridge discovered that its "new" system was actually an "old non-Windows system purchased from another provider with added Windows screens," he said. "By the new processor's own subsequent admission, the system was wrought with bugs. We believed that by going with one of the largest processors, we would get a finished Windows-based system with strong financial backing. They lied to us."
System problems included miscalculations in several areas, among them loan interest; loan late-fees; borrower debt-to-income ratio; loan remaining months-"and the list goes on," said Brody.
CUs' Dirty Little IT Secret
Other CU users revealed nothing when Bay Ridge contacted them for references before purchasing the "faulty" system, said Brody. "We discovered the users had been blackmailed. They had been told to give us glowing reports if they wanted their bugs fixed."
Fortunately, Bay Ridge had insisted on a contract that guaranteed satisfaction for the first five years, he said. "That's the clause that enabled us to get out and negotiate a pro-rated refund."
Bay Ridge is relieved to have converted back to Memphis, Tenn.-based Share One in 2004 after two years on the "faulty" system, said Brody. Since then, the CU has grown to $125-million in assets from $61-million, thanks to Share One's new system, a "Windows-bases system inside-and-out that is everything we wanted," he said.
For EvergreenDIRECT CU of Olympia, Wash., all that glitters was not gold at its new, larger core vendor, according to Ed Danz, CEO at the $43-million CU. The larger vendor had plenty of "flashy" functionality, such as electronic bill payment and a GL reporting system, but it really didn't matter to the membership, he said. The functionality came at a high price, as well.
EvergreenDIRECT bounced back in 2009 to Sandy, Utah-based CMC after 10 years with the larger vendor, for a comparative savings of $5,000 per month, Danz told Credit Union Journal.