Current News

Palmetto CUSO completes successful capital infusion campaign

COLUMBIA, SC (12/18/09) Palmetto Cooperative Services, LLC (PCS) has just completed a successful campaign to raise additional capital necessary to support growth and success for the credit union service organization (CUSO).
Responding to a private placement offer, twenty-six (26) South Carolina credit unions have joined with South Carolina Service Corporation (SCSC) to provide more than $8 million in capital.
In business since 1969, PCS was a wholly-owned subsidiary of the South Carolina Credit Union League prior to becoming an independent CUSO earlier this year. While its structure has changed, PCS remains true to its cooperative foundation and its mission of serving credit unions.
The collective investment is an early milestone on the CUSO's new path, according to PCS, LLC President and CEO Ed Culpepper, and one that will enable further shifts.
"The new funding will be used for debt restructuring, research and development, and marketing enhancements," Culpepper said.
PCS currently provides item processing services, Check 21 solutions, paper and electronic statements, and periodic notices to nearly four-hundred (400) credit unions nationwide, with new credit unions being added every month. As a CUSO, PCS' focus on credit unions and their unique needs remains true. Even with the continued decline in check volumes nationwide, PCS processing continues to grow.
With many credit unions seeking alternatives to their corporate credit union, PCS expects to add more item processing customers next year. Existing customers enjoy a full range of Check 21 solutions including Branch Capture, Teller Capture, Merchant Capture and ATM Capture.
According to Culpepper, consideration will be given to expanding the ownership opportunities during 2010.
"The board of directors wanted to ensure that South Carolina credit unions had the first ownership opportunities," Culpepper noted. "After all, they're the ones that had the vision to create the company and the ones who have supported us for the past forty years.
"As we expand our market to include multiple states, we will want to provide additional opportunities for those customers to have an ownership interest, ans we'll do that next year," he added.

SC Credit Union League establishes PCS, LLC; renames league service corporation

Action by the South Carolina Credit Union League (SCCUL) Board of Directors effective January 1, 2009 has renamed its wholly-owned subsidiary, established Palmetto Cooperative Services, LLC (PCS, LLC), a limited-liability company under a three-member Board of Managers, and named Ed Culpepper, formerly chief operating officer of Palmetto Cooperative Services, Inc., as president of PCS, LLC.

Under the new structure, PCS, LLC accepts transfer of certain assets and business lines from the wholly-owned subsidiary. This sets up PCS, LLC for improved capitalization through investor ownership, which in turn will enable further development of services and technology, enhance marketability, and align representation with the company's diverse customer base. Investment options will be made available nationwide.

Leading PCS, LLC is a new Board of Managers: Paul Hughes, president of Greenville Federal Credit Union (Greenville); Garry L. Parks, president and CEO of SCCUL; and Scott Woods, president and CEO of South Carolina Federal Credit Union (N. Charleston).

The scope of activities for PCS, LLC includes:

• Providing advanced payment systems and services including image-based processes such as branch capture and item exchange with the Federal Reserve; and
• Offering customizable communication services such as statement and insert processing, notice production, and single- and multi-color printing.

Accompanying the establishment of PCS, LLC is the renaming of the League's wholly-owned subsidiary from Palmetto Cooperative Services, Inc. to South Carolina Service Corporation, Inc., or SCSC. SCSC will continue to serve South Carolina credit unions through system relationships and administration of fee-based services for SCCUL-member institutions. Those include conferences and training, accounting and bookkeeping, and internal audit.

SCSC was originally founded in 1969 as Credit Union Marketing Services, Inc. to provide shared essential resources to South Carolina credit unions, many of which would have been unable to independently establish and fund the same services.

Security of PCS procedures validated by SAS 70 audit

(8/18/08) - Palmetto Cooperative Services, LLC. (PCS) is proud to announce that results of its recent security audit indicate that PCS systems and safeguards meet all requisite standards for protecting client member data.

Earlier this year, PCS underwent its second Statement on Auditing Standards No. 70 (SAS 70) review, an internationally recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA), to assess control activities relating to security data. The audit tested and thoroughly reviewed processing of payment and deposit items, paper and electronic statements, periodic notices and other products.

Beyond regular audits, PCS emphasizes ongoing review and appraisal of its controls and makes upgrades year round.

Because PCS takes seriously its responsibility to safeguard client member data--and because its own business had witnessed the transition to more electronic and online-based processes--it originally contracted with the firm of Orth, Chakler, Murnane and Co., CPAs (OCM) in 2006 to review all of its systems and processes. In the months that followed, procedures were reviewed and tested, recommended changes were implemented, and reviews and testing were performed again.

The most recent examination included procedures to obtain reasonable assurance about whether:

• ...the full report presented fairly, in all material respects, the aspects of PCS's controls that may be relevant to a user organization's internal control as it relates to an audit of financial statements;
• ...the controls included in the description were suitably designed to achieve the control objectives specified in the description, if those controls were complied with satisfactorily and user organizations applied the controls contemplated in the design of PCS's controls; and
• ...such controls had been placed in operation as of August 4, 2008.

The audit process was performed in accordance with standards established by the American Institute of Certified Public Accountants and included those procedures OCM considered necessary in the circumstances to obtain a reasonable basis for rendering our opinion.

OCM found that the described controls were suitably designed to provide reasonable assurance that their specified objectives would be achieved if the processes were complied with satisfactorily and if credit unions applied the controls contemplated in the design of PCS' controls.

During its review, OCM applied tests to specific procedures to obtain evidence about their effectiveness in meeting the control objectives during the period from April 1, 2007 to August 4, 2008. The specific controls and the nature, timing, extent, and results of the tests are listed in Section III of the full report, which is available from PCS upon request.

According to the OCM report, the PCS controls that were tested were operating with sufficient effectiveness to provide reasonable, but not absolute, assurance that the control objectives were achieved during the period from April 1, 2007, to August 4, 2008.

The report did note that the effectiveness and significance of specific procedures at PCS and their effect on assessments of control risk at credit unions were dependent on their interaction with the processes and other factors present at individual credit unions.

OCM also noted in its report that it did not evaluate the effectiveness of controls at individual user organizations.

The entire 74-page report by Orth, Chakler, Murnane and Co, CPAs is available in PDF format by sending a request to Mark Curran, Senior VP/business development.