FORT COLLINS – Norlarco Credit Union is expanding its membership to encompass all of Fort Collins.

Although the credit union’s charter allows membership for the community at large, Norlarco previously has remained focused on smaller groups and businesses, known in the industry as select employee groups.

Norlarco boasts 164 such groups, including Colorado State University, Poudre R-1 School District, Poudre Valley Hospital, the city of Fort Collins and Teledyne Water Pik.

Now, however, changing dynamics in the banking industry have prompted the credit union to expand.

“We’re changing our marketing focus to include all of Fort Collins, rather than just concentrating on the SEGs as we used to,´ said Norlarco president Ray Swanson.

At the same time, Norlarco is stepping up its efforts to cement relationships with its SEGs in an attempt to gain and retain direct-deposit customers.

These two business decisions are based on the changing demographics of the U.S. workplace in general, and the way these changes are affecting banking in Fort Collins.

For example, few employees spend their entire careers with one employer anymore. In the past, Norlarco would make agreements with its SEGs that those employers would send their direct-deposit payroll checks to the credit union. Now, employees choose their own financial institutions, and the payroll processor sends the employee’s check wherever the employee designates.

“With the advent of direct deposit of net pay,” Swanson said, “the unique relationship between credit unions and an employer is fading away.”

Concurrently, some employees might distance themselves from the credit union because employers do not want to be perceived as favoring one financial institutions over another.

“I view it as a probability that we will lose our exclusivity with our SEGs,” Swanson said.

Expansion of Norlarco’s marketing base puts it in direct competition with commercial banks serving the area. Robert Pappenheim, CEO of Key Bank of Colorado, said, “Anytime there are alternative opportunities for any business’s customers, yes … it will divide market share.”

Among credit unions, Norbel Credit Union probably is Norlarco’s closest competitor because it services a large customer base that in some areas overlaps that of Norlarco.

“I have to say that we wrestle with the field-of-membership overlap issue concerning Norlarco,´ said Ed Bigby Jr., Norbel’s president and CEO. “In the past, a credit union’s field of membership has been real defined so there hasn’t been much competition. But, yes, I expect we’ll experience some competition with Norlarco.”

Founded in 1959 by employees of Colorado State University, Norlarco has 74 employees, 26,000 individual members, and total assets that just recently exceeded $100 million. The national average in mid-1995 was $25.3 million in assets per institution.

Out of 197 credit unions in Colorado, Norlarco ranks in the top 6 percent in terms of membership and assets.