A credit union member pushed a plastic card into a machine in a Peoples Drug Store in Hyattsville yesterday and began using the most sophisticated electronic banking system in the country.
The card activated a computer in Valley Forge, Pa., that keeps records for most of the 10 Washington credit unions participating in the system.
The electronic teller machines enable 33,000 credit union members to transact business at seven drug stores around the Beltway without going to their credit union offices.
The network is the first off-premesis system of automatic tellers for credit unions the first interstate electronic funds transfer system (EFTS), and the most advanced EFTS network, say its creators.
"We beat the hell out of the banks," said Robert Shallow, president of USERS, INC., the company that set it up.
Credit unions beat banks into electronic banking because federal restrictions that limit bank use of the machines do no apply to credit unions. The machines are considered to be branch banks; branch banking is limited by law and interstate branch banking is prohibited.
The National Credit Union Administration, which regulates the industry, authorized the Minuteman network as a six-month pilot project. After evaluation it will be offered to other credit unions, Shallow said. He predicted 100,000 credit union members would use the system the first year.
USERS is a co-op owned by 300 credit unions, that provides computerized bookkeeping services to its members, it developed and programmed the system in co-operation with the local credit unions.
The credit unions pay USERS 45 cents a card a month for the service, they also provided the $200,000 in cash needed to stock the system.
USERS pays the participating Peoples and Dart drug stores $200 a month rent on the floor space for the machines.
The credit unions are NASA, Andrew AFB, Greenbelt, Prince Georges Teachers Association, Washington Metro IMM, Washington Postal Employes, Government Printing Office, ERDA. The Washington Post and Safeway.
When a credit union member puts the magnetically encoded card into the machine, it contacts the computer in Pennsylvania and calls up the member's account record.
The NASA and Andrews AFB credut credit unions have their own computers, so cards from them are automatically transferred back to those computers for handling.
The computer then authorizes withdrawals from the account, accepts deposits, takes loan payments, or dispenses a pre-approved loan or cash advance. If a stolen card is inserted, the machines eats it.