A New York credit union that caters to those in the theatrical community has found success in an incongruous niche: placing low-surcharge automated teller machines in McDonald's restaurants in Manhattan.
Actors Federal Credit Union, whose headquarters are located on Broadway in Times Square, has become the city's largest credit union deployer of ATMs. Moreover, customers now seek out its machines, which impose 99-cent surcharges in a market where the going rate is between $1.50 and $2.
"What we've done without intending to is we've created a brand for ourselves," said Steven R. Sobotta, the credit union's marketing director. "They look for and recognize the yellow signs with the 99-cent ATM surcharge."
The machines pay for themselves and spur membership growth, Mr. Sobotta said. "More members means more saving accounts, more checking accounts, more mortgages, and more auto loans. That's how it's growing."
Actors Federal Credit Union -- which serves 48 unions within the Broadway and entertainment community -- expects to have $72 million of assets by yearend. It now has 85 ATMs -- 75 of them in McDonald's franchises -- and continues to place two to three more a month in the restaurants, Mr. Sobotta said.
The program started by chance. The credit union's headquarters is located on top of one of the busiest McDonald's restaurants in the country, and the credit union's then-loan manager overheard the restaurant franchise owner express the need for an ATM. Soon, executives from the credit union and the McDonald's met and closed a deal.
Word spread among McDonald's owners, and soon more of them were approaching the credit union about ATMs.
"It has turned out to be a great positive, because McDonald's is always clean, well lit, and they're safe," Mr. Sobotta said.
As for McDonald's, some franchise owners have noticed increases in their average check, but not all. James R. Lewis, who owns the Times Square franchise and is the president of Lewis Foods in Darien, Conn., said that he has not seen any discernable change.
The machines, made by NCR Corp., are like those typically found in convenience stores -- they are 18 inches wide and do not accept deposits. "We're not trying to be a …