Leaning Into Loans

This week, CreditUnions.com looks at popular credit union lending strategies, from decentralized lending across hundreds of branches to a member business loan program 10 years in the making.

Preliminary third quarter data puts the credit union industry’s 12-month loan growth rate at 11.12%. That’s the highest since third quarter 2012. Collectively, the industry is posting some outstanding numbers, but how individual credit unions contribute to the bottom line differs.

Some focus on first mortgages, others on autos. To meet the needs of their membership, some hold higher percentages of credit cards or member business loans. On a more operational level, some run a centralized lending model while others choose decentralized.

This week, CreditUnions.com, looks at a variety of credit union lending strategies, from decentralized lending across hundreds of branches to a member business loan program that’s been steadily growing for the past 10 years.

State Employees’ Credit Union didn’t always operate with a decentralized lending network, but today, the second-largest credit union in the nation has more than 1,000 originators spread across its 254 branch footprint.

SECU admits it runs a complex model, but the model helps the credit union deliver on its promise to provide personal member service, says Mark Coburn, the credit union’s senior vice president of lending development.

To learn how SECU balances challenges with benefits, read How To Run A Loan Program With 256 Origination Centers by Callahan writer Erik Payne.

In any business strategy, credit unions must periodically weigh the pros and cons of current strategies against other options. Two years ago, that’s exactly what SECU of Maryland did when it moved its MBL program in-house.

On the heels of the financial crisis, we recognized an opportunity to pluck some local talent from commercial banks to build out the personnel we needed. It seemed the time was right, says Kevin Kesecker, vice president and chief lending officer at SECU of Maryland.

Learn how the credit union has fared so far in How To Move To An In-House Business Model by Callahan contributor E.C. Harrison.

In early November, Callahan & Associates conducted a one-question poll asking credit unions whether they adhered to a centralized lending strategy, a decentralized lending strategy, or a hybrid strategy. More than 200 credit union professionals answered, and Callahan compared the metrics of participating credit unions using Peer-to-Peer to see which lending model supported stronger credit union performance.

Check out the analysis in the CreditUnions.com Graphic Of The Week, Credit Union Lending Models by Callahan analyst Stephanie Clark

Establishing a successful member business lending program takes time and patience. That’s something 1st MidAmerica Credit Union knows well. The Illinois credit union has been building its business lending program slowly but steadily for more than 10 years.

In Know Your Borrowers And Other Business Lending Best Practices, Callahan contributor Sharon Simpson interviews Greg Worthen, chief operating officer, and Jeff Whitaker, vice-president of commercial services, to discuss what the credit union has learned through more than a decade of business lending experience.

Happy Reading.

November 16, 2015

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