Now in his 38th year, Oram has served as ICCU’s president and CEO since 2007. During that time, he has seen the march of technology from implementing fax machines and personal computers to cell phones, web pages, online banking, mobile banking, online loan applications, and imaging systems. At the same time, Oram has overseen steady, double-digit growth at ICCU, which has quadrupled its total assets since 2015.

ICCU is Idaho’s fastest-growing credit union and has consistently been one of the fastest growing in the country. In 2021, ICCU’s share growth (28.7%), loan growth (28.0%), asset growth (23.7%), and member growth (13.2%) more than doubled its peer group. At the same time, ICCU has been opening new branches 17 in the past six years to serve its nearly 500,000 members across Idaho, Washington, and Oregon

It’s a challenging, highly competitive environment, but Oram isn’t slowing down.

“Never take your foot off the pedal,” he advises.

Here, Oram talks about his career, his passions, leading through change, and the future.

On how a background in technology benefitted his career …

“I speak technology. That is extremely beneficial to not only understand tech but also enable us to hire the right people. Technology is a vital part of ICCU. The only effective way I have found to communicate technology changes is to speak early and often about the change, focusing as much effort as possible on ease-of-use and end-result benefits to both users and the members of the credit union.”

On management styles and working with the leadership team …

“I am not a natural delegator, but I have learned. My team is talented, and I know they will produce exceptional results. My job is to make sure they have the resources they need, which includes my support. I love leading my team. I say, people are more important than projects, meaning to make sure people are enjoying the process. They will give the best of themselves when they are.”

“Ask your teams, How’s it going? What should we do next? Are we having fun? Notice their behaviors and body language. Is it time for a pick-me-up? Recognize successes often, and share credit liberally.”

On ICCU’s growth strategy, what’s working, and lessons learned …

“We have been growing rapidly for more than two decades. I don’t know any other way. We assume that we are going to grow, and then our strategies back that belief. Fundamentally, we know we have to be relevant in the marketplace for both existing and new members. We spend immense amounts of time and money on community development. When we reach out to our community partners authentically, they will reciprocate. The more we connect with our business partners as partners, rather than vendors, the better.”

CreditUnions.com’s On Leadership series spotlights notable leaders across the credit union landscape by discovering how they joined the movement, learning what makes them tick, uncovering career lessons and successes, and seeking advice for the future of the movement. Read the whole series today.
On advice for keeping a growing organization motivated and able to meet challenges …

“Never take your foot off the pedal. Never fall for the we-need-to-catch-up thinking. In today’s world, the organization has to be designed to keep up, catch up, speed up all at the same time. We are always driving forward, and we attract and retain people who enjoy the process.”

“Recognize that perfection is an illusion and a hindrance to speed. Become comfortable with iterative design and deployment, knowing there will always be adjustments needed. We encourage our teams to be comfortable knowing we will continue growing, fixing, deploying, listening, and adapting. This is a daily struggle, but it is worth the struggle to keep pushing.”

On ICCU’s approach to balancing the branch network with digital initiatives and what the future holds …

“If I knew the future regarding branches, I’m not sure I would share! We are in Idaho where people drive, and distances between locations are greater. That is part of our drive to maintain branches.”

“We also love to engage personally. We have many branches to allow us to have deeper relationships with those members who want to visit us. We believe in being a physical part of our communities, which is another reason for branching. We spend lots of money on our digital offerings, too, and right now I think our balance is about right.”

On changes in the credit union business and how leadership has responded …

“Credit unions are more competitive with one another than 40 years ago when I started. ICCU has always operated as a community institution, so we are used to competition. The speed of doing business is radically different than in the past, and I think that is good for consumers. My job as a leader is to understand at least these two important long-term changes and guide us through them.”

On passions outside of the credit union …

“Spending time with my family, racquetball, water sports, snowmobiling, and trail riding. My wife, Dawnette, and I have three grown daughters and 13 grandchildren, and we split our time between Pocatello and Boise. I have always valued my family. The older I become, the more important those relationships are.”

This interview has been edited and condensed.

The post Kent Oram On Leadership appeared first on CreditUnions.com.

• Clearview FCU is on a mission to improve its digital strategy to make banking more convenient for members and more efficient for employees.

• Since 2019, the credit union has focused on digital channels, internal processes, and technological education for front-line staffers.

Clearview Federal Credit Union ($1.6B, Moon Township, PA) is no stranger to digital banking. For years it has offered digital channels and tracked how members engage with them.

In 2019, however, the credit union doubled down with a digital-first approach to operations. The billion-dollar cooperative knew technology whether online, via mobile, in the branch, or more was the best way to compete in a crowded market.

Today, Clearview actively communicates with employees about the credit union’s digital-first stance and even has embedded in branches technology champions to educate front-line staff about offerings and stress their member experience benefits.

In this Q&A, Bill Snider, vice president of digital strategy and marketing, and Janet Preteroti, vice president of member experience, discuss Clearview’s move to a digital-first mindset, changes it has made, branch champions, and more.

Why did Clearview FCU move to a digital-first approach?

Bill Snider: We needed to change our philosophy to compete as a financial institution.

From the member perspective, could they do business with us any way they wanted? If they wanted to bank on the phone, tablet,or laptop,were we giving them that? If they wanted to come in, did our technology provide the best possible experience? We wanted all the options with the understanding we’d expand them overtime.

Bill Snider, VP of Digital Strategy & Marketing, Clearview FCU

Internally, we had to be more efficient and wanted our employees to question processes. How can I make this more efficient? How can I make this less physical?

Every company is a technology company, and we realized that’s how we had to think, too. We had to give our employees and members access to the right tools and give our members the ability to bank with us any way they want.

Janet Preteroti: The first time we said,digital first,people assumed we meant doing away with in-person branch transactions and walking away from our branches. We spent time talking about what digital-first meant to Clearview, and it did not mean we were doing away with our branches.

What was the digital state of the credit union two years ago?

BS: We were evolving and decided to put our foot on the accelerator. We were on the right track, but we needed a faster pace.

We were evolving and decided to put our foot on the accelerator. We were on the right track, but we needed a faster pace.

We began to add features and functions to our online banking platform and mobile app. Internally, we began to look more holistically at projects and how they could make the whole organization more efficient rather than just one or two groups.

Did you have a roadmap for what you wanted Clearview FCU to look like? Did you set a timeframe for reaching it?

BS: We have an organization roadmap and roadmaps for each department. This allows the executive team, and all the teams that report to us, to understand what our plans and goals are. Those roadmaps allow us to see the big picture butalso make changes when necessary.

For example, when the pandemic started, we needed appointment scheduling because we weren’t allowing members into the branch unless they had an appointment. In concert with that, we needed video banking. The roadmap enabled us to slot those projects in, move others back, and implement the ability for members to schedule appointments without calling a branch and press a button on our website or mobile app to connect face-to-face with someone at Clearview.

The pandemic created urgency around what projects to deploy. Beyond that, how do you identify which projects to tackle?

BS: We have an IT steering committee that meets with the executive team on a regular basis to talk about projects. As I mentioned, we try to consider projects holistically, so if there’s a project that benefits at least three departments,it will probably receive a higher priority.

Like every other organization, we’re trying to do more with the same number of people and dollars, and we have to keep tweaking the process. These projects don’t just start and finish, they continue to evolve as our internal and external needschange.

What projects have you rolled out in the past two years?

BS: The big one is leveraging electronic documents throughout the organization. We ask departments that use more paper to consider how to automate or digitize their processes. Or HR department made electronic all the new hire onboarding files that used to be printed.

We implemented a new CRM system that will help us interact with our employees and members. It’s a living system, so we can add new features and functions.

And, we’re always adding new features to our online banking and mobile app. Video banking was a big deal for us. It’s something we think will make us different in our market, something potential members will consider when looking for a financialinstitution. Long term, it will help us reach more members without adding the branches we otherwise would have.

CU QUICK FACTS

Clearview FCU
Data as of 06.30.21

HQ:Moon Township, PA
ASSETS: $1.6B
MEMBERS: 109,664
BRANCHES:17
12-MO SHARE GROWTH:13.6%
12-MO LOAN GROWTH: 5.2%
ROA:0.73%

JP: We’re opening a microbranch later this year. It’s a small footprint with three employees at the location and video to support additional banking activity. We’re building an enclosed, soundproof booth in that branch that members can use to video chat with experts outside the specialty of our branch staff.

That’s changing how we look at branch footprints as well how we consider video. If we can connect with a member in real-time, maybe we can identify them more clearly and easily and jump over those hurdles we’d face in identification for onlineapplications or even wire transactions.

You called Clearview a technology company. With your offerings, who do you see yourself competing against?

BS: We compete against other banks. We’re in the Pittsburgh area. PNC is the big player that we benchmark ourselves against. The Bank of Americas, regional banks, and slew of online and fintech organizations, even if they are more niche players, don’t necessarily have all the solutions but we’re absolutely competing against them on the solutions they do have.

As an industry, we tend not to consider companies like Amazon, but because of Amazon, consumers want everything at the touch of a button. So that’s what we need to do. Whether its depositing a check or sending money to a friend, it needs to be easyand quick. During the pandemic, people have become even more accustomed to using their phones and computers to order food or shop. When they turn their attention our way, we need to offer that same simplicity.

How did your staff react to this digital-first approach? What educational efforts did you make?

BS:When you hear digital-first,it definitely makes some employees a little nervous. We continue to express to our teams that this approach does not eliminate anything, it just modifies how we work. Our goal is to makeit easier for a member to do business with us and make work more convenient and efficient for our staff. We keep reiterating that message and trying to connect the dots for our teams.

We also make sure everyone in the organization has the freedom to ask questions. Negative feelings can start if they don’t understand, if they’re concerned, and they don’t express that to a manger but do talk about it to their coworkers.

JP: We’re starting to see more people come to us with solutions for problems. It’s great to see that level of engagement, and we hope it spreads.

Clearview embedded digital champions in branches. How many are there? What is their purpose?

JP: We have 16 champions for our 17 branches one branch is in a retirement village, so we don’t have one there. We selected these employees because they have leadership potential and were willing to take on new responsibilities. From a functional standpoint, they’re more comfortable with technology, social media, and all those things.

We put champions in the branches when we introduced in-branch iPads several years ago, but their purpose has evolved since then. This spring, we surveyed our branch employees to gauge their comfort with technology and Clearview’s digital products and their personal use and interactivity with certain social media channels. From that, we grouped employees into three buckets: advanced users, those who are comfortable but not overly excited, and those who need help. The champions are all in thatadvanced group and spend time working with those next two tiers.

Do they have responsibilities outside of their duties as a champion?

JP: They’re fully functional universal employees. Some are more advanced and have lending capabilities, others do not. They’re part of the branch team and moonlight as our digital champions, although they do take some of the training responsibility off the manager.

Do those champions operate as a team?

JP: We bring the champions together once a month for a meeting to talk about issues and ideas and just connect and think about ways to follow Clearview’s technology roadmap. The champions try to align their training to what’scoming next in the development cycle. Someone will show the champions what’s coming, train them, and get their support and enthusiasm for what’s new. The champions then take that to the branch for the remaining staff.

It’s been great for the champions to connect with like-minded people who they might not have otherwise had the opportunity to connect with.

What comes next on the digital roadmap?

BS: We’re making sure we have the same functionality on our desktop and mobile banking applications. It might not be glamorous, but it’s what we have to do to make sure those channels are in sync. In addition, we’re making our alerts more timely especially in the cases of low balances or getting close to certain thresholds so members know that information as soon as possible.

One thing we want to do is add AI through chatbots. How far can we extend that self-serve model without having to call or use video banking? Where can that automation take us?

What best practices from your journey can you share?

BS: Before going to the organization and saying you’re going to be a digital-first credit union, management and above needs a unified definition. Everyone needs to be on the same page so the answers to questions are uniform. Westarted with digital-first and then came the definition. We might have caused unneeded heartburn. We always had the answer; they should have just come together.

Then, I’d say roadmaps help. Something that shows where you’re headed and where you want to be.

JP: For me, it’s having the champion that person who is not corporate but who is excited for each and every thing we do and shares that passion and understanding with others.

This interview has been edited and condensed.

The post What Does ‘Digital-First’ Mean For Clearview FCU? appeared first on CreditUnions.com.

Top-Level Takeaways

• Idaho is among the fastest-growing states in the country, and the state’s credit unions are posting huge numbers as a result.

• East Idaho Credit Union’s metrics particularly shine among Gem State cooperatives.

There must be something in the Idaho water, because the state’s credit unions are growing like crazy. At second quarter 2021, the 31 Gem State credit unions rank second among all states in asset growth, first in share growth, and second in loan growth: this, from a state of less than 2 million, the 38th most populated in the United States.

The recent 2020 U.S. Census data shows that Idaho grewts population at the second-fastest rate of any state in the past decade. And since the start of the COVID-19 pandemic, Idaho has one of the fastest population jumps as many workers traded big city life for a more rural experience.

But while an increase in population provides the industry with more opportunities to serve members, credit unions still need the right products and services to start and build relationships.

One Idaho credit union that has certainly done that in recent years is East Idaho Credit Union ($462.5M, Idaho Falls, ID). At second quarter, the state’s sixth-largest cooperative ranks third in asset growth, third in share growth, and first in loan growth, at a blistering 53.5%, all without mergers. But that’s no surprise to the credit union, which has been serving east Idahoand more recently, most of the state outside of the northern panhandlesince 1935.

We’ve been deeply embedded in the different communities we serve for a long time, says Steven Foster, the credit union’s vice president of marketing. We serve everyone, from nurses and construction workers to engineers and potato farmers.

East Idaho’s Growth Rates

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Asset Growth For All Idaho Credit Unions | Data As Of 06.30.21

In the past two years, East Idaho has added approximately $165 million in assets to its balance sheet, resulting in one of the fastest growth rates among all Gem State cooperatives.

Share Growth For All Idaho Credit Unions | Data As Of 06.30.21

While share growth has spiked industrywide due to changing economic conditions from the pandemic, East Idaho’s performance bests state average by more than six percentage points.

Loan Growth For All Idaho Credit Unions | Data As Of 06.30.21

While Idaho credit unions have maintained loan growth over the past five years, East Idaho’s has spiked in the past year as it added a new department and new products to meet the needs of its communities.

Moving To Idaho

Idaho Falls is the fourth-largest city in Idaho, and the largest in the eastern part of the state, a region that is primarily agricultural, Foster says, with a large number of potato farmers and cattle ranchers. Of the credit union’s 11 branches, all but four are located outside the Idaho Falls area.

But Idaho is also a favorite for folks who enjoy leisure and recreation, whether camping, hiking, fishing, or just enjoying natural wonders.

In recent years people have started to realize how beautiful and scenic Idaho is, which is why we’ve seen an influx in population, Foster says.

And the growth has been geographically diverse, too. In 2000, only four cities in the state had populations greater than 50,000; now there are eight. And while, according to Foster, the credit union’s digital channels effectively serve members, East Idaho does have plans to build additional branches in areas outside Idaho Falls that are gaining population. Already, however, the credit union has locations in Challis and Salmonboth cities on the edge of a large national forest and known for camping and fishing.

Our digital channels can handle 99% of what they need, but we think it’s important to maintain that physical connection, Foster says.

With more population comes different product and service needs, Foster says. And while there have been calls by members for some products, the pandemic accelerated several changes at the credit union that have paid big dividends.

Turning Lemons Into Lemonade

Despite pandemic-related challenges, East Idaho has seen a number of small businesses sprout up in the past 18 months. And while in the past members have asked the credit union for business services, Foster says, East Idaho was able to launch its program in the early stages of the pandemic.

We had been developing this team for some time before the pandemic, Foster says. The two things just happened to coincide.

East Idaho built its business department from scratch, hiring local lenders and account specialists to jump-start a side of the balance sheet that had previously been unused. At first quarter 2020, East Idaho added its first $130,000 in commercial balances; a year later, that portfolio now holds $14.4 million. This despite not participating in the SBA’s Paycheck Protection Program.

We were looking to serve the needs in our communities that already existed, Foster says. We just happened to turn lemons into lemonade along the way.

We were looking to serve the needs in our communities that already existed. We just happened to turn lemons into lemonade along the way.

In addition to products and services, East Idaho offers small businesses resources such as digital marketing, financial accounting, and access to East Idaho’s own C-level team to leverage their expertise.

We frequently find that small business owners are really good at building their widget, Foster says. But they may not be as attuned to the finer points of running a business. We’ve found that our bread and butter is offering all the things that help these businesses grow.

Beyond its new business services, East Idaho launched two additional loan products that have helped its portfolio grow in recent months.

The first, RV loans, were a no-brainer, Foster says. Especially in a part of the country where camping and outdoor activities are common. East Idaho introduced a traditional RV loan , as well as a small RV loan that is designed for ATVs, snowmobiles, jet skis, and horse trailers. The second is an energy defense loan that provides funds for homeowners to make energy efficient improvements to their homes, from windows and doors to roofing upgrades and furnaces.

Expanded offerings paired with all this pent-up demand for these items is really why you see exponential growth in our loan portfolio, Foster says.

Growing In The Years Ahead

On the deposits side, East Idaho has also experienced significant growth. But unlike its loan counterpart, the secret here is not so much new productsthough business accounts have certainly helpedbut conversations between employees and members on how to approach their finances.

One of the things that has resonated with members in the past 18 months is the fact that we’re willing to interact with them in whatever channel they want while also providing the service they need, Foster says. That means both in branch and through its digital channels.

CU QUICK FACTS

East Idaho Credit Union
DATA AS OF 06.30.21

HQ: Idaho Falls, ID
ASSETS: $462.5M
MEMBERS: 37,445
BRANCHES: 10
12-MO SHARE GROWTH: 33.4%
12-MO LOAN GROWTH: 53.5%
ROA: 0.55%

Our employees are ultimately the ones who drive share growth by engaging with our members in positive ways. They love to work with them, the marketing VP says.

And don’t just take his word for it. In 2018, 2019, and 2021 EastIdaho was declared the best place to work in Idaho (it came in second in 2020), a reflection of the credit union’s carefully curated culture. Foster describes East Idaho as a casual, fun workplace where people feel comfortable expressing thoughts and opinions. That ethos is important for employees and makes the credit union a happier, more productive place to work.

I think the openness and the diversity of opinion in our organization really allows us to set a robust strategic direction and organizational goals, Foster says. It strengthens us.

With growth, however, comes opportunity, and East Idaho is now challenged with taking the next step forward after 18 months of growth. And while the credit union isn’t exactly sure where this growth will lead, it knows it must further invest in the development of its employees, its products, and its technologies, as well as vetting new possibilities along the way.

All these opportunities, however, must tie back into one thing, Foster says: taking care of the member.

All these opportunities, however, must tie back into one thing, Foster says: taking care of the member.

Growth can be detrimental to what you become as an organization, he says. But as long as every conversation begins with how we can take care of our members and enable them to do things today they couldn’t do yesterday, everything is on the table.

The post 1 New Department. 3 New Products. 50% Loan Growth. appeared first on CreditUnions.com.

Since the Paycheck Protection Programs inception, 5,467 lenders have approved nearly 12 million loans worth approximately $800 billion. In the programs first three weeks alone when uncertainty was high and loan approvals critical businesses borrowed $342 billion, according to data from the U.S. Small Business Administration, the entity that implemented the program. Processing that volume wasnt easy.

Jeffrey Cascione, SVP Director of Commercial Banking, Navigant Credit Union

Round one approvals were particularly challenging as they were all via email or paper applications, says Jeffrey Cascione, senior vice president and director of commercial banking at Navigant Credit Union ($2.9B, Smithfield, RI). Our teams did a fantastic job working extra hours, coming in early, leaving late, and working weekends.

Across 2020, Navigant made 1,226 PPP loans totaling approximately $83 million.

Lance Hatzenbeller, senior vice president and director of commercial services at Idaho Central Credit Union, says his team, facing similar pressures, put up an online application portal.

Our ultimate goal during the first round was to help as many members and Idahoans as we could while money was available in the program, he says. There were many long days and nights securing PPP funds for our members.

The big Idaho credit union approved more than 4,000 applications in 2020. Like Navigant, that was the most in its state.

But things have changed in the months since that initial flurry of activity. Economies have reopened and business operations have rebounded. Now, the bills on these government-guaranteed loans are coming due.

PPP Applications

The deadline for business owners and approved borrowers to apply for PPP funds was Aug. 8, 2020. The program reopened again on Jan. 11, 2021. On May 31, 2021, the program ended. The government has not indicated it will provide further funding rounds.

A Complicated Program

The Paycheck Protection Program rollout prompted immediate action from credit union auditors.

Any time a program that large gets rolled out that quickly, you have to understand the risks, says Chad Garber, a partner at BKD. Whether thats something not handled properly or additional guidance thats provided after the program is underway.

Chad Garber, Partner, BKD

The credit union industry approved billions of dollars in PPP loans to help its members and communities keep their businesses afloat and their employees compensated. In 2020, 719 credit unions with assets less than $1 billion made $3.1 billion in PPP loans, according to the SBA; the 2021 data is more complete, showing 859 credit unions of all sizes made loans totaling $5.6 billion.

It was a stressful but rewarding time as we assisted so many current and new members, Navigants Cascione says.

But the rollout of PPP was complex, and there were complications. There still are.

PPP lenders had to be SBA-approved. For some credit unions, this represented their first time making these loans, which introduced inexperienced lenders to the complications of government programs.

The biggest challenge when dealing with government-guaranteed loans is to have everything in order, says Bryan Mogensen, a principal at CliftonLarsonAllen. You dot your Is, cross your Ts, and follow the instructions exactly.

For a program as large as the PPP, this was no small task.

Lance Hatzenbeller, SVP Director of Commercial Services, Idaho Central Credit Union

Navigant and Idaho Central leaned heavily on their local SBA offices and SBA.gov for information. Navigant says the National Association of Government Guaranteed Lenders also was a trusted resource, whereas Idaho Central looked to the Coleman Reports.

Understanding eligibility requirements, loan amount calculations, loan terms, loan forgiveness, and more impelled leading auditors to create educational materials for their clients. Things were happening fast, and auditors provided what expertise they could.

BKD created a COVID-19 resource center on its website that included articles, webinars, and other resources for credit unions and its own employees on PPP guidelines.

We were all digesting information as fast as it was coming in, says BKDs Garber. It was the most conference calls Ive ever participated in.

We were all digesting information as fast as it was coming in. It was the most conference calls Ive ever participated in.

Still, the speed at which applications came in remained a challenge. The long hours spent processing requests opened the door for employee burnout and even fraud. CLAs Mogensen heard stories about applicants creating fake businesses. Additionally, some businesses were applying for loans across dozens of financial institutions in an effort to ensure they received a loan.

Financial considerations posed risks as well. From interest rate risks, balance sheet accounting, and the actual forgiveness portion of the process, the Paycheck Protection Program has remained top of mind throughout 2021.

Accounting For The Risks

When approving PPP loans, credit unions had to consider how to account for them.

The SBAs Paycheck Protection Program loans had an interest-bearing component, a flat 1% no matter the size. But the SBA also paid lenders an upfront processing fee based on the loan amount, although the percentages changed as volumes changed.

Initially, the SBA offered lenders:

• 5% for loans $350,000 or less.
• 3% for loans more than $350,000 and less than $2,000,000.
• 1% for loans at least $2,000,000.

For second draw PPP loans, the allocation changed to:

• 50% or $2,500 (whichever is less) for loans $50,000 or less.
• 5% for loans more than $50,000 and less than $350,000.
• 3% for loans at least $350,000.

Most credit unions, including Navigant and Idaho Central, accounted for the loan itself in similar ways. Cascione at Navigant says the credit union accounted for them as regular loans but coded them as PPP for tracking purposes. Hatzenbeller says Idaho Central also assigned these loans their own product code but rolled them into its commercial portfolio.

Im Just A PPP Loan

Most credit unions assigned PPP loans a specific product code but rolled them into their loan portfolio. When the credit union submits the application for forgiveness to the SBA, it should reclassify those loans as an accounts receivable until it receives the money from the SBA.

In general, we advised clients to account for these loans no different from any other loans on their balance sheet, says Andrew Quinnette, senior manager at BKD.

How to account for the fees was another matter.

The biggest issue was how to record those fees, Quinnette says.

Andrew Quinnette, Senior Manager, BKD

In principle, the income was meant to be deferred over the life of the loan, Mogensen at CLA says. But how long is that?

The credit unions Mogensen worked with initially thought they would be paid back within three to six months, certainly by the end of 2020. Rather than amortizing those dollars over a number of years and then recognizing the full fee amount the date the loan was forgiven, many chose to record those fee dollars as income from the start. That wasnt wrong, per se, but it might complicate the next audit.

We have to determine if it was material or not from an audit standpoint, Mogensen says. If it was and they booked it all upfront we have to say, you should have deferred it and it could cause an audit adjustment or even a modified opinion because you werent following GAAP.

Forgive Us Our Cents

Borrowers and lenders should refer to the SBA to determine eligibility for forgiveness. Broadly speaking, however, when a loan is 100% forgiven by the SBA, the credit union removes the receivable, stops collecting interest, and recognizes its deferred fees. What about for loans that arent 100% forgiven? Technically, the borrower would owe you the amount thats not forgiven, says CLAs Mogensen.

Thats for loans a credit union knows were or were not forgiven, but the SBA is still providing loan forgiveness and potentially one-third of applications for forgiveness are still outstanding.

According to the SBAs latest data, current as of May 2021, it has received 3.5 million applications for forgiveness out of the 5.2 million loans approved in 2020. The remaining 1.7 million loans total $160 billion, less than $100,000 a loan on average. There is no final due date for applications for forgiveness, though borrowers must apply before their loan matures, but longer wait periods open up lenders to interest rate risk and liquidity concerns, however minor. Some credit unions are participating out these loans to reduce that risk.

Bryan Mogensen, Principal, CliftonLarsonAllen

Most credit unions currently have plenty of liquidity, but the forgiveness of the PPP loans is making it more challenging to manage, says BKDs Garber. Its hard to know how much, if any, of the PPP loan will be forgiven each month.

At Navigant, two-thirds of its 2020 PPP loans have been forgiven, but the process is ongoing, and the next step for many credit unions will be connecting with their members and encouraging them to apply for it.

Were working with our members to get their loans fully forgiven, Navigants Cascione says. Thats our main focus.

Its forgivable money but its also a loan on which payments will be due if forgiveness is not requested. Youd like to believe that most of them want to get it forgiven and paid off.

Auditors like BKD and CLA have introduced forgiveness application technologies of their own, taking some burden off credit unions willing to outsource that part of the process. And the SBA itself has worked to make the process easier for the smallest borrowers, allowing those with loans $150,000 or less to submit a single, one-page form. Now that the second PPP period is over, too, CLAs Mogensen is optimistic the SBAs processing times will improve as the agency shifts into forgiveness mode.

In fact, both auditors agree that most loans that qualify for forgiveness will be forgiven by the end of 2021 as long as the borrowers submit their applications. But credit unions must continue their work contacting members to get the process started; ultimately, requesting forgiveness is the most important part.

Its forgivable money, but its also a loan on which payments will be due if forgiveness is not requested, Mogensen says. Youd like to believe most of them want it forgiven and paid off.

The post Where Do PPP Loans Fit In The Credit Union Balance Sheet? appeared first on CreditUnions.com.

• Shuttered lobbies have forced members to adopt video channels that provide virtual service through a physical smartphone or computer.

• Many credit union professionals predict members will continue to use these channels even after lobbies reopen; many are looking for ways to solidify that paradigm shift.

Virtual tellers are serving members with a smile, be it via stand-alone machines or handheld smartphones.

Shuttered lobbies have forced members into drive-thru teller lines and onto digital channels like mobile apps and online banking. Also surging is the use of interactive teller machines and their successor, mobile apps that provide a live teller experience.

Not on the forefront of this technological revolution? No worries, Pioneer FCU, Idaho Central, and Y-12 FCU offer best practices and lessons learned from their experience as early adopters.

Each has a different strategy for video technology. Pioneer uses both a video mobile app and ITMs. Idaho Central does it all with the app and no ITMs. Y-12, on the other hand, is all ITMs. But all three have shared the common experience of a huge surgein contactless banking as the pandemic shut down their lobbies. Here, they share some of that experience.

Pioneer: Using Two Platforms With One Goal

The COVID-19 resources landing page for Pioneer Federal Credit Union ($499.3M, Mountain Home, ID) includes a link that sends members directly to the institution’s myPioneer Personal Assistant app, where they can talk face to face with a credit union representative.

The video chat app doesn’t include self-service options. Those are on the digital banking platform itself and include check deposits, loan applications, new account openings and more, including answers to many product questions. For help beyondself-service, that’s where the video chat and ITMs come in, providing support for members and non-members alike. That also can include setting up appointments with in-branch experts or transferring calls to them.

Marketing collateral from Pioneer FCU shows how members can take care of finances from the comfort of their home with the credit union’s myPioneer Personal Assistant app.

The shop was an early adopter of ITMs when it rolled them out six years ago. It introduced the mobile teller app in 2017.

Before coronavirus, Pioneer was averaging approximately 30 calls a day through the app. Now, it’s handling closer to 130 with a high of 162, according to Tracey Miller, Pioneer’s vice president of operations. Meanwhile, Pioneer’s fleetof 21 ITMs, including 17 in drive-thrus, are averaging 11,500 visits a month, a number that jumped by 5,620 in March.

The video team members all work at the credit union’s headquarters, joined by branch staff who were trained to help with the increased volume.

‘We’ve since moved most of them back to their regular job duties since we re-opened our lobbies,’ Miller says.

What hasn’t changed are the hours on the video channels. They’ve been Monday to Saturday from 7 a.m. to 7 p.m. since 2017.

At the end of their session, users of Pioneer’s video teller app can provide feedback on their experience.

Miller says feedback solicited at the end of each video teller app interaction shows members are satisfied with the combination of convenience and personal interaction these channels offer, and the credit union predicts a lot of the new users of the technologywill remain on their devices after the pandemic passes. Miller, who’s been at Pioneer for 13 years and in her current position for eight, is optimistic.

‘The behaviors of our members will change,’ she says. ‘Until you need something, you’re not always willing to try something different. The first interaction is the hardest, and a lot of our members have now crossed that obstacle.’

Miller advises being open-minded about what video technology can accomplish. Also, have a strong strategic plan that aligns with mission and vision.

‘The true special sauce,’ she adds, ‘is having amazing employees who are dedicated to helping others and see the video platforms as a way to provide amazing service.’

Idaho Central: All App, All The Time

Idaho Central Credit Union ($5.6B, Chubbuck, ID) has gone all in with its app. The Gem State’s biggest financial cooperative doesn’t have a fleet ofITMs. Instead, it channels traffic through its video chat service ICCU VideoChat that it offers both online and on the phone.

Adding the video app to a 37-branch operation that relies heavily on the face-to-face teller model required more than the flip of a virtual switch. ICCU went all-in to ensure the member experience was as personal as possible, despite a smartphone or computerscreen separating the member from the teller.

We hired dedicated staff and we put them in 20 video booths with professional lighting and backdrops,’ says Corey Dahle, the credit union’s chief experience officer. ‘This is a full-time commitment and investment; we’renot going to use people who do this part-time.

A welcome message on ICCU’s video chat ap invites members to initiate a session. After they do that, a credit union agent is ready to serve the member.

The credit union piloted the program two years ago and fully rolled it out to all members last year. During the pilot, the credit union fielded a dozen or so calls every month. That jumped tenfold to approximately 125 a day after the full launch. Sincethe pandemic started, the credit union has been handling 500 to 650 calls every day predominantly through the mobile app with approximately 60% of those on Apple devices and 40% from Androids.

ICCU hadn’t planned for a pandemic, but its technological heft positioned it to serve members with little disruption. Dahle who’s been with ICCU for 13 years and in his current position for the past five doesn’t see the pivot the credit union has had to make in the face of COVID-19 as wasted energy. Much like Miller at Pioneer, Dahle predicts a permanent change in member behavior one that continues an established trend he’s noted of mobile surpassing any other technology.

‘We are pushing out to our members a fully integrated mobile experience that includes online banking, loan apps, wires, whatever,’ the chief experience says. ‘It’s a branch in their pocket. No matter where they are, they can pusha button and see us face to face and work with someone who has the experience to handle their needs. Our members love that.’

Y-12: All In With ITMs

The video banking experience via ITM at Y-12 Federal Credit Union ($1.3B, Oak Ridge, TN) has been ‘phenomenal’ during the pandemic, says chief experienceofficer Courtland Crouchet.

‘They’ve enabled us to serve members in a safe way that we couldn’t have done otherwise,’ says Crouchet, who came to Y-12 eight months ago after 30 years of executive experience with credit unions in Texas and Louisiana.

A large sign over an ITM in a Y-12 drive-thru shows members where to go. And while members wait, a sign on an easel provides reading material about available services.

Y-12 began installing its ITMs in 2016 and today has 34 of the machines, including 30 in drive-thrus.

‘We originally thought they would be an efficient, cost-savings way of serving members with expanded hours and a centralized group of staffers,’ Crouchet says. ‘They’ve been that but now so much more.’

Before COVID-19 closed down lobbies across Tennessee, members were conducting 1,500 to 2,500 daily transactions via ITMs. Today, that’s jumped to 3,000 to 5,000. The surge has caused some staffing challenges.

Refine your credit unions response to COVID-19 using the Ideas In Action: Pandemic Response page, a hub for all of our articles, webinars, and policies concerning the COVID-19 outbreak.

‘We had 15 contact center agents and used a third party for overflow,’ Crouchet says. ‘When our lobbies closed, we went to more than 80 agents in a week. It took a little work, but we knocked it out fairly quickly and it’sbeen a big success. We’ve even been able to keep call times under a minute with twice the call volume.’

Y-12 has done that by targeting one staffer per ITM, instead of the usual two to three, Crouchet says, and by adding existing staff to the ITM team.

‘There’s significant overlap in the knowledge needed to do both roles,’ he says, although there are differences in systems and communications skills needed to guide members through ITM transactions, especially those who’venever used one before.

‘We quickly covered the differences in phone service versus face to face,’ the Y-12 CXO says of the branch staff turned ITM agents. ‘Our member experience and sales teams also listened to calls and coached the employees daily. Theirskills improved rapidly through this process in a matter of days, although some were uncomfortable at first and we had to help them with this transition.’

Tennessee is among the first states to reopen and as Y-12 prepares to admit members back into its lobbies, preparations include physicalchanges in the lobby as well as rethinking its future.

‘We’re discussing what our new service model will look like,’ Crouchet says. ‘Do we go back to the old way? Or, now that members have made adjustments, do we try to make some things permanent?’

Suppliers See Surge, Too

The largest provider of ITMs in the credit union space predicts a trend for the more than 500 credit unions and banks using its machines.

‘Members that use digital banking or ITMs for the first time will find it was a positive experience and continue to use these channels in the future, says Scott Sykes, executive director for corporate communications at NCR in Atlanta,GA.

Sykes cites data that shows adoption in other fields for example, 54% of first-time online grocery shoppers plan to keep doing it so why not financial services. As for NCR’s own business, Sykes declines to share specifics butsays the company has seen a ‘meaningful’ increase in demand since the pandemic struck.

Sykes did share that overall video call volume is nearly five times what it was before the pandemic. And with lobbies closed, 90% of that volume is coming from mobile and web users versus in-branch video rooms.

NCR bought the ITM business in 2013 from uGenius, whose founder went on to create a new company and the POPi/o mobile app now in use at Pioneer, IdahoCentral and 82 other clients as of April 21.

POPi/o says its client count was 52 at the beginning of March and that company says its overall video call volume is nearly five times what it was before the pandemic, with 90% of them coming from mobile and web users.

‘Our video call mix has shifted dramatically away from in-branch video room calls, which demonstrates the closure of physical branches, a POPi/o spokesman says.

The post Video Banking Comes Of Age In The Time Of COVID-19 appeared first on CreditUnions.com.

• Despite challenges, credit unions found ways to adapt and meet the needs of their current members and local small business owners.

• From funding more loans than any other lender in its state to approving 100% of applications, each of these vastly different-sized institutions had an outsized impact on their local communities.

• All five have seen additional commercial accounts move to the credit union as small businesses recognize and benefit from the relationship-driven cooperative difference.

After analyzing Treasury Department data on the number of jobs saved by credit union lending and publishingan overview of the top cooperative lenders by state and nationally for the Paycheck Protection Program (PPP), we spoke at length with five credit unions of various sizes and geographic regions to learn how the program has helped their institutions strengthen business relationships moving forward.

A History of Serving Small Businesses

One thing all five credit unions have in common is a history of offering business services, specifically loans and deposit accounts.

CU QUICK FACTS

Mountain America Credit Union
Data as of 06.30.20

HQ: Sandy, UT
ASSETS: $11.0B
MEMBERS: 915,673
BRANCHES:97
12-MO SHARE GROWTH: 23.7%
12-MO LOAN GROWTH: 20.3%
ROA: 1.31%

Mountain America Credit Union($11.0B, Sandy, UT) has offered business loans for over 25 years and business deposit accounts since 2002. With roughly 60,000 business members and over 9,000 commercial loans, one of the largest credit union PPP lender notes that they have seen many repeat borrowers over the years.

VyStar Credit Union($9.5B, Jacksonville, FL) has been serving small business for about 10 years, though its specific focus on business lending has calcified in the past five years. Through its concerted efforts, the cooperative’s business loan portfolio has grown from $200 million in 2018 to nearly $800 million today.

Idaho Central Credit Union ($6.0B, Chubbuck, ID) has been offering business loans and services since 2008. Their current portfolio consists of over $800 millionin member business deposits and over $700 million in business loan exposure. The cooperative has more than 20,000 business accounts with a good percentage of those members using Idaho Central as their primary financial institution.

BHCU ($194.2M, Ridley Park, PA) has been offering business services for nearly five years. Their Delaware County field of membership is full of traditional small businessesand the credit union serves approximately 500 of them. Its business members include mom and pop shops, plumbers, electricians, and contractors, businesses that are most likely to be underserved or underbanked by larger financial institutions. Thecooperative provides these members with more than just a loan, as delivering real value for businesses is part of its brand promise.

Platinum Federal Credit Union ($179.2M, Duluth, GA) is a relatively young credit union established twenty years ago to serve the small business community. A highpercentage of their approximately 1,200 business accounts are used as primary checking accounts by retail businesses with heavy cash needs, including local small businesses that sell money orders. This has led the cooperative to partner with armoredservices, offering same day credits and cash pick-ups. Platinum believes these are much-needed services that many banks have eschewed in recent years, providing an opportunity for credit unions.

Addressing Immediate Needs, Overcoming PPP Challenges

It taxed all of us and took courage to be the first to launch, says Mike Turner, CLO for Mountain America. Even without complete information from the Small Business Administration (SBA), the cooperative began using its own application. Inaddition, its leaders reached out internally for reinforcements to handle the volume. Training was quickly rolled out and all areas of the credit union lent support. We rallied the troops and just did it, Turner says. Those troops workedaround the clock for several weeks; knowing that the intense pace would not last forever, MACU also tried to support staff by bringing food in and ensuring breaks were taken along the way.

It was a lot of blood, sweat and tears, says Jenny Vipperman, CLO for VyStar Credit Union. Despite its status as an approved SBA lender, the credit union had never originated an SBA loan prior to PPP’s beginnings. Instead, the cooperative relied on a vendor partner to handle SBA originations and planned to do the same with PPP as all their internal business lending resources were supporting a partnership with the city of Jacksonville. A single day into PPP, however, that partner couldn’t handle the volume and had to shut down. Our chief experience officer, chief information officer, and I got together and decided that we were going to originate these ourselves, says Vipperman. That meant leaders spent nights and weekendsworking with programmers to create a new application process utilizing bots a team of 20 held calls several times a day to make it work. But once the newly developed app was up and running, there was another curveball for the credit union to address: the SBA had shut down the use of bots.

We had a great staff of commercial underwriters, processors, and loan officers that were able to learn the program and get it off the ground fast. As we began to see a flood of applications, we mobilized employees from throughout the organization to assist the commercial team in processing them.

At that point, we had 75 people take on the manual work, says Vipperman. Again, that required working nights to manually enter applications in the SBA’s system, which was crashing during the day. My CEO, myself, so many of uswere doing this because we had to serve our members, she says. This was especially important as some members who applied early on through the credit union’s vendor had to reapply. It wasn’t until current business members and VyStar’s 750,000 retail members were squared away, that the cooperative opened PPP applications to the entire community. We encouraged everyone to apply, whether they had one employee or 500, notes Vipperman. A small-business friendly process whereby applicants picked up a pack through the drive-thru in the afternoon, returned it the following morning, and received funding that same night resulted in 4,500 approvals by mid-June.

For Idaho Central Credit Union, its executive management’s ability to devote time and resources to PPP, along with help from an in-house team, made all the difference. We had a great staff of commercial underwriters, processors, and loan officers that were able to learn the program and get it off the ground fast. As we began to see a flood of applications, we mobilized employees from throughout the organization to assist the commercial team in processing them, says Jarom Campbell, vice president of commercial credit administration at the Gem State cooperative.

CU QUICK FACTS

VyStar Credit Union
Data as of 06.30.20

HQ: Jacksonville, FL
ASSETS: $9.5B
MEMBERS: 721,138
BRANCHES:77
12-MO SHARE GROWTH: 27.2%
12-MO LOAN GROWTH: 20.1%
ROA: 0.79%

To put the PPP volume in perspective, Idaho Central makes approximately 1,300 business loans per year. The cooperative,which made more PPP loans than any other lender in its state,

BHCU was also ready to move quickly with seasoned commercial lenders on staff. We were already in the process of becoming an SBA-approved lender and I’m a commercial guy by trade, says Gary Golden, the credit union’s CEO. His personal experience, along with the expertise of credit officer, Jerry Dorn, allowed the Pennsylvania cooperative to pivot without much difficulty. They also leveraged relationships with other financial service companies, including Member Business Financial Services (MBFS), to get the applications processed quickly.

Platinum FCU’s decision to become an SBA lender in 2020 a process they began in 2019 made for a seamless process and allowed them to quickly jump into the PPP. We were able to email members about PPP before the official launch date because we were already SBA members, says Kabir Laiwalla, Platinum’s CEO. The credit union’s consumer lending manager, chief lending officer, and the CEO himself were able to distribute the work and create a supply chain whereby one person took applications and the others reviewed them and communicated with business members. The Georgia cooperative also made use of third parties such as Leverage and MBFS to assist with the SBA side of the process, allowing Platinum to remain focused on their members. Laiwalla notes that becoming an SBA lender is much easier today than when he first considered it back in 2005. We applied at the beginning of 2020 and got our license and approval in 2-3 days, he says. I highly recommend other credit unions consider it.

Cementing Existing Relationships & Opening The Door To New Ones

CU QUICK FACTS

Idaho Central Credit Union
Data as of 06.30.20

HQ: Chubbuck, ID
ASSETS: $6.0B
MEMBERS: 405,589
BRANCHES:38
12-MO SHARE GROWTH: 33.6%
12-MO LOAN GROWTH: 21.9%
ROA: 1.43%

MACU saw the PPP loans as a clear way to live their mission of being there for members. The cooperative funded 7,000 loans with an average amount of $50,000 for both existing and new members alike. It was rewarding when we received countless emails and letters thanking us for being there when other financial institutions were not, says Turner. And because of that positive experience, many credit unions saw interest from those businesses, who wanted to know more about what their cooperative could offer.

It absolutely helped us bring new business into the fold, says VyStar’s Vipperman. The commercial team has since been reaching out to those who got first-time loans through PPP and already has dozens of businesses interested in refinancing other loans and moving their relationship to the credit union. Overall, 97% of the loans VyStar funded were under $150,000 with a few large loans going to local non-profits. A stark contrast to stories of large chains receiving millions in funding from big banks.

Idaho Central has also received an overwhelming response to their involvement. We have received stories from all over the state about how we were able to help save jobs, help save businesses, and help save Idaho, says Campbell. As one of the first financial institutions in the state to get up and running, word spread like wildfire across the business landscape and non-members began asking for help from the credit union when their banks weren’t up and running. As a result, Idaho Central helped more than 800 new business members secure a PPP loan. Those businesses are now in the process of moving over their entire relationship. We are hearing the same thing from our existing business members, that we stepped up and helped save their business, Campbell says.

We couldn’t have done this with just my lending team, we had representation from every single department who all stepped up and volunteered to help us.

BHCU’s PPP loans were split nearly 50/50 between new members and existing members. We solved a big problem for them, especially those who came to us after getting nowhere with their primary bank, says Golden. For the credit union,this was a huge source of new business and an opportunity to showcase the cooperative difference. After approving every single application, BHCU has found that they not only have new business members, but new retail members joining. When you’re there for someone in a crisis, they remember that, says Golden. He’s seen first-hand business members who are now also moving their personal accounts to BHCU and encouraging family and friends to do the same. While the effort was herculean and involved midnight and 2 a.m. emails responding to members, it was worth it according to the Pennsylvania cooperative. Now, businesses want to hear from BHCU and understand they are an organization built on service and relationships, not just transactions.

Of the more than 500 PPP loans Platinum FCU funded, about 150 were new business members. We had several members who only had personal accounts. We’ve already started working on new SBA loans from those new business member relationships, says Laiwalla. Since the credit union mainly serves smaller businesses, their average loan size was just $25,000 and the smallest loan they funded was $1,200. After processing the first and second waves of PPP, the credit union focused its efforts on educating members to ensure smaller businesses, who may not be used to taking loans at all, clearly understood what they could use the funds for and what they could not.

Lessons Learned, How to Serve Small Businesses In The Future

CU QUICK FACTS

Platinum FCU
Data as of 06.30.20

HQ: Duluth, GA
ASSETS: $179.2M
MEMBERS: 10,032
BRANCHES: 5
12-MO SHARE GROWTH: 52.0%
12-MO LOAN GROWTH: 24.7%
ROA: 1.50%

Despite ongoing economic uncertainty, MACU’s philosophy is still to serve all members, including small businesses. Unlike some institutions who decided to stop making certain types of loans, the Utah-based cooperative is making slight adjustmentsto loan-to-value ratios and looking more closely at potential loans to protect member assets and serve business needs responsibly. We look for ways to make loans, not pull the rug out from under small businesses, says Turner. The abilityto make local decisions and act nimbly are two advantages of working with MACU.

VyStar has always been a conservative lender and is continuing to do their part to protect both members and the institution particularly on the real estate side of its portfolio. We’re focusing on members’ existing loans andmaking sure we work with them on forbearances or modifications to keep them in a good place, says Vipperman. Overall, the PPP experience taught the chief lending officer that no one can go it alone when it comes to meeting immediate memberneeds. We couldn’t have done this with just my lending team, we had representation from every single department who all stepped up and volunteered to help us. The credit union’s philosophy of making what’s importantto the members important to the institution helped clear the way for this proactive assistance. None of this we could have accomplished if people didn’t work together. That’s how all of us are going to get through this, saysVipperman.

Upcoming Webinar: How To Serve Small Business – Insights From Successful PPP Lenders

Join us for a webinar on August 27 at 2:00 p.m. ET to learn how credit unions can help local business owners during their time of need while showcasing the credit union difference.

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For Idaho Central, having a competent business and treasury management team, along with over 10 years of business banking experience and cutting-edge IT resources have been key to success. Business members are worried. We need to be there for themas they navigate this new financial landscape we all find ourselves in, says Campbell. The top in-state PPP lender learned several valuable lessons centered around automation for loan applications, and tweaked their process almost daily withthe IT department as its internal teams searched for ways to do things quicker and more efficiently. This was a game changer for us and allowed us to help even more Idaho small businesses, he says.

BHCU hasn’t made any philosophical changes to their business lending model, but is asking more questions than years past to understand and evaluate new loans. You can’t simply look at 2018 and 2019 performance, especially in industrieslike food service. You need to understand what cash flow looks like today and what the expectations are now, says Golden.

The PPP process, while challenging, validated the ability of credit unions like BHCU to compete with the larger banks and differentiate with small businesses. The way many banks treated smaller businesses some even telling them to comeback in a month to apply for a non-PPP loan proved my point that we’re a good alternative, says Golden. The Pennsylvania cooperative didn’t tell anyone to wait or turn away a single small business for any type of loan request,as it’s simply not in their nature.

CU QUICK FACTS

BHCU
Data as of 06.30.20

HQ: Ridley Park, PA
ASSETS: $194.2M
MEMBERS: 8,298
BRANCHES: 2
12-MO SHARE GROWTH: 22.5%
12-MO LOAN GROWTH: 8.7%
ROA: 0.64%

Platinum FCU is continuing to serve business members, while at the same time beefing up their allowance for loan losses, adopting some of the new self-employed guidelines introduced recently for mortgages into their commercial products, and pausing its$100,000 unsecured line of credit. The SBA commission earned through PPP has helped the credit union increase its loan loss allowance and pay all staff a bonus to thank them for continuing to work through challenging times. While Laiwalla has beenan advocate for credit unions serving small businesses, he sees the national wave to go cashless as a potential disadvantage. If you want to serve retail businesses, you may want to rethink that strategy, he says.

Platinum FCU was formed to help support these types of cash-intensive businesses, but often receives requests from non-members and has difficulty finding other institutions to refer the business. There may be more scrutiny for Bank Secrecy Act(BSA) compliance, but we’re here for the members. We will continue to go above and beyond to serve their needs, Laiwalla says.

Laiwalla notes that many banks are getting out of these types of services and most credit unions were never in that space to begin with, leaving a big gap for retailers and a big opportunity for cooperatives.

There is still plenty of cash and there will continue to be as long as there are unbanked or underbanked consumers.

The post What We Can Learn From Successful PPP Lenders On How To Serve Small Businesses appeared first on CreditUnions.com.

See below for more insights into the leaders in credit union PPP lending.

The post National Leaders In PPP Lending appeared first on CreditUnions.com.

• ISU Credit Union has sharply increased mortgage lending with the help of two loan programs aimed at educators, including one that has an unusual 12.5-year term.

• The credit union has added a third loan to help COVID-19 first responders afford new homes.

Ron Rippee, Lending Manager, Idaho State University Credit Union

The math is simple: 10 plus 15 divided by 2 equals 12.5. And that’s how Idaho State University Credit Union($262.2M, Pocatello, ID) came upwith its Velocity Home Loan.

It’s a 12.5-year, fixed-rate note that fits neatly between the 10-year note that made for a payment just out of reach for many members and the 15-year loan that was longer than some members wanted.

We live in a rural area, and many of our members prefer shorter-term loans, says lending manager Ron Rippee. Our mortgage staff was looking for an out-of-the-box product for them. We hoped this product would give them a payment theycould comfortably handle.

Velocity Home Loan is one of three home mortgage products created specifically for the credit union’s Idaho field of membership which comprises ISU students and alumni, along with many southeastern Idaho school districts and businesses.Another loan is aimed at thanking first responders to the pandemic crisis.

Forever Home. Half The Loan.

That’s a marketing motto for the Velocity Home Loan, which Rippee says has been more popular than the credit union expected.

We’ve closed 165 Velocity mortgages since May 2019, the lending manager says. That’s increased our portfolio by 26.1% in 13 months.

The Velocity name was a creation of marketing manager BJ Fillingame, and the terms are designed to make the credit union stand out in a marketplace where its major competitors are other credit unions.

1ST MORTGAGE GROWTH

FOR ISU Credit Union | DATA AS OF 03.31.20

Callahan & Associates | CreditUnions.com

ISU Credit Union’s first mortgage growth grew after the cooperative introduced its Educator Home Loan in late 2016. Growth surged dramatically after the credit union introduced the Velocity Mortgage in May 2019.

The loans have primarily been for refinancing, and the credit union keeps them in the portfolio. The interest rate is 0.125% below the published Freddie Mac rate for 15-year notes with a minimum cap of 2.75%.

Rippee says the credit union waives all fees except for the drive-by appraisal for refinances, and members pay normal fees for purchase loans. The credit union will approve loan-to-values up to 95%, and the property must be an owner-occupied, primaryresidence. No manufactured or modular houses, condos, or townhouses.

The Educator Home Loan

The Velocity Home Loan follows on the success of the Educator Home Loan, which Rippee says he created in October 2016 to offer an attractive refinance or purchase loan to the cooperative’s SEG while thanking them for their service.

The Educator Home Loan is a conventional loan for anyone who works at an educational institution and is based on Freddie Mac’s published rate. Waived fees include everything except the appraisal, which means approximately $1,500 in savings on a$100,000 loan, Rippee says. Plus, ISU Credit Union makes a $250 donation to the school program of the member’s choice after each closing.

The cooperative has closed 125 of the Educator Home Loans so far, growing its portfolio by 21.7% as a result, according to Rippee.

We’ve also donated $31,250 to various local school programs in our members’ names, the lending manager says. The Education Loan program has been a great success.

ISU Credit Union highlights loan terms and the donation component on its marketing collateral for the Educator Home Loan. To view a larger version, click here.

ISU Credit Union used member feedback to design a loan for educators. The Velocity Home Loan offers a 12.5-year term plus other enticements. To view a larger version, click here.

The credit union took out ad spots in the Boise Weekly to promote the 12.5-year Velocity Home Loan. To view a larger version, clickhere

A Home Loan For Heroes

The Hero Loan is our new product for 2020, Rippee says. With all that’s happening, we wanted to offer a program that would help us say thank you’ to those who serve our communities.

5 Loan Lessons For Serving Educators

Ron Rippee, lending manager at Idaho State University Credit Union, shared five best practices the credit union has discovered while creating and offering mortgage products targeted toward school-heavy SEGs.

• Know your market. This include trends, community needs, and the overall economic stability of your footprint.
• Know your membership. The more you know about who your members are, what their needs are, and their general financial situations, the better you can design mortgage products that directly meet those needs.
• Think outside the box. Everyone offers conventional mortgage loans. What separates your credit union from any other lender?
• Hire the right staff. Lenders must take ownership in their jobs and understand the importance of what they do and the importance of the membership. You can teach the technical part of mortgage lending; it’s harder toteach drive and pride.
• Work with marketing and executives. Marketing has a lot of say in how even great ideas are received. So, work together to be successful. An engaged executive team willing to step outside the box also is vital. The executiveteam at ISU Credit Union was involved in every aspect of the credit union’s new products. That support was imperative.

The Hero Loan goes up to 97% LTV for a purchase note and 95% for a refinance. It is open to anyone in law enforcement, fire departments, EMT personnel, paramedics, nurses, and active military.

This loan has a normal published rate, Rippee says. Once we close this loan, we gift back to the member one-half of their original loan origination fee to thank them for their service to our communities.

ISU Credit Union has closed four Hero Loans and has given back more than $5,000 to those members, Rippee says. And, it’s got many more of the loans in the pipeline.

Giving Back And Becoming A Player

Giving back to its communities and members through innovative loan products has helped ISU Credit Union gain ground in a market that, like many, has been ramped up by record-low rates. Rippee says his shop has grown its portfolio by 36.8% during the past13 months of record volume.

All these new loans coming in have made it a challenge to keep up, he says. In response, the cooperative has added mortgage loan officer and a processor, plus a document closer position.

Rippee himself is a certified underwriter and has taken on some of those duties, further helping loans move through the process more efficiently.

When I started at the credit union in 2014, our mortgage footprint was limited in our FOM, he says. But over the past six years, we’ve grown our footprint and have become a player in our mortgage market.

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The post There’s No Place Like Home With A 12.5-Year Loan appeared first on CreditUnions.com.

Top-Level Takeaways

• Shuttered lobbies have forced members to adopt video channels that provide virtual service through a physical smartphone or computer.
• >Many credit union professionals predict members will continue to use these channels even after lobbies reopen; many are looking for ways to solidify that paradigm shift.

Virtual tellers are serving members with a smile, be it via stand-alone machines or handheld smartphones.

Shuttered lobbies have forced members into drive-thru teller lines and onto digital channels like mobile apps and online banking. Also surging is the use of interactive teller machines and their successor, mobile apps that provide a live teller experience.

Not on the forefront of this technological revolution? No worries, Pioneer FCU, Idaho Central, and Y-12 FCU offer best practices and lessons learned from their experience as early adopters.

Each has a different strategy for video technology. Pioneer uses both a video mobile app and ITMs. Idaho Central does it all with the app and no ITMs. Y-12, on the other hand, is all ITMs. But all three have shared the common experience of a huge surgein contactless banking as the pandemic shut down their lobbies. Here, they share some of that experience.

Pioneer: Using Two Platforms With One Goal

The COVID-19 resources landing page for Pioneer Federal Credit Union ($499.3M, Mountain Home, ID) includes a link that sends members directly to the institution’s myPioneer Personal Assistant app, where they can talk face to face with a credit union representative.

The video chat app doesn’t include self-service options. Those are on the digital banking platform itself and include check deposits, loan applications, new account openings and more, including answers to many product questions. For help beyond self-service, that’s where the video chat and ITMs come in, providing support for members and non-members alike. That also can include setting up appointments with in-branch experts or transferring calls to them.

Marketing collateral from Pioneer FCU shows how members can take care of finances from the comfort of their home with the credit union’s my Pioneer Personal Assistant app.

The shop was an early adopter of ITMs when it rolled them out six years ago. It introduced the mobile teller app in 2017.

Before coronavirus, Pioneer was averaging approximately 30 calls a day through the app. Now, it’s handling closer to 130 with a high of 162, according to Tracey Miller, Pioneer’s vice president of operations. Meanwhile, Pioneer’s fleet of 21 ITMs, including 17 in drive-thrus, are averaging 11,500 visits a month, a number that jumped by 5,620 in March.

The video team members all work at the credit union’s headquarters, joined by branch staff who were trained to help with the increased volume.

We’ve since moved most of them back to their regular job duties since we re-opened our lobbies, Miller says.

What hasn’t changed are the hours on the video channels. They’ve been Monday to Saturday from 7 a.m. to 7 p.m. since 2017.

At the end of their session, users of Pioneer’s video teller app can provide feedback on their experience.

Miller says feedback solicited at the end of each video teller app interaction shows members are satisfied with the combination of convenience and personal interaction these channels offer, and the credit union predicts a lot of the new users of the technology will remain on their devices after the pandemic passes. Miller, who’s been at Pioneer for 13 years and in her current position for eight, is optimistic.

The behaviors of our members will change, she says. Until you need something, you’re not always willing to try something different. The first interaction is the hardest, and a lot of our members have now crossed that obstacle.

Miller advises being open-minded about what video technology can accomplish. Also, have a strong strategic plan that aligns with mission and vision.

The true special sauce, she adds, is having amazing employees who are dedicated to helping others and see the video platforms as a way to provide amazing service.

Idaho Central: All App, All The Time

Idaho Central Credit Union ($5.6B, Chubbuck, ID) has gone all in with its app. The Gem State’s biggest financial cooperative doesn’t have a fleet ofITMs. Instead, it channels traffic through its video chat service ICCU VideoChat that it offers both online and on the phone.

Adding the video app to a 37-branch operation that relies heavily on the face-to-face teller model required more than the flip of a virtual switch. ICCU went all-in to ensure the member experience was as personal as possible, despite a smartphone or computer screen separating the member from the teller.

We hired dedicated staff and we put them in 20 video booths with professional lighting and backdrops, says Corey Dahle, the credit union’s chief experience officer. This is a full-time commitment and investment; we’re not going to use people who do this part-time.

A welcome message on ICCU’s video chat app invites members to initiate a session. After they do that, a credit union agent is ready to serve the member.

The credit union piloted the program two years ago and fully rolled it out to all members last year. During the pilot, the credit union fielded a dozen or so calls every month. That jumped tenfold to approximately 125 a day after the full launch. Since the pandemic started, the credit union has been handling 500 to 650 calls every day predominantly through the mobile app with approximately 60% of those on Apple devices and 40% from Androids.

ICCU hadn’t planned for a pandemic, but its technological heft positioned it to serve members with little disruption. Dahle who’s been with ICCU for 13 years and in his current position for the past five doesn’t see the pivot the credit union has had to make in the face of COVID-19 as wasted energy. Much like Miller at Pioneer, Dahle predicts a permanent change in member behavior one that continues an established trend he’s noted of mobile surpassing any other technology.

We are pushing out to our members a fully integrated mobile experience that includes online banking, loan apps, wires, whatever, the chief experience says. It’s a branch in their pocket. No matter where they are, they can push a button and see us face to face and work with someone who has the experience to handle their needs. Our members love that.

Y-12: All In With ITMs

The video banking experience via ITM at Y-12 Federal Credit Union ($1.3B, Oak Ridge, TN) has been phenomenal during the pandemic, says chief experienceofficer Courtland Crouchet.

They’ve enabled us to serve members in a safe way that we couldn’t have done otherwise, says Crouchet, who came to Y-12 eight months ago after 30 years of executive experience with credit unions in Texas and Louisiana.

A large sign over an ITM in a Y-12 drive-thru shows members where to go. And while members wait, a sign on an easel provides reading material about available services.

Y-12 began installing its ITMs in 2016 and today has 34 of the machines, including 30 in drive-thrus.

We originally thought they would be an efficient, cost-savings way of serving members with expanded hours and a centralized group of staffers, Crouchet says. They’ve been that but now so much more.

Before COVID-19 closed down lobbies across Tennessee, members were conducting 1,500 to 2,500 daily transactions via ITMs. Today, that’s jumped to 3,000 to 5,000. The surge has caused some staffing challenges.

Refine your credit union’s response to COVID-19 using the Ideas In Action: Pandemic Response page, a hub for all of our articles, webinars, and policies concerning the COVID-19 outbreak.

We had 15 contact center agents and used a third party for overflow, Crouchet says. When our lobbies closed, we went to more than 80 agents in a week. It took a little work, but we knocked it out fairly quickly and it’s been a big success. We’ve even been able to keep call times under a minute with twice the call volume.

Y-12 has done that by targeting one staffer per ITM, instead of the usual two to three, Crouchet says, and by adding existing staff to the ITM team.

There’s significant overlap in the knowledge needed to do both roles, he says, although there are differences in systems and communications skills needed to guide members through ITM transactions, especially those who’ve never used one before.

We quickly covered the differences in phone service versus face to face, the Y-12 CXO says of the branch staff turned ITM agents. Our member experience and sales teams also listened to calls and coached the employees daily. Their skills improved rapidly through this process in a matter of days, although some were uncomfortable at first and we had to help them with this transition.

Tennessee is among the first states to reopen and as Y-12 prepares to admit members back into its lobbies, preparations include physical changes in the lobby as well as rethinking its future.

We’re discussing what our new service model will look like, Crouchet says. Do we go back to the old way? Or, now that members have made adjustments, do we try to make some things permanent?

Suppliers See Surge, Too

The largest provider of ITMs in the credit union space predicts a trend for the more than 500 credit unions and banks using its machines.

Members that use digital banking or ITMs for the first time will find it was a positive experience and continue to use these channels in the future, says Scott Sykes, executive director for corporate communications at NCR in Atlanta, GA.

Sykes cites data that shows adoption in other fields for example, 54% of first-time online grocery shoppers plan to keep doing it so why not financial services. As for NCR’s own business, Sykes declines to share specifics but says the company has seen a meaningful increase in demand since the pandemic struck.

Sykes did share that overall video call volume is nearly five times what it was before the pandemic. And with lobbies closed, 90% of that volume is coming from mobile and web users versus in-branch video rooms.

NCR bought the ITM business in 2013 from uGenius, whose founder went on to create a new company and the POPi/o mobile app now in use at Pioneer, Idaho Central and 82 other clients as of April 21.

POPi/o says its client count was 52 at the beginning of March and that company says its overall video call volume is nearly five times what it was before the pandemic, with 90% of them coming from mobile and web users.

Our video call mix has shifted dramatically away from in-branch video room calls, which demonstrates the closure of physical branches, a POPi/o spokesman says.

The post Video Banking Comes Of Age In The Time Of COVID-19 appeared first on CreditUnions.com.

Top-Level Takeaways

• Branch profitability, location, demographics, and a deep understanding of the rural communities it serves all drive placement and expansion decisions for East Idaho Credit Union.

• In one community, East Idaho’s branch has been the only banking center in town since the 1970s.

Celebrating its 85 anniversary, community-chartered East Idaho Credit Union ($309.6M, Idaho Falls, ID) serves more than 33,000 members across cities and towns that trace their heritage back to Old West wagon trails and river crossings.

The credit union is based in Idaho Falls, the state’s second-largest city boasting a metropolitan area population of 145,000, and from there operates nine branches serving a wide area. Its footprint encompasses urban and suburban cities along the Interstate 15-U.S. 20 corridor as well as remote towns in central-northern Idaho. In Arco, population 880, East Idaho is the only financial institution for miles. The credit union’s most remote branch is in Salmon, population 3,108, which is located more than 150 miles north of headquarters.

Across America, rural banks have been closing, driven in part by the growing use of mobile and digital banking services. Banks closed branches in rural counties at a rate of 14% between 2012 and 2017, with poor communities seeing a 50% decline in branches. In many towns, the loss of a branch means fewer visitors and less commerce.

Chris Cardwell, CFO, East Idaho Credit Union

East Idaho, however, is bucking that trend with an ongoing branch renewal and expansion program. In 2018, the credit union relocated a branch in Challis, population 1,088. It is opening a replacement branch in Rexburg, population 28,337, in April. And, it is set to break ground on a new branch in Pocatello, population 55,193, this spring.

According to Chris Cardwell, CFO of East Idaho, these capital decisions came down to branch profitability, location and demographic factors, and a deep understanding of the rural communities that rely on the credit union’s branch services.

We look at all of the dynamics of serving membership, Cardwell says. Certainly, digital is important to us, and as technology changes and we see more innovation, digital and remote access will be more and more important. But, I don’t think brick-and-mortar walk-in traffic is ever going to go away completely.

East Idaho’s service area stretches across fast-growing areas between Idaho Falls, the western entrance of Yellowstone National Park, and the rural farming communities of central Idaho. Although Idaho is ranked 39th in total population, it has been among the top 10 fastest-growing states since 2015, with Forbes naming Boise the nation’s fastest-growing area in 2018.

Serving Underserved Communities

East Idaho has acquired several smaller credit unions, and their branches, over the years and is committed to providing services to underserved areas, Cardwell says. Some of the credit union’s rural branches are staples in these small towns. The branch in Arco, which East Idaho remodeled in 2012, dates back to the 1970s and is the only banking center in town.

The Old West is engrained in the rural communities of central and eastern Idaho.

Located approximately 20 miles from the Idaho National Laboratory nuclear research center, Arco is best known as the world’s first city to be lit by nuclear power. Although the town’s population’s is only 880, more than 2,000 members use the branch. Members, including one of the credit union’s own board members, drive 30 miles or more to visit it.

These are small communities, Cardwell say. Our employees know the community members very well, so it’s more of a personal relationship. Oftentimes, members have digital and online banking but still come in and deposit full cashouts.

Branch Profitability And Lending

The credit union’s branch in Challis, a farming community between the Salmon River and rows of mountains ranges and national forest, dates back to 1985. It was operating in a rented space in a grocery store, but when East Idaho purchased land for a new branch, converting the lease to a capital asset made sense, Cardwell adds.

The credit union evaluates capital investments with a branch profitability model that considers the number of members using the branch, members’ savings and borrowing profiles, loan interest, interchange income, and fees. Looking at the ratio of savings-to-loans at each branch, Challis had a good track record of savings and was only 25% loaned out, compared with other branches in the east that were 100% loaned out.

That particular demographic has more savers than borrowers, Cardwell says. So, the extra deposit dollars there contribute to the funding of loans in other branches that are entirely loaned out.

Construction of the new branch included a groundbreaking with the Town Council and open house for the community.

It indicated to the community that we have a greater vested interest, the CFO says. We’re here to stay.

New Branch Design, New Locations

An update of the credit union’s brand provided the impetus to renew the look and feel of the branches, beginning six years ago with a major remodel of the main branch in Idaho Falls. The green and yellow logo, accented with a mountain skyline, is prominently displayed in the new branch design.

Like the Challis branch, the new branches in Rexburg and Pocatello are smaller in size, with three offices, cash machines, and a vault.

Those branches are almost identical in size and look and feel, Cardwell says. We are of the philosophy that you build smaller branches, and, if warranted, you put another branch in another location in the same city.

East Idaho is replicating a new design across its new branches.

Location is key. For example, the old branch in Rexburg was built 20 years ago near doctors’ offices south of town. The new branch is located just down the street from a Wal-Mart on the north side, which has significantly more retail traffic.

Most often, financial services are not a destination, Cardwell says. So, we need to make that brick-and-mortar more convenient to other businesses.

Launchpad For New Services

East Idaho’s branch network is also serving as a launchpad for additional services. For example, the credit union’s wealth management division uses the branches to schedule meetings with members to discuss investment services and retirement planning.

We want to manage the whole book of business for a member, Cardwell says.

As such, the credit union has plans to launch new business lending services. It is working with a third-party underwriter and gaining in-house expertise to launch business loans, which will compete with local banks for farm and cattle loans.

It will give us more diversification in our loan types, the CFO says. And we will be investing in a business that supports a significant part of the community.

Supporting The Community

Community support is another key success factor for East Idaho, which was awarded the Dora Maxwell Award for community service from the Credit Union National Association.

According to Cardwell, the credit union supports several high-profile charities. It hosts an annual golf tournament for Kicks for Kids and places empty water jugs in area schools between Thanksgiving and Christmas every year so students can donate their spare change to help purchase shoes for kids who need them. Last year, the program raised $49,560.

We have put thousands of shoes on kids’ feet through charitable donations, Cardwell says.

Planning For The Future

Although Pocatello will be East Idaho first new branch in years, Cardwell says the credit union will continue to look for new opportunities for expansion. The ideal expectation for return on investment, he said, is three to five years.

That’s when we’d like to be at a break-even standpoint, the CFO says. And, obviously, we want to look at the growth potential from then on.

Cardwell says he recently reviewed the statistics on credit union growth in Idaho, and noted that nearly every credit union in the state, regardless of size, has recently added a branch. That’s good for the residents of Idaho looking for a trustworthy FI.

There are e-financial services institutions out there with no brick-and-mortar that will supposedly give you a higher rate, but the trust factor is still not there with the population at large, Cardwell says. Financial institutions are here to stay. We need to keep abreast of innovative technologies, but we also need to focus on the needs of everyone on the planet.

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