MADISON, Wis.-Credit unions looking to boost business lending should target more than just the businesses banks are turning down-they should also snap up the experienced lenders those same banks are letting go.
Starting a business lending program or ramping up current commercial activity may be the best way to beef up the bottom line in 2010, especially if the MBL cap is raised, notes one person. However, it's going to take a great deal of preparation by the credit union to capitalize on the opportunity without adding inordinate risk, according to Fred Johnson.
The key, the CUES president said, is having the skilled people on staff to not only make the right loans, but to also keep up with heavy-handed regulators who will be watching business lending closely.
"One of the heads of the state banking associations said state regulators are making it so hard on the banks that they can't make business loans," said Johnson, who noted that while this is an opportunity for CUs, that same type of scrutiny could easily befall credit unions. "It's sort of like the government talking out of both sides of their mouth. On one hand they want to increase lending, and then on the other they make it hard to do so."
Johnson believes there are a great number of talented business lending officers available for hire. "As a result of the banks' problems, there are so many people on the market who have the skill sets credit unions need. These people have been extensively trained. I know one bank that would not allow a business loan officer to sit down with a borrower until they completed six months of training."
