City-County Using Old-Fashioned Personnel To Drive Lending Volume
Eighteen-plus loan officers for a $300-million credit union may seem like a lot to many, but one CU here says it's just right as it bids to maximize lending relationships.
City County FCU is using old-fashioned face-time and new loan products like credit card consolidation to go beyond the normal credit union lending recipe of first mortgage, home equity, VISA, and car loans.
"We will consolidate your credit card debts, unsecured, five-year maturity, at approximately 12% depending on the program, no maximum," said Jack Flatley, senior vice president of lending. "Those numbers can sometimes get to $30,000, $40,000, $50,000. There's really nobody else who wants to do that sort of thing."
Of course the member must be in good standing and qualify for the program, but there is no lack of members meeting the criteria, according to Flatley, who said it's all about the member relationship and saving money. "When the member sits down you are basically doing a financial review of their situation," he continued. "You've got to have a lot of people so each loan officer has the time to do that sort of thing."
The result is a steady 15% growth in the loan department year after year, Flatley said. The credit union's return on assets is above 1% and its capital-to-asset ratio is more than 8%. The goal is to be 100% loaned out and for the past 10 years the credit union has maintained a minimum of 93% loans-to-asset ratio.
Flatley said CCFCU rejects electronic credit scoring and minimal call center-type interaction, preferring a full staff of experienced financial advisors, even though the expense involved runs counter to the direction many lenders have gone.
"Banks are a good example," Flatley observed. "It's called centralized lending here in Minnesota, where everything is faxed over to some God-like figure who makes all the decisions. Or it's all electronic-based on credit scoring-risk-based pricing, risk-based lending."
CCFCU loan officers have full approval authority and do not refer to credit committees. To achieve consistency without stifling creativity, the loan officers use underwriting work sheets.
"If someone comes in for a checking account, you show them they have a car loan elsewhere that would be better to have here to save them money, and what about a VISA," Flatley related. "The loan officers don't have to go to different people to get an authorization. It's all there."
No Trick To It
And that's the key: having the time to sit down with members and talk about their options and make it easy to convert other loan programs to the credit union, Flatley continued. "There is no magic or trick to it. Just spend more money to get a quality of loan officer who can develop relationships with members for three and four accounts as opposed to one or two."
One CCFCU product is called Users Credit. The cash back program pays members based on the amount of interest paid on loans or earned on shares at the credit union that is calculated electronically and paid out at the end of the year.
"The crux of the whole thing is when you are sitting with the member saying why don't you move you car loan over here and we'll give you some of you interest back," he explained. "You give your loan officer the experience and the authority to make the decisions and you give the tools to help them show the member the way."