NEW ORLEANS-One executive contends credit unions face a new lending environment that requires new skill sets and attitudes.
Bill Vogeney, SVP at the $3.1-billion Ent FCU in Colorado Springs, Colo., observed that a lot of CUs are "in a state of shock. We worked through a couple years during which we were solely focused on risk management and people forgot how to make loans. Now we are back in the mode of having to make loans, but making loans today is a lot different than making loans when the economy was humming."
Compliance demands a lot of time, which is preventing many credit unions from carefully targeting loan programs, something necessary in an environment in which consumers are deleveraging. But the other big issue, according to Vogeney, who spoke with Credit Union Journal during CUNA Lending Council's 2011 Annual Conference here, is credit unions need to expand their reach to B and C paper now, yet they may not have all the expertise they need.
"We are working to do more B and C loans and we know we have to get better on the collections side," said Vogeney, vice chair of the CUNA Lending Council. "But most of our loan people at our centers are not experienced at making a lot of these types of loans. So we are building the core skill sets for B and C lending because it is different than lending to A and B members."
For example, when Ent lends to members with A and A-plus credit, rarely does it verify income. "Only when you start to get to the lower credit tiers do you have to verify income, and lot of our people do not know how to accurately read a pay stub with all the deductions and what not, and tax returns for the self-employed. It is a different skill set," Vogeney explained.
