WABASH, Ind. — Farmers here in the Corn Belt have found it tough to get ag loans from many banks as the recession has worn on.
But thanks in part to an upgraded core solution and an understanding of its ag community membership, Beacon Credit Union here is able to provide much larger volume of agricultural loans to those who need it the most.
The $642-million credit union's move to utilize Open Solutions' The Complete Credit Union Solution: DNA earned it the distinction of Best Practice in Supporting Needs of a Unique Memberhsip.
In the past 18 months, Beacon has grown its agricultural loan portfolio by nearly $60-million, growth not only critical for farmers but for the credit union itself. More than two-thirds of Beacon's $481 million in loans are agricultural and commercial.
"It is our bread and butter, that's what we were founded on in 1931," explained VP-Commercial Lending Todd Beehler. "We were founded by a group of area farmers who were trying to combat the Great Depression and provide financial services to one another."
Because of their unique structure, agricultural loans were difficult to process in the typical core solution that is centered on consumer and auto loans. Open Solutions' system, conversely, is based in the commercial banking world and re-designed for the cooperative industry-the new flexibility and capacity means Beacon CU can process more loans in more ways.
"When we get in more complex transactions where we may be looking to be a lot more creative with the structure and repayment schedules, those traditional platforms were like trying to fit a square peg into a round hole," Beehler said. "With agriculture a lot of repayment needs to be done seasonally based on when the farmer would market and sell the grain or livestock or whatever their commodity is. You want to fit the repayment into their seasonal cash flow. You may have principal due at one point in the year, but have the interest serviced more frequently. Just the ability to put principle and interest repayment is very challenging on a typical platform, but is very easy on an Open Solutions platform."
Aside from cutting down the amount of time it takes to process a new loan, the new platform also gives Beacon the ability to list and track the loans and collateral better and process payment more rapidly as well. With the core processor doing the bulk of the work, Beacon staffers have more time to cultivate relationships with members-a hugely critical part of their mission, especially in rough economic times.
"In today's harsh economic environment, many financial institutions have been greatly impacted, but Beacon Credit Union continues to flourish by staying true to their business and member base and investing in the right technologies to stay ahead of the curve," Open Solution's EVP-North America Ross Curtis told Credit Union Journal.
Best Practices CUJ 2009
CU: Beacon
Best Practice: Meeting Unique Lending Needs
Vendor: Open Solutions
