Two years ago Jeff Woodard of First Farmers State Bank in Minier, Ill., was one of the first bankers to pass a new test to become an official "Certified Community Lender."
He took the test, he said, because he wanted tangible recognition of his lending expertise.
"It's important to have accredited acknowledgement of accomplishments in your field," said Mr. Woodard, who has been a banker for 22 years.
His new certification has proved to be more than just a pat on the back, he said - it helped him get hired as a senior lender at the $82 million-asset First Farmers seven months ago after leaving a lower-level job at the $100 million-asset First National Bank in Tremont, Ill.
Mr. Woodard said customers are noting the distinction, with help from ads about First Farmers' lender accreditation. (Two other lenders from the bank were certified in January.)
"I think the accredited lender does give customers more confidence in their loan officer, and I think the recognition is growing every year," he said.
Accreditation is not a requirement as it is with accountants or financial planners, and the vast majority of lenders are not certified.
Sandra McAvoy, the certification program's founder and a senior vice president with the Community Bankers Association of Illinois, said, "I'd like to see this become a national designation, recognized throughout the community banking profession - something like a CPA or a Certified Association Executive."
Right now there is no standard for lenders at community banks, she said. With a national designation, she said, banks across the country could finally have some assurance that they are hiring qualified, competent lenders.
Just three other community bank trade groups - in Indiana, Iowa, and Georgia - are offering certification to bankers in their states, and only 78 lenders have received certification (the Illinois group started offering it in 2003).
But Ms. McAvoy said that after three years of developing the certification process, she is ready to take the show on the road. Over the next year she plans to promote the certified community lender program to other community bank trade groups, with a goal of getting a handful more on board.
To get certified, bankers must pass a six-hour test (designed by Bankers Management Inc. of College Park, Ga.) consisting of 200 multiple-choice questions and a written section involving three case studies. The wide-ranging questions cover topics such as commercial, consumer, and agricultural lending.
To qualify for the test, lenders need at least three years of lending experience and to show they have taken continuing education (the number of continuing-ed hours depends on experience). Once they pass - the pass rate is about 75%, Ms. McAvoy said - their names can have the CCL suffix as long as they meet the ongoing continuing-ed requirements.
Ms. McAvoy said members of the Illinois group had been complaining about how hard it was to recruit and retain good employees.
Eighty-one percent of banks told the American Bankers Association in a survey published in February that they thought it was hard or very hard to find qualified business lenders; 53.6% said they had problems finding qualified mortgage lenders; and just over half said they "assign more value" to job candidates who have professional certifications.
Certification helps solve this problem, Ms. McAvoy said.
"If you are recognized in the community banking profession and have a status, then you have more of a sense to stick around," she said. "And it also helps recruiters easily recognize these skilled individuals."
Other groups offer different kinds of certification for the banking industry. For example, the Independent Community Bankers of America has tests for Certified Community Bank Compliance Officer, Certified Community Bank Internal Auditing, and Certified Community Bank Security Officer. The ABA program, which is 12 years old and has certified more than 8,000 bankers, offers nine distinctions, including Certified Regulatory Compliance Manager and Certified Financial Marketing Professional.
However, more than half of the ABA certifications have been in the areas of compliance and trust, and the only lending certification is geared toward business loans. And the ICBA certifications coincide with courses taught through that group; they do not reflect a banker's general experience.
Ms. McAvoy said she hopes other trade groups will see the merits of lender certification and begin offering it to bankers in their state. To encourage them, the current five-person steering committee has added four more seats to be filled on a rotating basis by all trade groups that decide to offer the certification. The steering committee helps to create and promote the test. Members of the current committee had to front $2,000 of seed money to help create the test.
Another selling point Ms. McAvoy uses is fee income. The trade groups pay roughly $100 for each test but can set their own fees. Ms. McAvoy's group, for instance, charges members $200 and nonmembers $300.
Donald E. Hole, the chief executive of the Iowa Independent Bankers, said his group was intrigued by the test from the beginning and decided to sign on to the certification program soon after the Illinois association gave the first test. (The Iowa association has a member on the steering committee.)
"I think this is one of those opportunities for a banker to demonstrate their expertise to themselves, the banking community, and their customers," Mr. Hole said.
Dana Wiegand, a vice president at the $45 million-asset Goodfield State Bank in Illinois, passed the test in January. He said he took it for the recognition and because he felt it could eventually hold a great deal of weight.
"It's a good base of knowledge to have as a lender," Mr. Wiegand said. "And I also think it's an up-and-coming distinction that will become more widely recognized in the banking community and the community at large."
