CUBG CEO Larry Middleman, right, chats with CU Times Managing Editor Natasha Chilingerian at CUBG’s conference in Portland.PORTLAND, Ore. – Credit unions are beginning to service bigger business loan deals than ever before, but one thing hasn’t changed: They must lean on one another in order to succeed as larger deals come their way.
That’s according to Larry Middleman, CEO of the Portland, Ore.-based CUSO CU Business Group, which assists approximately 550 credit unions in 46 states with their business services programs. Middleman sat down with CU Times as the 2017 CUBG National Business Conference kicked off in Portland Monday to discuss the opportunities and challenges credit unions face today in their business services programs.
Middleman noted while credit unions are servicing bigger loans – such as a $45 million commercial loan CUBG recently assisted with that required participations from 13 different credit unions – the industry is still a small player in the banking world as a whole and must embrace collaboration in order to grow and move forward.
The CUBG conference covers hot business services topics such as regulation, how to grow and expand a business services program, and best practices in staffing.
“A lot of it nowadays is on growing and expanding your program, so things like business deposits – where do I go with systems and products, and what comes first? [We’ll] also [cover] other types of lending beyond commercial real estate, which is what credit unions tend to do, so things like C&I lending, which is lending in business operations, and multi-family lending,” Middleman said.
Some of the top concerns expressed by CUBG’s credit union clients – which the CUSO plans to address during this week’s sessions – include facing examiners under new Member Business Lending rules and learning how to properly structure the staff managing a business services program.
“This is a good time to be a lender,” Middleman said. “There are very few problem loans and issues in the industry, and the economy is doing well, so that’s nice. As far as concerns, there’s the threat of regulators, [as in,] are they going to come into my credit union and do their examination under the new regulations that started in January of 2017?”
Previewing his Tuesday keynote session, “Top Tips for Success in Business Services,” Middleman shared a couple of his best tips for credit unions. First, they must be objective when deciding whether to make a business loan. Some cooperatives, he said, will lend to someone because they’ve been a member for 20 years or because they’re a pillar in the community without objectively determining if they can pay back the loan.
Second, they should focus on developing a business lending niche. One community bank, for example, specializes in servicing the veterinary industry, Middleman said.
“A credit union might say, ‘We focus on commercial real estate,’” he said. “But what types of industries do they serve? What types of businesses?”
The conference, which drew about 150 attendees, runs through Wednesday at the Nines Hotel in downtown Portland.
