New TCUL Lending Services program makes it easier for Texas CUs to make MBLs

FARMERS BRANCH, Texas – Credit unions that have found it difficult to make member business loans because of NCUA 12.25%-of-assets restrictions and MBL expertise requirements will find the going easier thanks to a new program available through Texas Credit Union League (TCUL). The Commercial Credit Partner Program (CCP), made possible through the National Cooperative Bank (NCB), will allow Texas credit unions to offer business loans between $25,001 to $1 million to sponsor groups and credit union members. The interest is there among credit unions of all sizes. Results of a survey conducted last year by TCUL Lending Services, a subsidiary of the Texas Credit Union League showed only 19% of Texas CUs over $50 million in assets currently offer MBLs, and 18% of those $20-$50 million offer them. When asked if they would be interested in a program that would allow them to offer MBLs with relative easy and safety,, 79% of CUs over $50 million said they would, and 42% of those $20-$50 million agreed. “For everyone in the credit union movement, serving member needs is our supreme mission,” said Linda Winkfein, vice president of TCUL Lending Services. “While we’ve done an excellent job serving our members’ personal needs, there’s an untold number of member business lending requests that have gone unserved year after year.” The CCP program offers credit unions three options, depending on how much they want to be involved with the MBL transaction. The CU earns a fee, which is a portion of the origination fee, that varies based on the option the CU chooses: Using CCP’s referral option which operates similar to many of the mortgage referral programs many CUs currently use for residential lending, a credit union identifies a MBL need, collects some paperwork, and earns 37.5% of the 1% origination fee; if a CU can participates in the loan and helps with the application, it earns 45.5% of the 1% origination fee; a CU that assists with the closing earns 62.5%. NCB also sells back participations in the member business loans if the CU wants to retain earning assets. CUs can participate in loans for as little as 20-49%. For those credit unions that already have a business lending department and want to “rent” business expertise from NCB instead of added staff of their own, there’s the support services program for them to consider. Lastly, those CUs already involved with member business lending who want to sell NCB some of their loans can participate in the partners program. Through this program, credit unions have the opportunity to offer an added service to their members and compete with other financial institutions that have in the past, dominated the business lending market, said Winkfein. Winkfein noted that the NCB program opens the door for small credit unions to get involved with MBLs. TCUL Lending Services plans to begin rolling the NCB program out the week of July 23. It will be offering training sessions on the program throughout the state July 23-27. At press time, Winkfein said there were already 45 CUs registered for the program. -