<p>MIAMISBURG, Ohio – Member demand for business loans is "definitely on the rise," and Ohio credit unions should prepare to help small businesses ignored by banks or which look to CUs for guidance, according to John Bowen, a member of a special Ohio Credit Union League "Member Business Task Force." "We've been actively making business loans for two years now with about $3 million on the books," declared Bowen, president of the $107 million River Valley Credit Union here who has been offering assistance to other Ohio CUs through his work on the year-old League Task Force. Industry consultants and CUNA sources say that among state leagues, Ohio is probably furthest along in developing the most workable lending and deposit tools as well as procedures and training programs for CUs to start pursuing small business accounts. River Valley, located in this Dayton suburb, has set its lending "niche" at $500,000 or less, said Bowen, noting that this is a range that banks seem to shun and thus offers potential for CUs. So far, River Valley has 32 business loans after starting two years ago with "about six or eight," and so far the program has proved successful. Pursuing business loans fits well into the CU's asset-liability mix since "we were in a position of allowing fixed rate mortgages to run off," and thus "we could put it back in the less variable rate business loans," said Bowen, noting also that River Valley has been using the "moonlighting" services of a local banker to assist the CU. "He's been very helpful in consulting with us in underwriting the loans and actually stopping by the businesses to introduce himself and make sure things are working well," explained Bowen who declined to identify the banker or his institution. Rose Bartolomucci, chairman of the Ohio League Task Force and president of the $28 million Kent Credit Union, said the mission of the 11-member group has been to find ways "to educate the membership on how to go about" developing a program not only offering loans but handling business deposits and other related services. To spur CU business education, the Task Force has utilized services of a former Sumitomo Bank credit executive, Steven Sanders, of Vancouver, Wash., to conduct a series of training workshops across the state with the first series launched in March. Quarterly sessions are planned again starting in May in Columbus, Cincinnati, Toledo and Cleveland in which the basics of business lending is taught. "Our League staff is putting together a package of policies, procedures and forms that can be utilized by individual credit unions in a template form," said Bartolomucci. The template is expected to be ready "within 90 days," said Michael Gaylord, director of business development for OCUL Services Corp, the League's service subsidiary. Kevin Lytle, CUNA's vice president of national marketing, said the Ohio effort on business lending dovetails with CUNA's broad business lending and education program spearheaded through the national organization's Center for Professional Development. Lytle noted that "many of the findings from the Ohio task force have been used by us," noting also that online background material and manuals on business lending appear on CUNA's Web site and were to be further discussed at a special Small Business Summit held in Washington April 16 (see related story page 4). In organizing the Business Task Force, the Ohio League noted in a May 2001 statement that "not all Ohio credit unions will view member business services as a relevant opportunity" and many lack the capability to enter the market, but for those which can "a significant member need is evident." "A robust strategy" in the small business sector, said the League, does involve major structure changes for CUs as well as a new "learning culture." On business lending, the League Task Force said it does seek to pursue both secured and unsecured lines as well as guarantee credits. It also will seek to develop programs for "business checking/money market accounts, cash management services, and account access/information solutions." It also listed "merchant card processing, employee retirement and insurance programs and payroll processing" as areas of opportunity. Gaylord noted that because of the "risks" involved with business products, "we realize the importance of caution and due diligence before credit unions enter this arena." As a result, "the Ohio Task Force has made a concerted effort to keep the regulatory agencies informed and involved." On that score, officials from NCUA and state agencies have been invited and attended Task Force meetings, said Gaylord. Bartolomucci said her own CU has yet to get into the "full gamut" of business services and is still working on the lending side exploring loan participations. But pursuit of business services would fit the CU's goals since it now has a community charter, she said. Other members of the Task Force include: Glenn Culler, Ackerman CU, Columbus; Russ Fisher, Century FCU, Cleveland; Tom Furrey, Western CU, Columbus; Jim Johnson, Hopewell FCU, Heath; Evelyn Lhury, Community One CU of Ohio, North Canton; Anne Masterson, Greater Warren Community Healthcare FCU, Warren; Scott Rutherford, CODE CU, Dayton; Jack Sarver, TeleCommunity FCU, Akron; and Michael Spindler, Mead Employees CU, Chillicothe. -</p> <p>[email protected]</p>