Colorado League in business loan push, eyes two-state CUSO

<p>DENVER – Eager to find the ideal “model” for business lending, the Colorado Credit Union League is considering buying into an existing Longmont, Colo. CUSO owned by three Wyoming and Colorado credit unions. Just how much of a stake the League might make in Centennial Lending Inc. as a minority partner was uncertain, but the concept, explained League officials, is to open up investment by other Colorado CUs which seek to expand into the commercial credit field. The decision to make the investment by the League as well as other Colorado and Wyoming CUs could come as early as August when the League Board meets and hears recommendations from a special League Business Services Task Force that was formed last year. The 10-member Task Force is headed by David R. Maus, president of Public Service Credit Union of Denver and the immediate past chairman of CUNA who has long advocated CUs becoming innovative in pursuing investment and business loan services to serve members. Under a CUSO structure, Centennial Lending Inc. might serve as an “outsourcing” vehicle for small Colorado and Wyoming CUs that could upstream their loans to the CUSO, officials explained. Centennial Lending, formed in October 2000 and with a staff of ex-commercial bank executives, is owned by Premier Members Federal Credit Union of Boulder, Norlarco Credit Union, Fort Collins, and Warren Federal Credit Union, Cheyenne, Wyo. The CUSO is currently servicing $100 million in residential mortgage loans and approximately $33 million in commercial and construction loans. “In addition to underwriting, closing and providing origination assistance, Centennial also services the loans,” and is handling loan participations, said a Centennial statement. The statement noted that many of the CUSO’s senior staff “have come from a commercial banking background and have many years of experience, thus exceeding that required by NCUA for member business loan underwriting.” Centennial said it is offering its services to members of its owner CUs as well as those of other CUs in Colorado and Wyoming. The president of Centennial Lending, Mark Bostock, a former senior vice president at the $6 billion First Banks of Colorado, Lakewood and former executive vice president at Premier Members Federal, said he welcomed the League’s interest in his CUSO “because it will give credence to our program and gets the word out.” A contingent of League staff officials is expected to come to Longmont June 28 to look over the operation as part of the Task Force work, noted James Holt, president of the Colorado League. Holt stressed that Centennial Lending is just one concept or model that the Task Force is looking at in the commercial loan area though it does have promise. There is no doubt, said Holt, that Colorado and Wyoming CUs are hearing from their members about filling the business loan void left by both large and small commercial banks which have succumbed to numerous mergers. Local businessmen “find it rather bureaucratic to deal with San Francisco” when they need a small operations loan, which is why they have been turning to CUs, said Holt. Beside Maus, other members of the Task Force are: Jan Billotti, president of Community Financial FCU, Broomfield; John Byczkowski, president of Sterling Community FCU; Charles Emmer, president of Ent FCU, Colorado Springs; Douglas Ferraro, president of Bellco CU, Denver; Chuck Mabry, president of Norlarco; Gordon Pidek, president of Gateway CU, Aurora; Maureen Tebo, president of Warren FCU, Cheyenne; John Uchida, president of Space Age FCU, Aurora and Kim Withers, president of Wyoming Employees FCU, also of Cheyenne. The League noted that the Task Force has met twice recently to began “study, evaluation and development of viable member business service models.” Several CUs in “different asset categories already have business loan programs in place such as real estate or agriculture loans” but other CUs are seeking different options, noted Dan Micale, senior vice president of business development. The Task Force “is in the initial stages of gathering” data to find out what CUs need “to run a successful program.” The final will model will be offered through the League “or an appropriate joint effort with credit unions and/or other strategic business partners.” It was noted that the Task Force at one of its meetings heard a presentation by Grace Mayo, president of Telesis Community Credit Union, Northridge, Calif. Mayo has been active on CUNA business lending committees. -</p> <p>[email protected]</p>