As expected, Northwest Corporate CU becomes first corporate to jump into business services realm

PORTLAND, Ore. – After many months of research and talking with credit unions and other corporates, the $1 billion Northwest Corporate Credit Union has officially jumped into the member business products and services arena. Northwest Corporate has started a new CUSO, CU Business Group LLC (www.cubusinessgroup.org), which will offer support for CU business lending and business deposit-related products. Its CEO will be Northwest Corporate SVP and CFO Larry Middleman. As credit unions seeking to get into serving businesses have found out, expertise is critical. Many CUs involved with MBLs have hired former bankers who have commercial lending experience. Middleman himself worked for a $600 million community bank in Portland, Oregon before joining Northwest Corporate about two years ago. “I was not hired for this purpose, but I have a real good pulse in that market (serving businesses). It’s very familiar to me,” said Middleman who has 20 years experience in community banking. The corporate is currently conducting job searches for a senior commercial loan officer and a loan servicing manager. Both jobs require a minimum of 10 years experience in this field. If things go well, a third person could be hired by the end of the year, said Middleman. “The CUSO will be offering pretty much the entire gamut of business lending, business development services. All the way down to making a recommendation on the credit itself, and quite a bit of ongoing work and analysis,” said Middleman. Still it will be a partnership, he said. The CUs will be responsible for gathering documentation, ultimately approving and closing loans, while CU Business Group handles things such as underwriting, scoring, analyses and much of the more complex work done in a back-office support function. Essentially, if a CU wanted to it could outsource its business services to the CUSO. Middleman said serving businesses isn’t just about business lending. “There’s a whole package of services that have to come together. Ancillary services like offering merchant bank cards, ACH for payroll deposit. A lot of those things Northwest Corporate has in place,” he said. Northwest Corporate will provide HR, facility and other support services for the new CUSO. “Small business is the backbone of our economy and is projected to grow considerably in the next three years, yet they are very much underserved, especially regarding access to lending and capital,” said Northwest Corporate President/CEO Kathy Garner, who has been talking seriously about the corporate helping CUs serve businesses since at least the beginning of this year. Here again a corporate is venturing into unchartered territory by getting into a completely new product offering, similar to what Mid-Atlantic Corporate FCU did a few years back with bill payment. Middleman said he doesn’t know if this will emerge as a corporate CU trend or not, but he did say that he’s already talked with other corporates who are interested and there could be some partnerships coming with fellow corporates pretty quickly. He said there is one deal in particular that is close. While technology allows much of this work to be done from a central location, Middleman said a local presence is going to be needed to do it right. “If we partner with another corporate, we’ll have our infrastructure here, but there is still a big part of needing to go to the credit union and to the business to analyze things. So that will require a loan officer in the different states where we partnered.” As for interest from credit unions, Middleman believes this area is a virtual “gold mine” of an opportunity for Northwest Corporate. [email protected]