Asset Exchange moves into loan participations

PORTLAND, Ore. – Asset Exchange, the best-known broker of credit unions’ credit card portfolios, has announced that is breaking into brokering loan participations as well. Its first loan participation clients are the $239 million Denali Alaskan Federal Credit Union, based in Anchorage, and the $941 million Technology Credit Union based in San Jose, California. The object of the sale was $3 million participation in Denali’s auto loan program. “We have streamlined the sale and purchase of loan participations for credit unions on a national scale,” said AssetExchange CEO William Koo. “For credit unions that wish to sell loan participations’ such as auto, mortgage, and commercial loans – we gather multiple competitive offers from other credit unions around the country. This provides the seller with many partnership opportunities from which to choose, and provides credit unions with excess liquidity another way to invest their money within the credit union movement.” The firm has “dozens” of credit unions interested in possibly participating in other credit unions loan programs, according to Monique Allen, communications vice president for Asset Exchange. David Bartoo, vice president of portfolio management for Asset Exchange said the firm had gotten into brokering the loan participation after determining that there were a significant number of credit unions interested in it and that this was a nationwide service that no one else had begun to offer. “It seemed a natural niche to us,” he said. Credit union loan portfolios differ from card portfolio sales, which Asset Exchange usually brokers, because the amount of the participation can vary and because the selling credit union usually retains ownership of the loan, he said. In card portfolio sales, the ownership of the account usually passes to the buyer.