There is More to Business Services than MBLs

WASHINGTON-While it is appropriate for credit unions to offer their members the business capital they need to get things going or to simply grow, there is more to business services than just lending. Northwest Corporate Federal Credit Union CEO Kathy Garner told attendees of the NCUA PALS workshop in Washington, D.C. that if they want true business clients, they should try to fulfill all of their financial services needs. In addition to lines of credit and business credit cards, credit unions should think about business checking and savings, money markets, online banking, merchant bank cards, ACH origination, electronic tax payments, sweep accounts and others. However, Garner warned, business and consumer products are two different animals and should be priced accordingly. Garner’s corporate was the first to start a CUSO to help CUs serve businesses. CU Business Group was formed by Northwest Corporate, Firstcorp, and Empire Corporate to help credit unions with their business servicing decisions. Its staff of 10, including six business professionals, are currently working with 37 credit unions in seven states. Though business loans are not a way to bring a lot of funding in fast, they can be quite profitable. Joanna Bruno, president of J.R. Bruno and Associate of Glendora, Calif., explained that credit unions can make money off packaging fees, sale premiums, servicing income, the return on the non-guaranteed portion, float income, and product cross sales. However, credit unions should be careful what they charge for when participating in Small Business Administration programs, SBA Director of Portfolio Management Jim Hammersley said. SBA-guaranteed loans cannot include application fees, commitment fees, processing fees or brokerage fees. CU BizSource was represented on the panel by Pennsylvania Credit Union Association Senior Vice President Rick Wargo. CU BizSource offers help in the areas of regulator compliance, experience, analysis and underwriting, documentation, servicing, and training.