work together.

"Amongst the banks here locally, we have heard very little flak over the issue of tax-exemption," Osburn pointed out. "They're just interested in doing commercial loans. Most of the banks here and in Arizona, it's an open market. A free market with healthy competition."

The $134 million Ensign Federal Credit Union, which serves members of The Church of Jesus Christ of Latter Day Saints, has the lead seat on North Star's board and has already processed $6 million in loans through the CUSO. Diane Whitaker, president/CEO of Ensign, said the credit union was in the midst of a national search to partner with a business lending CUSO when Osburn and Moody made contact. Whitaker admits she was more than skeptical about linking up with a company that served both banks and credit unions.

"Being a credit union person, it was a big concern," Whitaker recalled. "I was afraid there would be competition. I thought they would cherry pick loans and give the 'good' loans to the banks."

After talking with both former bankers, Whitaker said her concerns were alleviated when it was assured that Ensign would have the lead spot on North Star's board and that the other board members were contractors, real estate investors and developers--not bankers. But, she added, Osburn and Moody's numerous connections to banks all over the valley were good ones and "not one had a problem with working with credit unions," when asked.

"We thought we should get out of our credit union niche and work with other industries and perhaps, learn from them. I don't think anyone has the market on intelligence," said Whitaker, adding, they saw more benefits with linking up with a local CUSO rather than a national one.

North Star will also partner with third-party vendors to offer audit and tax services to businesses with annual revenue of $5 million or more as well as retirement planning, employee benefit packages, key-person life insurance for business owners and workman's-compensation insurance programs.

Osburn said the impetus behind North Star was what he describes as a lack of a strong business lending presence in the Southwest, specifically from Reno south through the Las Vegas Valley to Phoenix and out east towards Albuquerque. North Star invited several credit unions to its December 2006 introduction meeting, but only Ensign expressed the strongest interest in moving forward, Osburn said. The CUSO is also working with local community banks and is looking to align with smaller credit unions to become subscribers. When it comes to business lending, the so-called competitive line between banks and credit unions may be starting to blur, he offered.

"A lot of credit unions are migrating to the standards of the banks [with business lending]," Osburn said. "Quite frankly, many have hired

former bankers."

Moody, who noticed that credit unions tend to be "much warmer and more on a personal basis," said the migration is "almost natural because of government regulations."

"I feel like credit unions are more restrained when it comes to business lending," Moody said. "But competition is good. Eventually, the more you have to offer, the better it is for consumers."

Looking ahead, Osburn said North Star's strategic plans are to build up the loan portfolio, beef up commercial loan audit services and expand its training program. Ensign partnered with CU Business Capital, LLC to offer other business loans and deposit services. Whitaker said the credit

union plans to have business deposits up and

running by September.

"I think credit unions are really trying to do more deposits than loans now," Whitaker said. "When we get our deposit accounts set up, the loans will follow."

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