'Loan Marketplace' Explores a Better Way for CUs to Manage Loan Portfolio Risk

A new platform aimed at streamlining the process for financial institutions to buy, sell and trade commercial loans has been rolled out by banking services company Jack Henry & Associates in an initiative that will also allow participants to directly negotiate without having to go through a broker.

Jack Henry Lending’s Loan Marketplace aims to make it easier for banks and credit unions to manage their loan portfolios and asset allocation, diversifying and reducing concentration risk.

The online marketplace is meant to be particularly useful for smaller and independent institutions that don’t have the resources or variety of loans that larger banks do.

In a statement announcing the rollout, Jack Henry Lending Group President Terry Renoux said the marketplace will be beneficial not only for the lenders it serves, but also for their borrowers.

“Banks and credit unions as well as borrowers across the United States need longer-term solutions to maintain their stability and strength,” Renoux said. “The Jack Henry Loan Marketplace presents an opportunity for local lenders to extend more credit to those who need it, facilitating a network of financial institutions willing and available to take on a wide range of loan opportunities.”

The nationwide platform offers opportunities to a “full spectrum of geographies, asset sizes and institution types to create a broader community of lenders,” Renoux said.

The platform allows for loans to be offered and purchased in single transactions or pooled, and is available for any asset class. The digital format means document transfers that might have taken days or weeks may be accomplished much more quickly, perhaps taking only a few minutes to complete, according to a release announcing its launch.

“Marketplace participants gain a transparent process that provides an audit trail of all buying, selling and trading,” it said. “Intuitive listings allow users to navigate the marketplace with ease, filtering by asset class, product type, geography, loan amounts and counts, or a number of other credit metrics.”

Participating institutions also get deal notifications of trades going on in the market that match their particular conditions.