Credit Union Conversations

Joe and Mark talk about the state of the industry and what we see on the horizon. Joe also gives a profile of his strategy for investing in CUSOs and what he looks for in a CUSO investment.

IN THIS EPISODE:

• [01:51] Joe shares his background and journey to where he is today. 
• [04:01] Mark and Joe agree that it is a disservice to an employee to specialize in an area as opposed to learning the entire strategy of a Credit Union. 
• [06:30] Joe says being flexible in mindset and where you live expands your opportunities. 
• [09:20] Joe discusses CUSOs and why he sees it as a growth strategy. 
• [14:25] Joe explains why the business units and other interdepartmental teams are so important.
• [19:34] Joe shares the importance of constant learning and integrity and how he would advise someone who desires to be a CEO.
• [24:29] Joe talks about his experience moving to Launch and discusses liquidity in the industry and how to rectify that problem. 
• [31:33] Joe makes guesses on interest rates; he discusses the shrinking labor force and states that succession planning is critical for the organization. 

KEY TAKEAWAYS: 

• CuSOs allow you to compete with larger competitors and are a way to scale business.
• A CEO must communicate to their team that when they propose an idea, it doesn't automatically require execution; instead, it's something they wish to deliberate with the team.
• Understanding the culture of a new office you transition to is essential. Inquire about the reasons behind their established practices rather than making immediate changes because they differ from your previous approach. 

RESOURCE LINKS:

Mark Ritter Website

Joe Mirachi - LinkedIn

BIOGRAPHY: 

Joe Mirachi is a credit union veteran who has served as the CEO of Launch CU in Florida for the last eleven years. Before Launch, Joe served as the CEO and held other executive roles at credit unions in New Mexico. Launch CU, and Joe is an industry leader in investing and assisting in CUSOs.

Mark & Rick travel down a compliance journey today to talk about best practices in compliance and some of the pitfalls of not keeping on top of it at your organization.  

Connect with Rick and his team at https://compliance4creditunions.com/

IN THIS EPISODE:

• [02:47] Rick shares his background and current position at Compliance 4 Credit Unions.
• [07:56] Rick discusses what has surprised him as the credit union space was developing. 
• [10:56] Expertise in the field, as opposed to being a generalist, has made a difference in the operation of credit unions.
• [12:55] An explanation of the new NCUA rule. 
• [22:17] Rick talks about the difference between having expensive staff and hiring outside help. 
• [26:13] What hot buttons does Rick see coming, and what items need monitoring? 
• [30:43] Rick refers back to his best crazy stories. 
• [33:55] Rick invites listeners to check out the references for Compliance 4 Credit Unions and to feel free to contact him. 

KEY TAKEAWAYS: 

• The NCUA rule will make significant changes, resulting in a better working atmosphere at the credit union site.
• Make sure you remove private information when sharing document templates.
• The new NCUA rule will assist credit unions in dealing with difficult members. 

RESOURCE LINKS:

Mark Ritter Website

Compliance 4 Credit Unions Website

Ricks Email

BIOGRAPHY: 

Rick Wargo is the Chief Operating Officer of Compliance 4 Credit Unions, a collaborative compliance consulting CUSO.  Rick has nearly 30 years of experience working with financial institutions, chiefly credit unions.  He started his career with the Pennsylvania Department of Banking and then devoted 24 years to the credit union movement, serving in compliance and advocacy roles for the Pennsylvania Credit Union Association.  Rick also gained valuable transactional experience as an Assistant Counsel for PHEAA, a student loan servicing organization.

Rick re-entered the credit union space in 2017, serving as an independent consultant.  That journey spawned the creation of Compliance 4 Credit Unions in 2019.  Rick continues to build the CUSO’s infrastructure while advancing the compliance interests of participating credit unions.

It's time to take a walk down memory lane and review the wackiest and wildest loan program ever: the Paycheck Protection Program. Omar Shute of DFTC and Jeff Lyons of MBFS joined us for a topic that we couldn't fit into just one episode.

IN THIS EPISODE:

• [00:31] Mark gives an overview of Part One.
• [01:35] The expectation of how long the PPP loans would last. 
• [03:36] Jeff describes the second round of PPP loans, and Omar shares his view of Part Two of PPP loans and how technology assisted the process. 
• [11:22] Jeff and Mark talk about the eligibility for the second round of PPP loans. 
• [18:23] Jeff reflects on how business owners admittedly stated they didn’t need the money, but it was free. 
• [20:37] Omar suggests which industries should have received the money, and Jeff talks about the forgiveness process. 
• [26:50] What worked well on the PPP and what didn’t work. 

KEY TAKEAWAYS: 

• The PPP Loan Round One wasted a lot of taxpayer dollars.
• By the time Round Two of PPP Loans began, institutions could make more money because they had worked out the kinks they experienced in Round One.
• The PPP loans are responsible for the inflation we have today.

RESOURCE LINKS:

Mark Ritter Website

DFTC Inc. Website

BIOGRAPHY: Omar Shute is the Senior Vice President of Commercial Services at Development Finance Training and Consulting Inc. (DFTC). In this role, he oversees commercial underwriting and participates in all the related suites of services offered by DFTC. Omar has 20 years of commercial lending experience, and his career background encompasses commercial loan origination, relationship management, commercial loan underwriting, credit administration, commercial portfolio management, policy generation, and senior leadership experience, including working with boards of directors.

It's time to take a walk down memory lane and review the wackiest and wildest loan program ever: the Paycheck Protection Program. Omar Shute of DFTC and Jeff Lyons of MBFS joined us for a topic that we couldn't fit into just one episode.

IN THIS EPISODE:

• [02:31] Jeff and Omar introduce themselves and share their responsibilities at their respective firms. 
• [04:24] Jeff’s view of the history of PPP loans and Omar reflects on the beginning phase of PPP loans. 
• [08:12] Mark remembers the chaos, Jeff shares his perspective and Omar talks about rules changing three times a day. 
• [13:34] Mark and Jeff speak about the bad actors, fraud and loan farms. 
• [19:31] Omar reflects on how the credit union prevented fraud. 
• [21:33] Mark tells about the largest fraud case. 
• [26:07] Jeff and Omar discuss the systems in place to make the program work. 

KEY TAKEAWAYS: 

• The PPP loan program was vulnerable from the start because it was rushed, and there were no clear guidelines.
• The government was just asking for fraud because the regulations were so loose, and unfortunately, FinTech wasn’t doing its job.
• The credit unions stepped up and did what was necessary to care for customers while protecting the taxpayer.

RESOURCE LINKS

Mark Ritter Website

BIOGRAPHY: Omar Shute is the Senior Vice President of Commercial Services at Development Finance Training and Consulting Inc. (DFTC). In this role, he oversees commercial underwriting and participates on all the related suite of services offered by DFTC. Omar has 20 years of commercial lending experience and his career background encompasses commercial loan origination, relationship management, commercial loan underwriting, credit administration, commercial portfolio management, policy generation, and senior leadership experience including working with boards of directors.

Sean and Mark hit up a variety of topics to talk about the state of the mortgage industry today and how lenders can keep up with all the necessary compliance. Also, why have credit unions gotten so complicated? Mark and Sean take a deep dive into credit reporting and where it was, and where it is going.

IN THIS EPISODE:

• [01:44] Sean describes his role at United One, the areas of service United One provides, and the current state of the mortgage market. 
• [12:05] How are appraisers dealing with values in the marketplace, how does an automated valuation tool come into play, and why is it difficult to become an appraiser?
• [21:39] How the credit report has changed over the years. 
• [26:02] Explaining the difference between Credit Karma and other reporting agencies and Sean's opinion of a non-traditional credit scoring system. 
• [30:54] Sean explains credit leads versus retention triggers. 
• [38:25] New changes coming in the appraisal regulation process. 

KEY TAKEAWAYS: 

• It is a tough market for lenders in the residential sales market. The problem is they need more inventory, and buyers need to be able to find an affordable house and win the bid. 
• Because home sales are scarce, lenders must work hard, align themselves with the right partners and real estate agents and continue growing their base. 
• Many people may not sell their homes for a long time because of the low-interest rate they have.

RESOURCE LINKS

Mark Ritter Website

United One - Website

Sean's Phone Number: 570-706-2830

Sean's Email: [email protected]

BIOGRAPHY: Sean Higgins is the longtime executive of United One Resources in Wilkes-Barre, PA and the current Executive Vice President of the organization. For over 100 years, United One has supported the lending and real estate communities with a variety of solutions and services, including credit reports, appraisal management services, property reports, flood zone determinations, fraud reports, tax monitoring, title insurance and settlement services. United One provides a competitive advantage for lenders to move quickly from approval to close with confidence.

We all say we want to help small businesses but sometimes struggle to help growing businesses meet their cash flow demands. Mark and Pat talk about the challenges of wrapping your head around the credit culture, risk, and management of properly funding small business owners at the credit union.

IN THIS EPISODE:

• [02:27] Pat shares his banking and credit union background. 
• [04:08] How were people trained in the ’80s to learn commercial lending from the ground up? 
• [07:44] How did Lendovative get started, and what is the vision? 
• [10:56] What are the statistics that support opportunities for credit unions to service small businesses? 
• [17:07] Pat discusses the funding of small businesses and finding the middle ground of overseeing lines of credit and how meaningful the relationship between the borrower and the lender is. 
• [25:21] Lendovative will  partner with MBFS to provide new technology to assist credit unions in their day-to-day practices. 

KEY TAKEAWAYS: 

• Lendovative is a company that puts lenders and borrowers on the same page, and they can increase transparency and communication.
• The growth in small businesses from 2019 to today went from 31 million to 33 million.
• The goal of a credit union should be to have a complete relationship with a client. That is achieved by having their checking, savings, and loans all serviced by the credit union.

RESOURCE LINKS

Mark Ritter Website

Lendovative Website

BIOGRAPHY: Patrick True

After a long career helping financial institutions at Jack Henry, Patrick True has transferred to become the President of Lendovative. Lendovative's mission is to support community-centered financial institutions in the United States by empowering them to enhance business-client relationships while reducing credit risk.

What's changed since the last time Kristina was on the show? A lot. Mark and Kristina talk through what it is like to analyze and decide on lending in today's "new normal."

IN THIS EPISODE:

• [00:35] Mark explains what MBFS or Member Business Financial Services does, and Kristina explains her role at MBFS and how the company has grown since its inception. 
• [08:19] Kristina explains the pros and cons of working from home.
• [13:32] Kristina discusses how the higher interest rate is impacting the lending business and how those rates are impacting the economy in general. 
• [19:30] Kristina talks about the affordability of real estate and how the value of the real estate and its cash flow could be devalued. 
• [21:46] Kristina believes that credit unions should get back to basics and inform, educate and give options to borrowers who may need to renew a loan. 
• [25:28] Discussion of the lack of residential apartment units and low inventory of homes available. 
• [28:05] Discussion of warehouse space compared to office space and shopping malls and location, location, location. 

KEY TAKEAWAYS: 

• Interest rates have affected the housing market; however, a credit union is still a great place to visit to obtain financing.
• The necessity for office space is declining because of employees working remotely.
• Destination malls are still thriving; however, many malls are nearly vacant.

RESOURCE LINKS

Mark Ritter - Website

BIOGRAPHY: 

Kristina Paulson is the AVP of Credit Services at MBFS. After a career in banking, Kristina shifted to credit unions to assist in credit analysis. Today she leads the team's credit analysis on new loans, annual reviews and portfolio management.

After talking about the boom times in the pandemic, Mark and Dustin reset about what it takes to manage the sales and strategy for a large credit union in 2023 and beyond. Mark and Dustin do quite a bit of prognostication in this episode, so we will revisit it next year to see if they are right!

IN THIS EPISODE:

• [02:20] Dustin shares his working history through the banking field to the Credit Union industry. 
• [07:10] Dustin tells the genesis of Clearview Federal Credit Union, where he is the VP of Lending. 
• [09:18] Dustin talks about the differences between living in Albuquerque and the PA area. 
• [12:53] What is the outlook for the liquidity situation in attracting deposits in 2023, and how do geographic limitations affect the Credit Union? 
• [19:13] Dustin discusses the car lending aspect of the Credit Union. 
• [23:53] Discussion of the home equity and mortgage markets and how homeowners may be staying in their homes just to keep the low-interest rate. 
• [31:32] Discussion of the commercial real estate market and the challenges that exist, and Dustin reveals the message that can be sent to the marketplace. 
• [36:37] Dustin talks about the solicitations he receives as the VP of Lending and how he screens those in or out. 

KEY TAKEAWAYS: 

• Attracting depositors is more challenging than it used to be.  Credit unions need to target ways people think about their investments and develop creative ways to attract electronic deposits back into local branches.
• The biggest obstacle for Credit Unions is that they have local parameters fencing them in, whereas big banks and neo-banks do not.
• A Credit Union shouldn’t tie up all their lending power to vehicles only, which can hold you captive to the ebbs and flows of the car market.

RESOURCE LINKS

Mark Ritter - Website

Clearview Federal Credit Union - Website

Dustin Holmberg - LinkedIn

BIOGRAPHY: Dustin Holmberg is a longtime credit union executive currently the VP of Lending at Clearview FCU in western PA. In this role, he leads all consumer, business, and mortgage lending for Western PA's largest credit union. Dustin is also a board member of MBFS.

Kirk and Mark talk about the state of today's credit union industry and attempt to solve all the current climate issues. Kirk talks to Mark about the challenges for credit unions today in attracting and retaining the best talent. 

IN THIS EPISODE:

• [03:19] Kirk shares his employment background and what he is currently doing. 
• [10:22] Kirk discusses how he came to know the right questions to ask as a leader. 
• [12:03] The concept of national credit unions and the complexity of that operation. 
• [15:22] Ai technology has exploded and will change the way we do business. 
• [19:57] Liquidity pressures and how credit unions need to adapt quicker. 
• [24:55] Kirk explains what the job market is like for positions in the industry. 
• [27:53] Salaries are up in the industry, so other credit unions can take your talented employees and long-term, the agency suffers. 
• [31:06] The benefits of a 457f plan and a split-dollar-based insurance program.  
• [39:23] Kirk shares his contact information and welcomes the contact. 

KEY TAKEAWAYS: 

• Knowing a credit union's functions from the ground up can not be overstated as you move into a leadership role. 
• Ai technology is the pivotal point that will change how credit unions function, and they must adapt.
• It pays to take care of your employees if you want to retain them. CEOs can work from home and only go into the office a few times a month and, therefore, can be recruited and work for anyone.

RESOURCE LINKS

Mark Ritter - Website

OM Financial - Website

Kirk Kordeleski - Email

OM Financial Group - Webinar

Kirk Kordeleski - Linkedin

Kirk Kordeleski - 516-528-5057

BIOGRAPHY: Kirk Kordeleski is well-known in the credit union industry as a longtime executive at a large organization. These days, Kirk assists credit unions in retaining talent through OM Financial, an executive benefits consulting firm.

Mark and Mike try to demystify one of the complex and rewarding lending areas that can also be filled with pitfalls and peril if not done properly. Learn a bit about Mike's construction management history and what support exists for construction lending at credit unions.

IN THIS EPISODE:

• [01:50] Mike shares his education and professional background. 
• [03:14] Mike outlines the various services LCS provides. 
• [09:52] What was the construction industry like during peak-pandemic? 
• [13:43] How does the construction industry handle inflation uncertainty and the different types of construction management agreements? 
• [19:13] Mike describes the steps LCS takes to produce a risk report on the construction project and discusses difficult conversations when the review substantiates that a project cannot be built for the bid. 
• [24:41] How do draw management and a draw inspection protect the owner? 
• [30:10] Mike explains why a property condition report can assist lenders.  
• [33:16] Mike relates a nightmare story costing $200,000. 

KEY TAKEAWAYS: 

• Construction lending creates value for a community. At the same time, properties in disrepair define that community. New construction projects contribute to society.
• Some people are intimidated by construction lending because they are risk-averse. However, with proper oversight, many problems can be avoided.
• Lenders should get assistance from a lender consulting firm at the project's conception and before funding to avoid costly mistakes.

RESOURCE LINKS

Mark Ritter Website

Lender Consulting Services Website

BIOGRAPHY: After a long career in construction management, Mike Kosmoski joined Lender Consulting Services in 2020 to head up the construction lending management division.

Lender Consulting Services, Inc provides Risk Management Solutions for Environmental, Construction, and Valuation Due Diligence to Lenders nationwide. Headquartered in Buffalo, NY, the firm has assisted Banks, Credit Unions, Pace and Alternative Lenders, Developers and Corporations for almost three decades.