Consistency has an important place in a credit union’s member business lending (MBL) environment.
That theme was carried throughout this week’s CUNA Lending Council Conference in Las Vegas and reinforced during a roundtable session Tuesday.
Jerry Bonk, regional lending specialist, NCUA Region 4, detailed the agency’s final MBL rule before entertaining questions from attendees.
In order to succeed—and comply—in member business lending, Bonk says, “Make sure you have appropriate staff. From my standpoint that’s where the rubber hits the road.”
Improved reporting, albeit limited by systems in use, will support board and senior management in their supervision.
“It is incumbent upon you to share risk your profile with NCUA, your board, and your management,” he says. Credit unions should require and assess results of independent third-party reviews.
That sentiment was echoed by Bob Stowell, senior vice president/chief strategy officer at Firefly Credit Union in Burnsville, Minn. After completing a third-party review, the credit union looks at a draft and addresses any issues.
Stowell, chair of the CUNA Lending Council executive committee, facilitated the three-hour session Tuesday morning.
Examiners will assess a credit union’s risk-rating system for credit quality, Bonk says.
“This is one of the first things we’ll look at” as examiners compare policy with what they find, he says. Credit unions need consistency across all branches and staff.
Some credit unions are waiting for guidance from NCUA on its final MBL rule before writing a new policy. Stowell reminded attendees that credit unions don’t have to have a separate policy.
“Many credit unions will incorporate their MBL policy into their commercial policy,” he says.
The session finished with tabletop discussions on Small Business Administration programs, additional MBL services, loan participations, commercial loan construction, and selecting the right MBL credit union service organization.
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