Lending: Go ‘All In’

Take a no-holds-barred approach to lending.

May 31, 2011

Poker and the term “all in” have become ubiquitous. Surf through cable TV and you’ll find televised poker on all kinds of channels.

I’m waiting for Animal Planet to have poker-playing dogs as one of its “reality” shows. I can hear the dogs barking “all in” as I write this column.

Recently, I had lunch with two senior credit union leaders in my part of the world. I was fascinated to hear them describe the steps they’re taking to focus their staff on lending as the major strategy for the next several years.

Obviously, they’ll continue to meet members’ financial services needs in all areas. But the credit union is going back to its roots, looking to meet members’ lending needs in every way it can. In that sense, they are going “all in” on lending.

Going “all in” on lending will likely mean different things to different credit unions. But there are some tasks that will look similar, no matter the needs in a particular credit union:

• Dedication from the board and senior management, all the way through to front line staff. This means everyone understands and supports the strategy.

The board must also provide the financial means necessary to make lending the focus of your operations.

• Discipline. Financial and underwriting discipline is a must. It’s easy to make loans—anyone can put a bucket of money in the lobby with a sign that says “Take what you need.”

Going all in doesn’t mean making loans to everyone. It means making loans in a prudent and safe manner.

It means thorough and continuous monitoring of members’ credit histories and payment patterns. It means taking risk, but risk appropriate to the make-up of your membership.

• Communication. Tell members you want to be the first and only place they go for loans. Your marketing, branding, and advertising efforts should focus on lending.

Be creative in how you get the message out to members. Fill your branches with lending offers and a laser-like desire to be members’ source for loans.

• Training. Change how your frontline staff—members service and call center representatives, loan officers, and tellers—focus on members’ lending needs.

Train them to pursue lending opportunities with every member interaction. Your frontline staff is the secret to lending success. Train them, train them again, and then encourage them with every interaction they have.

Whether your credit union has $1 billion or $10 million in assets, these steps are necessary to be successful.

How do you know you’re successful? Your members will let you know they’re getting the message from you. Your staff will let you know what they’re hearing from members. And your financial results will let you know.

Just like those card-playing dogs, you can bark with delight when you win big by going “all in” on lending.

BILL KLEWIN is director of regulatory compliance at CUNA Mutual Group.