MCUL Hosts Member Business Lending Summit in Troy (Monitor: April 12, 2010)
Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross and his senior Credit Union Division staff, credit unions and Michigan’s three member business lending CUSOs engaged in dialogue on member business lending issues during an April 6 summit at Commercial Alliance in Troy. The MCUL-hosted event covered the growing role credit unions are playing in commercial lending, including the Michigan Small Business Financing Alliance (SBFA), and the risks and appropriate practices that go along with it. About 40 participants attended.
The summit featured a panel comprised of OFIR Commissioner Ken Ross, Terry McHugh of Commercial Alliance, Dutch Ducher of CenCorp Business Solutions and Dave Wible of Michigan Business Connection, as well as MCUL President/CEO and event MC David Adams. Also in attendance were OFIR Deputy Commissioner Roger Little and Assistant Director John Kolhoff.
Commissioner Ross’s remarks covered business lending from a regulator’s perspective, highlighting concerns as well as the benefits of the practice for credit unions but stressing the need for prudent management from the initial underwriting stage through servicing and final payment.
“Recognizing the risks credit unions are taking on in this environment is critical,” Ross said. “OFIR understands that credit unions, like banks, are responsible for proper risk management, not total risk avoidance. Structured properly, member business loan programs can diversify income and provide local employers with access to capital in a tight credit environment. Because member business loans have fundamentally different underwriting and servicing requirements than consumer loans, prior to launching a program, credit unions need to understand the risks presented and use the risk mitigation tools at their disposal to reduce their exposure to losses.”
The session ended with a question and answer period involving the Commissioner, his staff and the representatives from the three CUSOs.
Visit the MCUL’s SBFA Web site for more information on partnership between credit unions and state agencies to spur small business growth, as well as upcoming opportunities for business lending education through MCUL events.