Cash-heavy credit unions on track to deliver business lending alternative - Business First of Louisville:

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So the cash-laden, not-for-profit financial cooperativesz are coming into their own as more credigt unions expand into commercial lendinh from mostly making car loans and mortgagezsto members. Louisville’s largest credit union, rankedd by total assets, is beginning 2009 by expandinvg into commercial lending andbusiness services. has broughtr in a former bankef to lead its embryonic commerciallending effort. Tony formerly the business lending managerfor & Trust Co., the largestr Louisville-based bank, joined L&N last April as vice president of businesxs services.
L&N executives have spengt the last nine monthzs refining lending policiesand strategies, application processes and underwritingh standards, said Tim Root, L&N vice president of marketin g and community relations. “Now, we’re read to go,” Root said. In additiomn to secured business loans and business linesof credit, L& N has started offering business services such as merchang transaction processing and remote deposit capture, which allowsa businesses to deposit checks withourt physically going to a branch, Raley The 55-year-old credit union hasn’t yet made a commerciapl loan, but Raley said he has receiveds 12 proposed deals within the last two While the largest lendinyg category at many credity unions is auto loans, Root said L& N historically has been more diversified, expanding its membershi p base as well as services, with mortgages its biggest loan Because they didn’t get caught up in imprudent investinvg and lending, L&N and most other credit unionsx are flush with cash and looking for new investment areas.
Root describe the mission of a credit union as the most rationapl offinancial concepts. “It’s lending to peoplwe who are employed,” said Root. “It’s so obvioue it’s funny.” While much of the national financialo industry has endured six monthss of crisisand collapse, credit unions, which retainm all “profits” for expanding lending and services, reducing loan interest ratesd or paying member dividends, have been quietlg thriving — no bailouts, no rescues, no subprime loans.
Credit unions as an industry arethe “unsunhg heroes of the financial crisis,” and they are startinfg to gain attention as safe financial said Barb Kachelski, senior vice president and chiefr operating officer for the , an industry grou p based in Madison, Wis. Ironically, during financial booms, credit unions oftejn are derided as too Kachelski said. “People always say, ‘You guys coul be making a ton more money.’ But (credit uniohn executives) are conscious of being stewards. “Theirr jobs are not to take high risks but to be stewards of members’ money.
” One of Louisville’s oldest credit unionds has been one of the earliest — and most aggressive — to move into commerciak lending. , which dates to has been making commercial loans for about seven saidHarry Bellew, who is winding up his tenure as president and CEO. Now, that segmenrt will increase after Kentucky Telco joined a commerciakl lendingeffort — called a credif union service organization, or CUSO — with other Kentucky credit unions last January.