GERMANTOWN, Md. -- Mid-Atlantic Financial Partners, LLC said 2007 will be the year that it revs up expanding business services to other credit unions.
Launched in 2003, the CUSO is owned by $200 million Mid-Atlantic Federal Credit Union and $1.7 billion Visions Federal Credit Union. It currently serves its two owners and has amassed $20 million in commercial loans for both credit unions. MAFP has also done loan participations with a half dozen credit unions. For 2007, the CUSO said it will also offer its consulting services to help credit unions evaluate potential expansion opportunities.
"I believe that the CUSO can do the same for many other credit unions--whether they are interested in using this resource as a one-time service or becoming a part-owner for the long-term," said Charlie Thomas, CEO of Mid-Atlantic FCU.
MAFP has always had the authority to expand to other credit unions, but with member business lending being the fastest growing lending category, the timing is right to help those credit unions that want to go in that direction, Thomas said. The CUSO can assist credit unions with commercial lending, lines of credit, business accounts, merchant card services, portfolio creation, secondary marketing, MBL and loan participation policies and loan servicing among the services. With the growing number of business services CUSOs launched, MAFP's "? la carte" approach might make it stand out among others, said Frank Amantia, MAFP president.
"If somebody wants to get involved on a minimal basis with one particular product or get involved on multiple levels, we can accommodate them," Amantia said.
The fee structure depends on what a credit union's needs are, Amantia said. MAFP will be available to credit unions nationwide, regardless of field of membership.
"Even in our membership, we have people in the military that have businesses on the side such as real estate investing," he said.
Credit unions have an advantage with business loans because most big banks don't want services loans under the $1 million threshold and some small business owners just don't feel comfortable walking in to a mega bank, Thomas said. But there are a growing number of regional and community banks that have brought business lending back to the forefront, Amantia said.
"A small business owner is a consumer and small businesses employ consumers," Amantia said. "We've seen a migration of banks that are moving their small business lending operations forward and are trying to carve out this piece of the pie."
That means credit unions can't remain the "proverbial deer caught in the headlights" not knowing where to turn or choosing not to turn, Amantia cautioned. Some credit unions lament they aren't ready to roll out business services because they don't have experienced staff in those areas as a recent NAFCU Flash Report (see story on previous page) discovered. Amantia said with the amount of collaborative efforts underway in the industry, there are ways around that.
"You don't have to have the internal expertise or even the funding," Amantia said. "Really, there's no excuse for not offering business services right now."
Indeed, Thomas said business services are akin to what mortgages were for the movement more than 15 years ago--barely there, but growing. Now, credit unions have tackled that mortgage hurdle and gone beyond.
"I'm convinced that business lending is the next frontier for credit unions with the next obvious piece being [business deposits]," Thomas offered. "Particularly, if you're a community or multi-SEG credit union, there are thousands of small businesses out there--many with less than 10 employees--that are waiting to be serviced." --firstname.lastname@example.org