Rowland's Innovative Look Into Lending
ORLANDO, Fla. -- Rory Rowland ran a credit union once upon a time, but that may have been too boring for him after he managed it from a CAMEL 4 to a CAMEL 2 in about 18 months. Maybe the kind of showmanship he exhibits now helped him inspire employees to break through the failure-mindset and achieve far better things. But now a consultant and uber-popular speaker at CU conferences, he shakes up sessions and gets people to do things they might not ordinarily do.
His use of self-deprecating humor frees Rowland's audience to hoot, holler and thrust their arms into the air. "People tell me I look like Bean, do you know who Bean is?" Rowland asked, showing several silly photos of the English actor, famous for playing The Black Adder and mugging his facial expression. Attendees are entertained by all the madness and of course, there is method in it, as Rowland then engages them about how to make lending at credit unions exciting again.
He explains how the leading top 100 credit unions use what he called "the four Ms, which stand for measure, monitor, manage and make a mantra of the phrase, "We make loans" to boost loan-to-assets ratios. Above all, those credit unions that are the most successful at lending make is so easy for members to borrow that what is taken to be a painful process is made as painless as it can be.
"I love credit unions that have a list of goals on the wall," he said. "When I go into a vice president of lending's office and I see a chart on the wall that has goals set and measures progress over time I'm so delighted." He cited Pacific Service CU, Walnut Creek and its CEO Tom Smigielski for automating the approval process. "They automatically approve 80% of their loans online. Only 20% are actually underwritten by the credit union," Rowland said. There's no reason other credit unions can't do the same thing, he noted.
"You can automatically approve any loan for a member with a credit score of 680 or above who has seven trade lines or more. And you can underwrite anything 680 or below," he said. The reason CUs can do this is simply because the credit scoring system is so good, so reliable that it has become an accurate predictor of how members pay their obligations, said Rowland. He advised that anyone with four trade lines or fewer be eliminated, as that may indicate a fraud or use of a stolen Social Security Number.
Rowland also strongly advised making employees more involved in the process, holding regular staff meetings and in general, brainstorming sessions that free them to come up with new ideas.
"Don't forget to also ask, 'what are we doing that's stupid?' because it's not always what you're not doing that's holding you back. It could also be what you are doing!"
"Develop a lending library of books, audio tapes and videos and CD Roms that staff can borrow and tap for new ideas. Let them listen during commute time," he suggested. By letting staff know that ideas are welcomed, they are freed from fearing what they may suggest will be laughed at."
Rowland himself displayed little fear of being laughed at, inviting audience members to be playful, and they did, but they also came away with a handful of lending nuggets.