Seven Credit Unions Latest Pennsylvanians to Form Business Lending CUSO
PHILADELPHIA --Pennsylvania has quickly become a launching pad for business lending credit union service organizations. This time, seven credit unions here recently joined forces to create Member Business Financial Services LLC.
Opened for business in early April, the CUSO is owned by American Heritage FCU, People First FCU, Choice One Community FCU, Service 1st FCU, Eagle One FCU, Keystone FCU and Viriva Community CU. In addition to participation loans, loan processing, underwriting and servicing, Member Business Financial Services will train credit unions on the business depository side, said Bruce Foulke, president/CEO of American Heritage. Loans in the $150,000 to $250,000 range will be the target spot for Member Business Financial Services.
This latest CUSO debut is one of several that have sprung up in Pennsylvania over the past few years. Philadelphia Federal Credit Union and the Credit Union of New Jersey formed East Coast Business Lenders LLC in 2006. The state is also home to Keystone Business Lending Solutions LLC, CU BizSource LLC and the Pennsylvania Credit Union Association's Business Advisory Services.
Foulke said there were discussions about aligning with an established CUSO, but all the credit unions agreed that they could bring something timely to the industry.
"Especially with margin compressions now on return on assets, we felt it would better to have a CUSO that could offer economies of scale and future income stream," Foulke said.
Both American Heritage and Service First had previous experience with business lending. For at least the past eight years, American Heritage's wholly owned mortgage CUSO has offered a variety of loans to 25 Pennsylvania credit unions, Foulke said.
Scott Webster, a 25-year commercial lending veteran and former banker, has been hired as the chief executive officer of the new CUSO. His staff includes a financial analyst and an administrative assistant. The office will be located in one of American Heritage's branches. Computer system installations are in the final stages and services are expected to be offered on a wider scale within 90 days.
"I think the expertise sets us apart. It was one of the important things we were looking for," Foulke said, adding once up and running, the CUSO will look to partner with other credit unions.