It could seem that a Michigan credit union went out on a limb when it became the first CU user of a core processing platform for banks, but it all made sense. Business sense.
The $353 million Consumers Credit Union found that expanding its service to businesses was a challenge on its existing UltraData platform from Harland Financial Solutions, so it converted to Harland’s Phoenix EFE solution, now in place at about 200 banks here and overseas, the company said.
Leaving the ranks of the 500 or so users of the venerable UltraData solution for credit unions has allowed the 40,000-member CU to consolidate onto one platform the growing range of business-oriented solutions. And that has helped it grow its business portfolio to nearly $40 million, manage participated and Small Business Administration loans and stay nearly 100% loaned out as it stays close to its regulatory cap and returns to double-digit asset growth, said Scott Sylvester, Consumers’ chief operating officer.
"We’re a pretty diversified credit union with a portfolio that’s maybe more similar to a community bank," Sylvester said. "We do a lot of first residential mortgages and sell a lot to Fannie Mae and the others, and we also do a lot of business real estate. We were just running into a lot of challenges with integration of all the lending and servicing products we were using."
So in 2007, Consumers and a couple other credit unions began discussing alternatives with Harland, and a couple years later, Consumers became the first to go live on the Phoenix EFE platform. It’s since been joined by the $900 million Dupaco Community CU in Dubuque, Iowa.
"We formed a group of pilot credit unions and worked through a prioritization process of their needs and capabilities they would have to have to adapt the Phoenix EFE platform to the credit union marketplace. They helped refine this product to fit their requirements," said Tom Berdan, vice president of product management for enterprise solutions at Lake Mary, Fla.-based Harland.
Berdan added that the UltraData platform does have business capabilities of its own and "continues to meet the needs of traditional credit unions, some of them who’ve been running it for 20-plus years" but that Harland will soon begin marketing the Phoenix platform to credit unions whose strategy includes extensive use of SBA and participated loans and a need for a single view of a member relationship across multiple personal and business channels.
One competitive advantage includes the ability to handle commercial real estate and operating lines deals that big banks snub and community banks go after, while at the same time bringing in other credit unions as participants in the larger deals.
"A good example is how we were able to do a $3 million real estate and asset loan for a local lawn and garden company that does very well. We might not be comfortable having that completely on our books so we shared it with several other credit unions. That way we were able to keep our relationship with that member as his business grew and we were able to keep it within the credit union community while spreading the risk," Sylvester said.