CHATSWORTH, Calif. – After making member business loans for nearly 10 years and running one of the most successful wholly-owned business lending CUSOs-Telesis Partnerships Inc.- for almost five years of that time, Telesis Community Credit Union is opening the door to other credit unions for equity ownership in a newly formed full-service member business lending company called Credit Union Business Partners, LLC (CUBP). TCCU President/CEO Grace Mayo said an initial offering was extended to 10 natural person credit unions. The initial participants were selected because of their prior member business lending experience. The CUs are: Patelco CU, San Francisco, Calif.; Travis CU, Vacaville, Calif.; Lockheed FCU, Burbank, Calif.; Mountain America CU, Salt Lake City, Utah; SELCO CU, Eugene, Ore.; Orange County's CU, Santa Ana, Calif.; Public Service CU, Denver, Colo.; Xerox FCU, El Segundo, Calif.; Royal CU, Eau Claire, Wis.; and Community CU, Plano, Texas. In addition, an offering was extended to WesCorp, the California Credit Union League and CU Association of the West. Jean Faenza, executive vice president of Telesis CCU and president/CEO of TPI, said the three would act in a "future strategic capacity." "The ability to make member business loans has always been one of credit unions' biggest challenges. Even large credit unions have to deal with the 12.25% of assets cap on making member business loans. On top of that, MBLs are expensive to maintain. Still, there's been so much discussion among credit unions about how to make and service member business loans. Collectively in a CUSO-format system, we'll be able to gather more industry understanding and support and deliver technology efficiency to deliver business lending expertise. That's why it makes sense to do this through a CUSO. Together we'll be able to streamline the process," said Mayo. Telesis CCU, as well as the other equity owners in CUBP, will originate, process and fund the business loans through their respective CUSOs. CUBP will facilitate the participation and servicing of the loan. Payment for business loans will be made directly to CUBP, but it will not hold the loan. Mayo said CUBP would act as a centralized lending system with the ability to add different regions and credit unions that would "support standardized underwriting, standard documentation and standardized servicing inspection." CUBP will focus on assisting credit unions with making and servicing three types of business loans: * small business loans – Mayo offered that "there is a need to automate the small business loan platform and make it more cost-efficient." * Small Business Lending product line – the entry level process for making SBA loans is very complicated and difficult, said Mayo, and normally takes about two years to get through. "This has created an obstacle for credit unions to get really active in SBA lending," she offered * large collateralized loans. Initially, Mayo said all the member business loans would be processed at the centralized CUBP center, but down the road there are plans to open regional centers around the country to allow for the different time zones. At press time, Mayo said the structure of CUBP was "still in discussion," and that would be one of the items the charter group of owners of CUBP would take up at a meeting scheduled for September 30 at WesCorp's offices in San Dimas, Calif. "Most likely everyone will have equal equity," she said. "Our goal will be to structure CUBP in such a way as to make it easier for credit unions that are looking to first get into making member business loans, to do so, as well as support other credit unions that are already involved with the service. We want to hook up with as many credit unions as possible," Mayo said. Initially, Telesis CCU will "play a large role" in the management of CUBP, and afterwards Mayo will be on board of the new CUSO. The president of CUBP has not yet been determined. "We hope to get this all done and up and running in about eight months," said Mayo. [email protected]