SAN FRANCISCO-Arrowhead Central Credit Union is a prime exampleof how a Credit Union Service Organization can boost a memberbusiness lending program. In 1996, Arrowhead began offering memberbusiness loans and over the next five years made $17 million inloans. After launching its CUSO, Member Business Services,Arrowhead had $19 million in business loans in just the second halfof 2001, Member Business Services CEO Steve von Rajcs explainedduring the recent Partnering and Leadership Successes workshop. By2002, there were $49 million in loans, including $13 million inparticipations, and business deposits increased by $10 million. In2003, Arrowhead added $41 million in business loans on the bookswith $1.5 million in participations and an $18 million increase indeposits. This provided the $740 million credit union a 6.5% yield.According to von Rajcs, forming the CUSO had a number ofadvantages. It helped to diversify the credit union's incomesources, diversify its portfolio and earnings, and it helped growdeposits. To run a successful member business services operation,von Rajcs recommended that credit unions offer three to fourdifferent types of checking accounts; money market, savings, and CDoptions; merchant bankcard services, payroll services; businesscheck ordering; courier, armored car, and cash vault services; andaccount analysis. On the loan side, credit unions should providereal estate loans, vehicle loans, machinery and equipment loans,lines of credit, Small Business Administration loans, and corporateVISA cards. There are definitely risks to business services aswell, von Rajcs said, so strong underwriting is crucial. The creditunion also has to be willing to commit adequate resources to theprogram, he said. Documentation software, analysis software, SBAloan software, credit bureau access and core systems to support themember business lending program are [email protected]