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WASHINGTON – Customization of member business services can lead to more and happier members. CU Business Group CEO Larry Middleman just spent much of a half-day seminar in Albany last week explaining customizing and packaging. The “bare bones” a credit union should have for a member business services program includes conventional lending products, like real estate loans; deposit products such as checking and money market accounts; merchant bankcards; and online banking. “You have to have online access. Credit union systems are OK but certainly not ideal from a business standpoint,” Middleman said. Then the credit union should begin “layering” other products around that, including electronic tax payments and automated clearinghouse origination. Though ACH origination is not all that popular among credit unions now, it is up and coming, Middleman predicted. “I think it’s the fastest growing product that businesses will accept and adopt and utilize for their business,” he said. However, it does require additional expertise, he cautioned. Additionally, Middleman said he sees Small Business Administration lending “as a nice enhancement to a member business lending package.” Credit unions may not want to start out doing SBA lending because it is complicated, but it is a “nice add-on.” After 18 months in business, CU Business Group plans to roll out its SBA services any time now as soon as they receive the final word from SBA. They already have three senior lending officers on board with extensive SBA experience. CU Business Group consults for 53 credit unions in 12 states, helping them through the member business services rollercoaster. To aid credit unions through this journey, they listen to credit unions and what they want from their business services program, Middleman said, then tailor a package for the credit union. Moving down the line, CU Business Group also helps its credit unions put together a methodology tailor its packages, and set up a sales campaign. Middleman warned that credit unions should not customize too much for their members. “You don’t want 50 businesses with 50 different packages,” he said. Dupaco Community Credit Union has been involved in business lending for 17 years now and has a $70 million portfolio, according to CEO Bob Hoefer. “We have something at our credit union called `relationship pricing,’” he explained. For example, four people who own a pizza parlor and have their personal accounts with the credit union might receive discounted or free services like checking, cash and currency or online banking. Loans are another story, Hoefer said, adding, “Loan rates are basically all competitively priced.” Six new banks have opened in the area in last four-and-a-half years serving a population of just 65,000. But the competition has not scared Dupaco Community CU from business services. “We always have goals included in our corporate plan going forward,” Hoefer explained. Currently, the credit union is so busy they are at 250% of goal already for the year and business lending is driving its loans outstanding. Successful business lending can also lead to other opportunities for credit unions. Hoefer said the credit union now offers trust services partially due to its business side and you may gain personal accounts or even another select employee group. Another plus to business services, particularly for community credit unions Hoefer said, is it helps serve the credit union’s mission. “This completes the circle of cooperation in our community.As a mission, this completes the full service package,” he said. The CEO explained that Dupaco can now fully serve its members from cradle to death. Business services also helps the credit unions reputation in the eyes of community by providing money to help create jobs and bring in additional sales tax through those businesses. “I can’t see being a community credit union and not doing this,” Hoefer said, adding that it “creates an economy of well-being in the community.” Community Credit Union Vice President and Director of Business Services LeeAnn Stamm agreed. “We’re in the Dallas-Plano suburb area. There are a lot of small businesses out here,” she explained. Without serving them, Community Credit Union, which has offered business loans for 20 years but began its business services department in 2001, would not be fulfilling its mission of serving the entire community. Community CU holds accounts for about 5,000 businesses presently. According to Judy Parsons from the credit union’s marketing department, the credit union tailors its business marketing efforts to target audiences, like readers of the Dallas Business Journal, as it customizes its products. Business services representatives from Community CU really listen to the member-small business owners to get a good idea of what they are looking for from a financial services provider. [email protected]

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