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CU System
Article highlights Minn. CUs MBL efforts
ST. PAUL, Minn. (7/19/11)--Several Minnesota credit unions are ramping up their efforts to offer member business loans (MBL) to small businesses, according to a Friday article in the Minneapolis/St. Paul Business Journal. The article’s main focus was on Spire FCU, a $523 million asset credit union based in Falcon Heights, Minn., which is bolstering its commercial lending to serve a growing desire for real estate investments. “The credit union has doubled the size of its commercial-lending team to six this year after demand for apartment buildings, duplexes and single-family rentals started picking up toward the end of 2010,” the article said. “… Spire had 53 loan requests averaging $233,000 through June, a marked increase from the 31 requests that averaged $55,000 in the same period last year,” the article continued. “The credit union closed about $1.5 million in commercial loans through June, a figure that Vice President of Business Services Cliff Wantz expects to grow significantly in the quarters ahead.” The credit union is being cautious and paying attention to the importance of borrower relationships, diversified strategies and expertise, Dan Stolz, Spire president/CEO told the Journal. “Diversification is king,” Stoltz said. “When you have a loan mix dependent solely on one product, whether it be autos or homes, if one of those takes a beating, your whole portfolio is going to take a hit.” Postal CU, a $489 million asset credit union in Woodbury, Minn., saw its commercial lending go up roughly 10% during the first two quarters of 2011 from a year earlier, Brian Sherrick, Postal executive vice president of lending member services, told the Journal. However, the credit union mostly has been reactive with business lending, getting involved in a few investment properties but not necessarily marketing the service, Sherrick added. SharePoint CU, a $169 million asset credit union based in Hopkins, Minn., has roughly $2 million in MBL outstanding, but only uses MBL to supplement its business, rather than as a central component of its portfolio, Phil Kopischke, SharePoint President/CEO, told the Journal. The Credit Union National Association (CUNA) and credit unions are asking Congress to increase credit unions’ MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.


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