As credit unions become more involved in commercial lending, we knew we had to speak with Ben Rutledge, VP of Commercial Services at GESA Federal Credit Union to see how he started their CRE program. Over the past nine years, he’s grown the department to 23 employees who manage roughly $300 million dollars in commercial loans.
He shared there are three ways credit unions are breaking into the CRE industry:
- Buying participations: Smaller credit unions are buying participations from an existing lender (portion of a loan). These financial institutions still have to perform due diligence during the underwriting process.
- Broker transactional loans: Another method is to get leads directly from brokers, which are more transactional loans. With these types of loans, you don’t have to have a relationship with the borrower.
- Buying in a middle market lending groups: Finally is how GESA Federal Credit Union functions. They are a better business banking department. This means that they are buying in a middle market lending group. They handle all types of loans ranging from CRE, C&I, Production NAGGL, to SBA lending.
Since it’s been a big culture shock for their financial institution to adjust to commercial lending as a credit union, Ben stands by the mantra “plowing roads and planting seeds.” We all know changing a company’s culture can be challenging, but Ben sees it as a fun and rewarding aspect of his role.
As their team and large portfolio were growing and diversifying, the need emerged for a top appraisal management company to help with both their residential and commercial appraisal orders and reviews. In-house options were too costly, so they chose to outsource their appraisal management functions. A group of bankers from the Pacific Coast Banking School referred Ben to evaluate MountainSeed’s services.
After working with MountainSeed, the appraisal management process is more streamlined, and client-issues are being overseen by MountainSeed vs. my internal staff.
- Recently, Ben attended a Credit Union National Association (CUNA) conference, which focused on certain areas of finance and ending. He also enjoys learning about new digital channels, business intelligence, and predictive analytics to make loan decisions vs. traditional methods of using FICO scores.
- GESA Federal Credit Union is located in Richland, Washington and has been in business since 1953 as a non-profit, co-op.
- Most interesting topics you’ve been reading about lately:
- Financial technology updates such as new PIN systems
- New tech trends like blockchain and cryptocurrency