5 Benefits of expanding in-house member business lending
With the National Credit Union Administration issuing its final member business lending (MBL) ruling as of January 2017, credit unions are seeing increased flexibility in their lending limits. While this newly found flexibility provides opportunities for competitive growth, the NCUA states “[MBL] has unique characteristics and more complex variables than other lending and carries a number of risks.”
In growing their MBL, credit unions may opt to outsource loan processes to CUSOs or invest in third-party solutions to keep the underwriting function in-house. Mike Ford, managing director of financial institutions at Sageworks, discusses in a Sageworks whitepaper, “As more lenders are introduced to the MBL process, a standard system for in-house business lending can save training dollars, minimize the learning curve and, most importantly, reduce risk.”
1. Uniform methodology
Using an automated software for internal credit analysis and loan review not only creates a standardized process, it makes calculations for global cash flow easy to audit and document, which paves the way to easier examinations.