Latest / Leaders in Lending / Credit Unions in Transition: Evolving Mortgage Origination, Auto Lending, and AI Futures

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Credit Unions in Transition: Evolving Mortgage Origination, Auto Lending, and AI Futures · Leaders in Lending

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  Speaker 1: You're listening to Leaders in Lending from Upstart, a podcast
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  Speaker 1: dedicated to helping consumer lenders grow their programs and improve
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  Speaker 1: their product offerings. Each week, here, decision makers in the
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  Speaker 1: finance industry offer insights into the future of the lending industry,
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  Speaker 1: best practices around digital transformation, and more. Let's get into
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  Speaker 1: the show.
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  Speaker 2: Hello, and welcome to another episode of Leaders in Lending.
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  Speaker 2: I'm your host Drew Megree, joined today by Rick Moore,
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  Speaker 2: the chief lending officer at Main Savings Credit Union. Rick,
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  Speaker 2: Welcome to the podcast and thank you for making the
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  Speaker 2: time to join me today.
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  Speaker 3: Hey Drew, and thank you very much for inviting me
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  Speaker 3: to your podcast. It's great to have a partner like
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  Speaker 3: Upstart that takes the relationship to this next level. The
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  Speaker 3: work that you do is very important to many of
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  Speaker 3: us in the industry, so thank you for what you
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  Speaker 3: do and keep up.
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  Speaker 1: With good work.
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  Speaker 2: Thanks Rick. I always find this opening topic very interesting
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  Speaker 2: with each guest, because there, of course is many different paths.
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  Speaker 2: Right With that said, as I typically do, Rick, I'd
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  Speaker 2: like to start off our conversation by giving the listeners,
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  Speaker 2: you know, your path to what got you into the
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  Speaker 2: financial services space and what did that journey to becoming
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  Speaker 2: the chief lending officer at Main Savings look like well.
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  Speaker 3: I have to say, Drew that my career journey that
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  Speaker 3: spans almost thirty nine years now at Main Savings is
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  Speaker 3: something I've privileged to share in staff meetings across our
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  Speaker 3: branch network. While and doublegent on this opportunity, I recognize
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  Speaker 3: that some of this may not be as exciting to
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  Speaker 3: you and your listeners, but many of our staff at
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  Speaker 3: Main Savings has commented on how they enjoy some of
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  Speaker 3: the history of the crediting that I've been privileged to experience.
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  Speaker 3: I'll spare your audience a lot of the specific events
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  Speaker 3: that make my story relevant to our staff, but really
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  Speaker 3: it all starts four years before I was born. In
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  Speaker 3: nineteen sixty one, my father in law was in the
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  Speaker 3: railroad yard of the local railroad company and the founder
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  Speaker 3: of the credit union come up to him asking and
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  Speaker 3: if you if you'd like to join a credit union
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  Speaker 3: starting new ving so cooperative. My father in law didn't
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  Speaker 3: understand all of those that that meant to him, but
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  Speaker 3: he put his twenty five cents in and became one
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  Speaker 3: of the charter members of the credit union. I'd have
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  Speaker 3: to say that. At the beginning of my career with
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  Speaker 3: Main Savings, it was a thrill to be part of
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  Speaker 3: a legacy from my father in law, who then shortly
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  Speaker 3: thereafter started talking about how he would go to the
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  Speaker 3: founder's table kitchen table and talk about borrowing funds for
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  Speaker 3: a loan. It may have been like a three or
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  Speaker 3: five hundred dollars, and the CEO ways say at that point,
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  Speaker 3: I'm sorry, I don't we don't have the money right
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  Speaker 3: now to lend you three hundred dollars. We're not big enough.
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  Speaker 3: People have to make a few more payments. So he'll
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  Speaker 3: come back in another week or so and I'm sure
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  Speaker 3: we'll have that money available for you. So he remembers
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  Speaker 3: those days of old when the credit union is just
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  Speaker 3: starting out in the atink around the kitchen table of
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  Speaker 3: the original CEO. So that kind of history is fascinating
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  Speaker 3: to me, and watched it grow to where it's been.
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  Speaker 3: Where's his nay? Yeah. So in nineteen eighty six is
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  Speaker 3: when I really started with Main Savings. I started as
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  Speaker 3: the loan and collection officer at one branch, eight employees
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  Speaker 3: and about twenty million dollars in assets. One of the
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  Speaker 3: things I really specifically remember in nineteen eighty six was
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  Speaker 3: that we actually started our credit card program back then,
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  Speaker 3: And I just recently found out the last couple of
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  Speaker 3: years that nineteen eighty six is really when credit cards
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  Speaker 3: came to credit unions. So it was an interesting learning
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  Speaker 3: curve to figure out what credit cards means to us.
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  Speaker 3: So as the lender and the collector, I found out
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  Speaker 3: really quickly that I not only married them, I buried them.
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  Speaker 3: So I did the collection part of the process on
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  Speaker 3: a daily basis as well as due the lending, So
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  Speaker 3: I was involved with repossessions, forclosures, the hard stuff. But
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  Speaker 3: over the years, I've really kept the mantra that bad
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  Speaker 3: things happen to good people, and I know that that's
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  Speaker 3: really what the aspect we all need to keep in mind.
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  Speaker 3: But with my experience in the collection area, it almost
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  Speaker 3: makes me want to think that the first year of
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  Speaker 3: every lender probably should have training in collections. If they
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  Speaker 3: knew how to collect these loans, they'd probably be a
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  Speaker 3: much better interviewer, much better lender, and understand the reasons
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  Speaker 3: why collateral is really collateral only when you get it perfected.
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  Speaker 3: So it's one of those areas I think is really important.
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  Speaker 3: But from that point it became the branch manager of
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  Speaker 3: that original branch, but convinced the CEO to start a
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  Speaker 3: new branch in my hometown. I was about twenty five
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  Speaker 3: miles away, and he says, that sounds like a great idea.
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  Speaker 1: Rick.
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  Speaker 3: What we need to do is you need to develop segs.
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  Speaker 3: So it gave me that experience of going out and
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  Speaker 3: gathering I think it was a to forty new segs.
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  Speaker 3: They were churches, Snowville clubs, small businesses. And we opened
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  Speaker 3: that branch successfully and there I became the branch manager
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  Speaker 3: for twelve years. It was such a rewarding experience to
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  Speaker 3: be the active manager in the town where I lived.
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  Speaker 3: Although a trip to the store could often take way
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  Speaker 3: more time than I expected, and my wife was pretty
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  Speaker 3: much knew that if I didn't come back soon, I
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  Speaker 3: was probably caught up of the mouth talking to somebody
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  Speaker 3: about business, which she fully understood. It was really during
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  Speaker 3: that time that I fell in love with mortgage lending.
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  Speaker 3: That thrill of helping that first time home buyer get
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  Speaker 3: their first home. The opposite of the American dream is
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  Speaker 3: to own your own home. We were fully engaged in
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  Speaker 3: do a mortgage lending Back then, our new CEO was
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  Speaker 3: very much a mortgage lender, and we took off very
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  Speaker 3: quickly with mortgage lending. It was very rewarding, but it
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  Speaker 3: took its time that the CEO saw something in me,
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  Speaker 3: and in two thousand he asked me to become part
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  Speaker 3: of the admin team in the main office and turn
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  Speaker 3: it changed to the hand office, and he wanted me
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  Speaker 3: to become the leader director of the lending area at
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  Speaker 3: the credit union. This is where it was really exposed
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  Speaker 3: more to the business lending. We'd done some business lending,
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  Speaker 3: but we're really taking off at that point, and my
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  Speaker 3: expertise became more broadened and the slow growth of business
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  Speaker 3: lending was really fascinating over the next several years. At
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  Speaker 3: this time, I remained very connected with Collections. I was
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  Speaker 3: always the one that they would call upon, even though
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  Speaker 3: I wasn't part of that team. They always wanted to
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  Speaker 3: call on me from my experience with the mortgage area
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  Speaker 3: or repossession. So it was always a good thing to
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  Speaker 3: keep that connection there, and obviously now as the VP
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  Speaker 3: of lending, that was part of what I oversaw on
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  Speaker 3: a daily basis. Over the next five year years, I
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  Speaker 3: earned a spot on the senior leadership team, which led
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  Speaker 3: me to the senior vice president of lending position. Last year,
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  Speaker 3: my title was officially updated from with part of the
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  Speaker 3: senior team as part of the C suite as the
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  Speaker 3: chief Lending Officer. It's been an amazing journey as we
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  Speaker 3: find ourselves at almost eight hundred million dollars in assets
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  Speaker 3: and eleven branches. I'm thankful for the opportunity and the
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  Speaker 3: people that gave me those opportunities throughout the year to
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  Speaker 3: be a leader that i've become today. I always try
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  Speaker 3: to tell my staff, I try to empower them so
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  Speaker 3: that they could make me look better, and that's always
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  Speaker 3: a good thing, right. So I appreciate the opportunity to
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  Speaker 3: tell my story, the abbreviated story, and a little bit
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  Speaker 3: about the credit union history, because I believe that's probably
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  Speaker 3: one of the things that the credit unions don't tell
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  Speaker 3: very well, is their story. So with this type of
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  Speaker 3: a podcast, it's great to be able to have that
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  Speaker 3: option to tell the story of main savings. I hope
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  Speaker 3: that the fish what you're looking for through it does.
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  Speaker 2: That's awesome. That's a in reflecting back on that, it
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  Speaker 2: sounds like you were destined to be in the financial
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  Speaker 2: services space then, of course, you know, sitting at the
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  Speaker 2: at the dinner table with your your dad talking about
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  Speaker 2: lending at such a young age, of course you were
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  Speaker 2: you were destined, of course to be in the credit
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  Speaker 2: union space. One thing I do want to touch base
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  Speaker 2: though on is you know, you had a very elongated
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  Speaker 2: period there of working your way up and a lot
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  Speaker 2: of growth within Main Savings over the years. But let's
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  Speaker 2: rewind back to you know something that you brought up
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  Speaker 2: of your love of mortgage. So to frame up our
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  Speaker 2: first topic about thirty one short years ago, and Rick,
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  Speaker 2: I would assume you were a part of this Main
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  Speaker 2: Savings and six other credit unions founded a mortgage QSO
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  Speaker 2: And for the listeners that don't know, QSO is an
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  Speaker 2: acronym for credit union service Organization in that QSO today
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  Speaker 2: is now the largest credit union owned mortgage lender in
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  Speaker 2: the state of Maine, in one of the top five
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  Speaker 2: largest multi owned QSOs within the US. SO, mortgage lending
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  Speaker 2: in Maine is big, but let's dig into it from
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  Speaker 2: the opposite direction, rick So. A lot of our past
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  Speaker 2: guests have discussed, you know, their excitement about the transformation
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  Speaker 2: of lending and what they're doing in the space, which
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  Speaker 2: of course we'll get to later on, but I wanted
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  Speaker 2: to start by diving into a point you made when
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  Speaker 2: we first met Rick, which is a part of lending,
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  Speaker 2: particularly mortgage lending. To be exact, that's not exciting you
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  Speaker 2: right now. Can you talk a bit about why your
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  Speaker 2: premonition that the mortgage origination space in the short term
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  Speaker 2: isn't exciting you like it once did.
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  Speaker 3: Yeah, that's a really good point, you know. Like you said,
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  Speaker 3: we have our one of the leaders in the state
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  Speaker 3: or mortgage lending, have been for many, many years. It
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  Speaker 3: seems very different. Over the last eighteen months or so,
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  Speaker 3: we've seen our production go from very strong both in
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  Speaker 3: the refinance and the purchase markets, but tampered off significantly
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  Speaker 3: as we continue to experience the prices of homes have
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  Speaker 3: climbed dramatically, but with a lower rate environment, we saw
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  Speaker 3: home purchases remain affordable but strained. In the last eighteen months,
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  Speaker 3: the increases and interest rates have all but pus stop
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  Speaker 3: to the refinanced business, which was great great business. In addition,
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  Speaker 3: home prices continued to increase with very low inventory, so
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  Speaker 3: times for homes in the market dwindled with many homes
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  Speaker 3: selling the thousands over asking price, and we've actually saw
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  Speaker 3: a lot of bidding wars taking place during COVID. It
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  Speaker 3: was amazing how many people came to the state of
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  Speaker 3: Maine because they wanted to get out of the big cities.
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  Speaker 3: They were buying houses unseen. They were just taking them
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  Speaker 3: off the market paying ridiculous prices, which through the market
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  Speaker 3: a significant upspin for purchase prices. But it was an
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  Speaker 3: interesting time. So it certainly does divest our relationships in
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  Speaker 3: the state, but we're interested to see what the next
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  Speaker 3: process is going to look like. But what this whole
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  Speaker 3: process has done, as I've taken our affordability from over
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  Speaker 3: sixty percent of our first time home buyers to approximately
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  Speaker 3: thirty percent of our first time home buyers, most of
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  Speaker 3: our kids, including my son, are forced to stay at
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  Speaker 3: home and live with mom and dad. You know, it
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  Speaker 3: was a welcome trend. We started seeing mortgage rates heading
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  Speaker 3: towards eight percent, as now is relaxed and significantly lowered
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  Speaker 3: closer to the six percent range. It is also interesting
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  Speaker 3: that over the last sixty days, we've been hearing from
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  Speaker 3: our realtors that there's actually the no offers for thirty
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  Speaker 3: days has become a statistic. Again, Prior to that, there
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  Speaker 3: was offers happening the same day. Certainly in the same week,
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  Speaker 3: we're not seeing more homes on the market. While we're
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  Speaker 3: as good for origination and mortgages, it will certainly have
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  Speaker 3: a negative impact on prices. The supply and demand will
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  Speaker 3: eventually bring home prices down a little. However, with many
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  Speaker 3: people sitting on their three percent or less mortgage rates,
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  Speaker 3: we'll see continued reluctance to sell and to easily double
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  Speaker 3: their interest rate costs if they were to buy a
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  Speaker 3: different home. This will certainly keep the volumes of purchases
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  Speaker 3: a little lower than the boon times of housing turnover
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  Speaker 3: that we saw in the previous five to six years.
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  Speaker 2: Yeah, I am fortunate enough to sit in that cohort
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  Speaker 2: that is going to stay at home given the sub
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  Speaker 2: three percent mortgage refi during the during the COVID times.
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  Speaker 2: But let's touch on some statistics here that kind of
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  Speaker 2: point to your point. There is as of last month,
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  Speaker 2: of course, home prices nationwide, not just particular particularly to Maine,
• 13:03
  Speaker 2: are up three percent year over year. The number of
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  Speaker 2: homes sold have decreased by roughly four percent, and shockingly,
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  Speaker 2: the number of homes for sale have risen I don't know,
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  Speaker 2: roughly sixteen percent or so. So let's talk about mortgage
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  Speaker 2: lending getting exciting. We both know that we're probably within
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  Speaker 2: our careers, Rick not going to see mortgage rates where
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  Speaker 2: they were in twenty twenty and twenty twenty one, given
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  Speaker 2: the rates that were in the environment during COVID, but
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  Speaker 2: with more rate cuts on the horizon, the increasing supply
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  Speaker 2: of homes, what does a path to excitement in this
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  Speaker 2: space look like for you?
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  Speaker 3: I think really looking to those statistics to gather gain
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  Speaker 3: more momentum. I do see that, like you said, there
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  Speaker 3: are more houses for sale, which is great. Hopefully we'll
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  Speaker 3: see those things, say the continue on in our area.
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  Speaker 3: Mortgage rates coming down just posted a six percent. It's
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  Speaker 3: starting to get a little more excitement in our mortgage lenders.
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  Speaker 3: We're actually starting to see our pipeline grow significantly. Oh
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  Speaker 3: that's growing a bout the millions of dollars at this point,
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  Speaker 3: So we're seeing that excitement start. It's at the time
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  Speaker 3: of the year, we're at the end of the season
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  Speaker 3: that's not typical, so it's obviously having some impact on
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  Speaker 3: the buyers in the market today, which is exciting to
• 14:23
  Speaker 3: see us as we carry through the winter months when
• 14:26
  Speaker 3: it's usually slower. Anyways, with this new trend, it's starting
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  Speaker 3: to get a little bit more of that excitement back
• 14:33
  Speaker 3: in the heels of our mortgage lenders.
• 14:35
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• 15:28
  Speaker 2: Something we've of course talked about here is supplies up right,
• 15:32
  Speaker 2: Demand however, is down year over year six percent. I'm
• 15:37
  Speaker 2: interested to get your take on why is supply up
• 15:40
  Speaker 2: but demand continues to be down. Do you think it's
• 15:42
  Speaker 2: a rent versus own or is it a thing of
• 15:46
  Speaker 2: kids coming out of college into the workplace just can't
• 15:50
  Speaker 2: afford the homes and all that it entails, such as
• 15:53
  Speaker 2: insurance and the cost to maintain a home. Or what's
• 15:55
  Speaker 2: your take on why is supply up but demand continues
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  Speaker 2: to fall?
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  Speaker 3: Well, I think you touched on a lot of the
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  Speaker 3: real reasons why people aren't buying. First of all, the
• 16:05
  Speaker 3: prices are still up. Prices are still you know, national
• 16:09
  Speaker 3: statistics say that prices are still climbing. I think that's
• 16:13
  Speaker 3: a lot of not looking as close to the real
• 16:18
  Speaker 3: action that's taking place. While those numbers are still wagging
• 16:22
  Speaker 3: a little bit, we're seeing prices have started to level
• 16:26
  Speaker 3: off and even seen a little bit of tick downward
• 16:29
  Speaker 3: in some areas. So that is helpful. But certainly, you
• 16:33
  Speaker 3: know there's people graduating from college there, They've got a
• 16:37
  Speaker 3: lot of student debt. It's it's almost a second mortgage
• 16:41
  Speaker 3: in itself that's really keeping some of those on the sidelines.
• 16:45
  Speaker 3: Interest rates still while at six percent better than eight percent,
• 16:50
  Speaker 3: is maybe a lot of people are waiting for Oh,
• 16:54
  Speaker 3: Raychi're gonna come down. Rachire going to come down. We're there.
• 16:56
  Speaker 3: They're hoping for that. The economics are still pretty strong,
• 17:01
  Speaker 3: The unemployment rate is still low. It's ticked down a
• 17:04
  Speaker 3: little bit further over the last couple of days. So
• 17:06
  Speaker 3: those things are really helping to boost, you know, consumer confidence,
• 17:10
  Speaker 3: and I see that that is something that's going to
• 17:12
  Speaker 3: continue to help hopefully gather some more momentum. See the
• 17:16
  Speaker 3: rates maybe decline a little bit further, maybe see a
• 17:20
  Speaker 3: little bit of reduction in prices. As people are keeping
• 17:23
  Speaker 3: their houses on the market a little bit longer, they
• 17:26
  Speaker 3: maybe want to reduce their prices. So I think we're
• 17:29
  Speaker 3: hopefully poised to see some uptick in purchases over the
• 17:33
  Speaker 3: next six to twelve months.
• 17:35
  Speaker 2: Yeah, I agree with you, it's probably not going to
• 17:37
  Speaker 2: be at a large capacity. So to touch further on that,
• 17:41
  Speaker 2: let's let's reflect on the borrowers that, to your point,
• 17:45
  Speaker 2: are sitting at a sub three percent mortgage rate. What
• 17:50
  Speaker 2: do you think the mortgage industry is going to do
• 17:52
  Speaker 2: from a helock perspective, as we could potentially see another
• 17:55
  Speaker 2: two hundred basis point decline by the FED over the
• 17:58
  Speaker 2: next you know, let's call it twelve month answer. So,
• 18:00
  Speaker 2: do you think that helock space is going to continue
• 18:02
  Speaker 2: to catapult as it has been over the last twelve
• 18:05
  Speaker 2: eighteen months, or do you think there's going to be
• 18:09
  Speaker 2: more individuals using the equity in their home for a
• 18:12
  Speaker 2: cash out an extending term and increasing their rate potentially.
• 18:17
  Speaker 3: Well, we see the needs and the demands for home
• 18:20
  Speaker 3: equity lending just to be outpacing any other year. There's
• 18:25
  Speaker 3: a lot of people sitting on a lot of equity.
• 18:28
  Speaker 3: With the again values going up, people are using their
• 18:31
  Speaker 3: equities for many things. They are again stuck at that
• 18:35
  Speaker 3: three or sub three percent mortgage race, so they're not
• 18:38
  Speaker 3: going to refinance to be able to put on that
• 18:41
  Speaker 3: new addition. They're going to do a home equity and
• 18:43
  Speaker 3: that's what we're seeing a lot of. We're actually seeing
• 18:46
  Speaker 3: a lot of people taking advantage of their home equities
• 18:49
  Speaker 3: and buying other properties. So we're seeing a second home
• 18:53
  Speaker 3: or a seasonal camp or cottage on the lake. We're
• 18:56
  Speaker 3: seeing that continue to be striving factor. And what we
• 19:00
  Speaker 3: see on a daily basis. I don't see that's going
• 19:03
  Speaker 3: to lower any demand anytime soon, as a lot of
• 19:06
  Speaker 3: people are sitting on trillions of dollars in equity and
• 19:09
  Speaker 3: we're seeing a lot of activity on a daily basis.
• 19:12
  Speaker 2: Yeah, I would agree with that. That is the same
• 19:15
  Speaker 2: type of conversation that I hear across the industry. So
• 19:18
  Speaker 2: it'll be interesting to see the change of pace of
• 19:22
  Speaker 2: how the mortgage industry moves forward here in the next
• 19:26
  Speaker 2: few months. So let's fast forward. We've talked a lot
• 19:29
  Speaker 2: about mortgage ricks. As you and I both know, mortgages,
• 19:32
  Speaker 2: of course, are one of the largest portions of most
• 19:36
  Speaker 2: financial institutions balance sheet, and for credit unions it's right
• 19:39
  Speaker 2: around that forty or fifty percent range or so. But
• 19:43
  Speaker 2: with your notion of a decline in mortgage originations in
• 19:46
  Speaker 2: the short term, what is main savings plans to leverage
• 19:50
  Speaker 2: or augment the balance sheet going forward with that decline?
• 19:54
  Speaker 3: Yeah, I know, Drew. We are seeing that that hit
• 19:57
  Speaker 3: our balance sheet with the mortgages and not having the
• 20:00
  Speaker 3: origination so that people are still paying off, still moving,
• 20:04
  Speaker 3: so we're seeing that balance is going down, So we're
• 20:06
  Speaker 3: looking at other options, and that is one of the
• 20:09
  Speaker 3: bigger areas that where we found a great benefit from
• 20:13
  Speaker 3: when we started a referral program from local car dealerships.
• 20:18
  Speaker 3: It wasn't intentional. We obviously didn't have the old golden
• 20:22
  Speaker 3: rule apply for us that we saw what was happening
• 20:26
  Speaker 3: that far ahead, but we started getting a lot of
• 20:29
  Speaker 3: local dealers who wanted to work with us. We've never
• 20:32
  Speaker 3: been and now don't have the intentions to become an
• 20:35
  Speaker 3: indirect lending shop. But these small dealerships have given us
• 20:38
  Speaker 3: plenty of referrals and we don't pay them any dealer
• 20:41
  Speaker 3: reserves or referral fees, so it works well for us.
• 20:45
  Speaker 3: Their thrilled to be able to have the fast and
• 20:47
  Speaker 3: consistent decisions for their buyers. It has been so beneficial
• 20:51
  Speaker 3: that the original referral dealers that we had spread the
• 20:55
  Speaker 3: word throughout our local branch areas. This has continued to
• 20:59
  Speaker 3: grow that part of our business. Over the last two
• 21:02
  Speaker 3: or three years. We have seen our auto balances grow
• 21:04
  Speaker 3: fifteen to eighteen percent each year just from the small
• 21:09
  Speaker 3: organic growth from these small dealers with their small relationships
• 21:14
  Speaker 3: with that they've developed with us. It's been very beneficial
• 21:17
  Speaker 3: for us.
• 21:18
  Speaker 2: That's awesome and one quick question off of that too,
• 21:21
  Speaker 2: is you mentioned you don't do indirect lending, but this
• 21:25
  Speaker 2: is somewhat in a sense, some type of indirecting. Of course,
• 21:28
  Speaker 2: you don't have the cost associated with with what comes
• 21:31
  Speaker 2: from from indirect lending. Do you have any insights for
• 21:35
  Speaker 2: our credit union and bank listeners that are also not
• 21:38
  Speaker 2: in indirect lending today on the best go to market
• 21:41
  Speaker 2: strategy to leverage this asset without managing those dealer partnerships.
• 21:46
  Speaker 3: Well, certainly they have to have the ability to pivot
• 21:50
  Speaker 3: quickly and be able to make sure that that the
• 21:53
  Speaker 3: borrowers and the lenders are always on the same page.
• 21:57
  Speaker 3: You know, the dealership relationship is something that has been
• 22:01
  Speaker 3: very beneficial for us, but also for our members. They
• 22:05
  Speaker 3: are looking for those little bit lower priced vehicles that
• 22:08
  Speaker 3: they can't get the big dealers, those big deals that
• 22:11
  Speaker 3: have the higher overhead. So these small dealers have really
• 22:15
  Speaker 3: been a huge benefit for our members as well as
• 22:19
  Speaker 3: for us. So keep your eyes open for those type
• 22:23
  Speaker 3: of relationships that can benefit not only you as a
• 22:26
  Speaker 3: credit union or a small community bank, but they can
• 22:29
  Speaker 3: help your constituents, your members, your customers be able to
• 22:32
  Speaker 3: get a better deal. Obviously, be careful there are a
• 22:36
  Speaker 3: lot of small dealers out there who maybe not selling
• 22:39
  Speaker 3: the best quality of vehicles. So we've had to take
• 22:44
  Speaker 3: our stance with a few of those that think that
• 22:46
  Speaker 3: they're going to make a couple extra thousand bucks on
• 22:49
  Speaker 3: a not such good quality vehicles. So just one of
• 22:51
  Speaker 3: those things to be watchful for, watch those times for
• 22:55
  Speaker 3: the title applications not being processed properly and quickly by
• 22:59
  Speaker 3: those dealers. But it's been really a great eye opening
• 23:03
  Speaker 3: relationship we've been developing, and it's been very beneficial for
• 23:06
  Speaker 3: again the credit Union and our members.
• 23:10
  Speaker 2: That's great. Thanks, Thanks Rick. So we've talked a lot
• 23:13
  Speaker 2: about secured assets, mortgages, automobiles, a lot of the types
• 23:18
  Speaker 2: of loans that most financial institutions of course want to
• 23:21
  Speaker 2: put on their balance sheet. But with the decline in
• 23:24
  Speaker 2: originations of course to mortgages and then of course the
• 23:28
  Speaker 2: smaller dealer network that you're leveraging today, how do you
• 23:32
  Speaker 2: think about the secured versus unsecured diversification in the current
• 23:37
  Speaker 2: environment and in the future environment as the macro begins
• 23:40
  Speaker 2: to stabilize, to leverage your balance sheet from a return perspective.
• 23:44
  Speaker 3: Well, you hit a good spot in our balance sheet.
• 23:47
  Speaker 3: We definitely need that diversification. We need those higher yielding loans.
• 23:53
  Speaker 3: This means the focus on unsecured loans and credit cards
• 23:57
  Speaker 3: has increased. We've seen a significant growth in our secured
• 24:00
  Speaker 3: balances with the help of Upstart. Certainly, our partnership has
• 24:03
  Speaker 3: been very beneficial to us. It allowed us to grow
• 24:07
  Speaker 3: that business with good yields, as well as the confidence
• 24:10
  Speaker 3: and the expertise of the Upstart decision matrix. While we
• 24:14
  Speaker 3: limit the production to only a million dollars a month,
• 24:16
  Speaker 3: we've certainly seen a steady growth of our unsecured balances
• 24:20
  Speaker 3: that has sped that portion of our very hungry balance sheet.
• 24:25
  Speaker 3: At the same time, we continue to work on our
• 24:27
  Speaker 3: credit card vendor to increase limits or offer those special
• 24:32
  Speaker 3: transfer balance promos. As strange as it sounds, every time
• 24:36
  Speaker 3: we offer one of those balanced transfers, we see eighty
• 24:40
  Speaker 3: to ninety percent of those balances stay after the promotion.
• 24:44
  Speaker 3: I think we can probably, I'm pretty sure we can
• 24:47
  Speaker 3: attribute that the fact that we are a local service
• 24:51
  Speaker 3: credit union. We service all of our credit cards ourselves,
• 24:54
  Speaker 3: and that really stands out to our borrowers linking at
• 24:58
  Speaker 3: local professional heal help when they need it and they
• 25:02
  Speaker 3: know they talking to their credit union. So I think
• 25:04
  Speaker 3: that that has helped retain again that eighties and ninety
• 25:07
  Speaker 3: percent that we've always gathered from each of those promotions.
• 25:09
  Speaker 3: We run awesome.
• 25:11
  Speaker 2: So mortgage lending is decreasing in the short term, we're
• 25:15
  Speaker 2: going to juice things up from an auto perspective, and
• 25:19
  Speaker 2: of course we're going to need to maintain some type
• 25:21
  Speaker 2: of diversification, so the balance sheet is maximizing your your return.
• 25:26
  Speaker 2: I think I summed up our conversation here pretty well.
• 25:30
  Speaker 1: Rick.
• 25:31
  Speaker 2: As you know, I always like to close the podcast
• 25:34
  Speaker 2: out with three questions, so I'll just go rapid fire here.
• 25:38
  Speaker 2: What is the latest and greatest app or technology gadget
• 25:42
  Speaker 2: that you absolutely cannot live without.
• 25:45
  Speaker 3: That's a great question. I really like technology and gadgets,
• 25:50
  Speaker 3: but the thoughts I had was not towards the highest tech,
• 25:54
  Speaker 3: but for something that makes my life easier. That's what
• 25:57
  Speaker 3: I concentrated on. With the business of our life. I'm
• 26:00
  Speaker 3: really falling in love with that fresh food delivery on
• 26:03
  Speaker 3: a weekly basis. So take us away from our talk
• 26:06
  Speaker 3: on finance, and I happen to use a company called
• 26:10
  Speaker 3: Hungary Root, which referred to me by my CEO with
• 26:14
  Speaker 3: two food allergies. It's the only fresh food delivery service
• 26:19
  Speaker 3: that would accommodate for both of those issues. I don't
• 26:22
  Speaker 3: do many food have any food issues, so just to
• 26:27
  Speaker 3: fund the convenience of getting a variety of foods with
• 26:31
  Speaker 3: average prep time starting for around fifteen minutes to be amazing.
• 26:35
  Speaker 3: On top of that, the amount of food waste is
• 26:38
  Speaker 3: almost eliminated that I don't have to stop at the
• 26:41
  Speaker 3: store three or four times a week. I don't know
• 26:43
  Speaker 3: about you, but simplifying this part of my life has
• 26:46
  Speaker 3: been very liberating.
• 26:49
  Speaker 2: I'm right there with you. I am guilty. I am
• 26:51
  Speaker 2: not an expertee or an expert in the kitchen. I'll
• 26:55
  Speaker 2: plug Hello Fresh. It helps with busy lifestyle and being
• 27:00
  Speaker 2: able to have food prepared for my children pretty quickly.
• 27:04
  Speaker 2: All right, Question number two, If you could switch jobs
• 27:07
  Speaker 2: with anyone for a day, who would it be and why?
• 27:11
  Speaker 3: You know? My first thoughts went to people like Warren
• 27:14
  Speaker 3: Buffett or a strong political leader like our main congresswoman
• 27:20
  Speaker 3: Susan Collins. However, I really thought it would be amazing
• 27:24
  Speaker 3: to be someone like Scottie Scheffler, one of the top
• 27:28
  Speaker 3: professional golfers in the world today. It'd be amazing to
• 27:31
  Speaker 3: be a top of the world's greatest athletes and your profession.
• 27:36
  Speaker 3: I love his consistency, his control over his emotional and
• 27:39
  Speaker 3: mental faculties. What really focused my attention on him was
• 27:43
  Speaker 3: the ordeal he went through earlier this year when he
• 27:46
  Speaker 3: was as a disturbing and unjustified detainment by the police
• 27:51
  Speaker 3: on the morning of the final day of a professional tournament.
• 27:54
  Speaker 3: He was released with no account of wrongdoing, but ended
• 27:57
  Speaker 3: up arriving late to the turn. He couldn't do his
• 28:01
  Speaker 3: normal warm up or his practice, but ended up coming
• 28:04
  Speaker 3: in second place. To have that kind of mental and
• 28:08
  Speaker 3: emotional stability puts him at the top of my list
• 28:11
  Speaker 3: for amazing people. For me, being a wanna be golfer,
• 28:16
  Speaker 3: this is incredibly motivating. If during that one day I
• 28:19
  Speaker 3: could pick up on the mental strength he possesses while
• 28:22
  Speaker 3: learning a few things to make my golf a little better,
• 28:26
  Speaker 3: certainly wouldn't hurt my feelings any.
• 28:28
  Speaker 2: Or Two for two, Rick, I would also agree with
• 28:31
  Speaker 2: wanting to be Scotti Scheffler, given what he went through
• 28:34
  Speaker 2: at Valhalla a few months ago. But I also enjoy
• 28:38
  Speaker 2: the game of golf and wish I could produce scores
• 28:41
  Speaker 2: as such as Scotty Scheffler. So last one does not
• 28:46
  Speaker 2: need to be pertained to lending in any facet. But
• 28:49
  Speaker 2: what is one bold prediction for the future.
• 28:52
  Speaker 3: That's a challenging question.
• 28:54
  Speaker 2: I'm sure this one will disagree with.
• 28:57
  Speaker 3: But maybe not. I think there's no doubt the lot
• 29:01
  Speaker 3: of bold predictions about the economy and interst rates, but
• 29:04
  Speaker 3: that's not where my mind first went. My thoughts went
• 29:07
  Speaker 3: to AI or artificial intelligence. My prediction is that AI
• 29:12
  Speaker 3: will morph to a stage in the next five years
• 29:15
  Speaker 3: that we will not recognize our industry or even interactions
• 29:19
  Speaker 3: with service and technology companies around the world. Well, this
• 29:23
  Speaker 3: all sounds and feels scary. You know, we've all watched
• 29:25
  Speaker 3: those sci fi movies with a computers take over the world,
• 29:29
  Speaker 3: and I'm confident that this technology will simply enhance our lives.
• 29:33
  Speaker 3: It is. It will get us to the point I
• 29:35
  Speaker 3: keep preaching on to my staff that we want to
• 29:38
  Speaker 3: work smarter and not work harder. Who knows, maybe this
• 29:42
  Speaker 3: could get us to the four day work week we
• 29:43
  Speaker 3: all want.
• 29:46
  Speaker 2: Well, I think we're three for three. Of course, I
• 29:48
  Speaker 2: have many bold predictions, but I would agree with you
• 29:51
  Speaker 2: on the movement of AI is going to definitely elevate
• 29:55
  Speaker 2: in the very very near future. Well that wraps this
• 29:59
  Speaker 2: episode of leaders and Lending. As always, thank you to
• 30:01
  Speaker 2: our listeners and Rick again, thank you for taking the
• 30:04
  Speaker 2: time to join me today.
• 30:05
  Speaker 3: Well great, Thank you very much Drew for having me
• 30:08
  Speaker 3: do a great job, and I hope you continue while
• 30:10
  Speaker 3: this is great service.
• 30:12
  Speaker 4: Upstart partners with banks and credit unions to grow households
• 30:15
  Speaker 4: and expand consumer lending through its leading AI lending platform.
• 30:19
  Speaker 4: Upstart powered banks and credit unions leverage AI to offer
• 30:23
  Speaker 4: higher approval rates and experience lower loss rates while simultaneously
• 30:26
  Speaker 4: delivering the exceptional digital first lending experience that consumers demand.
• 30:31
  Speaker 4: Whether you're looking to grow and enhance your existing personal
• 30:34
  Speaker 4: and auto lending programs or you're just getting started, Upstart
• 30:38
  Speaker 4: can help. Upstart offers an end to end solution that
• 30:41
  Speaker 4: can help you find more credit worthy borrowers within your
• 30:44
  Speaker 4: risk profile with all digital underwriting, verification, loan closing, and servicing.
• 30:50
  Speaker 4: It's all possible with Upstart in your corner. Learn more
• 30:53
  Speaker 4: about finding new borrowers, enhancing your credit decisioning process, and
• 30:56
  Speaker 4: growing your business by visiting upstart dot com, slash lenders.
• 31:01
  Speaker 4: That's upstart dot com slash lenders.