MBS Task Force MBS Latest News MBS Resources MBS Education Opportunities

Ohio Credit Union Member Business Checking Account Guide This Guide provides the background, operating forms and instructions, policy and pricing guidelines, research findings, and additional resources to assist Ohio credit union executives and directors in deciding whether business services are right for their credit unions.

About the MBS Task Force
The 6.8 million small offices and home offices in the United States have incredible potential to generate significant revenue due to their personal and business financial services needs. Yet only 14.2% of the nation's 11,000 credit unions offer member business loans, with an additional 2.2% providing agricultural MBLs (larger credit unions are much more likely to offer member business loans).

The OCUL Services Corp. Member Business Services Task Force and the Ohio Credit Union League provide the resources on this page to help you make Member Business Services decisions. If you need more help, please contact Dave Shoup, Director of Research & Information, at (800) 486-2917.

MBS News

Member biz lending is booming at credit unions in 2003
(Oct. 1, 2003) -- According to Callahan & Associates, member business lending is booming at credit unions. Member business lending has been the growth king for credit unions since last June, with balances rising over 26% to $8.3 billion. As of June 30, over 1,630 credit unions reported member business loans on the books, with 228 credit unions starting programs over the past year. These credit unions had, on average, $118 million in assets, a 1.14% ROA, and $5 million in MBLs outstanding. The higher balances ($111K on average), greater community visibility, and improved relationships are all helping these credit unions increase their returns and boost their member value.

NCUA Board expands member business services options for credit unions
(Sept. 25, 2003 - from CUNA News Now) -- The NCUA Board on Sept. 24 unanimously approved as a final rule a new member-business loan (MBL) regulation, expanding credit unions' investment options.

Among other things, the new MBL regulation:

1. Amends construction and development loan equity requirements to require 25% (35% previously) borrower equity;
2. Authorizes highly capitalized RegFlex-designated credit unions to establish individual policies regarding whether to require personal guarantees by principals and the amount of such guarantees;
3. Authorizes well-capitalized credit unions to make unsecured MBLs within certain regulatory limits and restrictions;
4. Provides that purchases of non-member loans and non-member participation interests do not count against a credit union's aggregate MBL limit. This is subject to an application and approval process that will include safety and soundness reviews;
5. Allows 100% financing on certain business purpose loans secured by vehicles;
6. Provides that loans directly to other credit unions and credit union service organizations (CUSOs) are not classified as MBLs;
7. Clarifies and streamlines MBL documentation requirements;
8. Amends the prompt corrective action (PCA) rule regarding the risk weighting of MBLs; and
9. Authorizes federal credit union investment in CUSOs that originate business loans, subject to certain regulatory restrictions.

NCUA Chairman Dennis Dollar said issuing the new MBL rule is "a timely and necessary update" that will result in more start-up entrepreneurial capital being available for small business and greater safety and soundness diversification in credit unions' lending portfolios. "This is a well balanced regulation which clearly recognizes the statutory restrictions on member business lending by credit unions, but empowers financially strong credit unions with solid underwriting standards in place to reach out to more budding entrepreneurs in their fields of membership."

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Member Business Services Education Opportunities
 

None currently. Please check back.



League articles on Member Business Services

• The Growth Factor of Member Business Services
  Small business owners are a largely untapped growth market for credit unions
  Cover story from the September 2001 issue of Interest Magazine
• Simple checking and savings can grow into more opportunities
  By Dave Shoup, Director of Research & Information, Ohio Credit Union League
  From the September 2001 issue of Interest Magazine
• New task force is creating MBS support system
  By Rose Bartolomucci, Chair of OCUL Services Corp. Member Business Services Task Force
  CEO, Kent Credit Union
  From the September 2001 issue of Interest Magazine

CUNA/Tower Group  Research Reports 
Requires CUNA password/subscription service as noted on Research Report site

• The Changing Nature of Small Business and SOHO Relationship Management
  Small businesses have become an extremely important segment within the financial services industry. As a result, managing the small business relationship -- once a simple, straightforward process -- has become a much more complicated task. Read the full abstract.
• Small Business and SOHO Technology Ownership and Usage Behavior
  Small businesses are increasingly incorporating the Internet into their daily business operations and are using this medium for financial transactions. As FSIs continue to struggle with how to make the Internet work for them, one fact is clear: Technological change is rapid, and FSIs need to reevaluate the way they conduct business or they risk obsolescence. Read the full abstract.

(Acrobat required)

Other Resources

• Citizens Equity First Credit Union
  CU in central Illinois provides an excellent model of credit union business services. 
• The Business Administration Institute  
  Analyzes the small business market and the challenges financial institutions face in serving the market in its study "Unlocking Winning Strategies to Serve Small Businesses."  
• The Credit Union National Association (CUNA)  
  Offers several modules on the topic, including a MERIT (management training) module on Providing Loans to Small Businesses, and a STAR (staff training) module on The Lending Process.
• The Ohio Credit Union League  
  Offers answers to regulatory questions regarding member business services through its Research & Information Dept.