A recent article in the Credit Union Directors Newsletter highlights the role the board of directors plays in their credit union’s member business lending program. While noting that it’s a great time for credit unions to enter the commercial lending market, the article emphasizes that “commercial lending is not the same as consumer lending, and credit unions should approach this as an entirely separate business practice.”
The article provides details and explains the board’s role in both starting a program and managing an existing program. Author Jim Bullard from CUNA Mutual Group writes, “One of the main differences is that commercial lending requires considerable guidance from the board of directors. According to the MBL rule, “A credit union’s board of directors is ultimately accountable for the safety and soundness of the credit union’s commercial lending activities.”
Whether your credit union is already involved in commercial lending, or has it on the horizon, the article is worth a read. Happy New Year and thank you for taking the time to read A Direct Line!