Lenders can’t rest on the laurels of what they already know because the marketplace—and members—keep changing.
If you recall, I recommended some lender resolutions a year ago to celebrate the coming of 2022. Some of my predictions for the year came true, unfortunately! While a lot of my lending resolutions for 2023 overlap somewhat with last year’s, here’s the one original resolution I came up with for the coming year that should be able to help any leader, especially lending leaders: Don’t be an example of one year of experience applied 15 years in a row.
Please allow me to explain what I mean by that.
When I started the critical thinking process for my 2023 resolutions, I took a trip down memory lane to 34 years ago when I was hired as the AVP of lending for what is now $4.6 billion FAIRWINDS Credit Union in Orlando, Florida. It was truly the biggest break of my career, as I was just 27 years old and armed only with a bachelor’s degree in business and five years of lending experience as a branch manager for Norwest Finance. At the time, FAIRWINDS CU had $180 million in assets and some significant loan portfolio problems.
Several years after I got the job and fixed most of the loan quality issues, then-CEO Ed Baranowski said that when he hired me, one of my direct reports felt she should have gotten the job instead of that “27- year-old kid from the finance company.” Her rationale? She had 15 years of lending experience.
Ed confided in me that he didn’t buy into that thinking. “Bill, what she really had was one year of experience 15 years in a row,” he said. I still remember that conversation, and that thought drives me to this day. She hadn’t continued to learn over time. And that’s my suggested resolution for leaders, including lending leaders this year: Keep learning.
Needed Skill Sets Change
It’s clear that the necessary skill set to succeed has constantly changed with my career. When I was a trainee in the finance company industry, a strong fundamental knowledge of credit was a must. I had to live, eat and breathe the 3 Cs of credit: character, collateral and capacity.
When I became a branch manager, success was a function of determination (it wasn’t easy developing business when interest rates on loans were between 19% and 29%) and entrepreneurial spirit. Frankly, I had to make things happen primarily through my efforts and secondarily through my staff of employees who were even greener than I was!
At FAIRWINDS CU in 1988, success first required the ability to fix a broken portfolio. I needed the fundamentals of credit, but I also needed a plan, which included re-training the staff and finding new ways of lending to young military borrowers—as the credit union then primarily served a Navy training center full of new recruits. A few years later after the credit quality issues had been addressed, I had to focus on balance growth, as the portfolio had shrunk during that time. Fixing the portfolio was easier—we had to make fewer bad loans, but the loan “engine” had not gotten the same attention as loan quality.
I think I got the job at Ent almost more than two decades ago because I had a knack for analytics and a strong vision for developing a sustainable business model. When I got in and rolled up my sleeves, the real challenge was building the lending management team; 22 years later, we’ve seen a quantum leap in the skill set of our lending leaders. When the Great Recession hit, I needed to ensure Ent had a unique and member-centric approach to assisting our members first. Risk mitigation necessarily had to sit in the back, yet stay ready to take over the wheel.
The last few years have provided a unique set of challenges in surviving the pandemic and leading the lending group in a very tumultuous time. Remote leadership is something none of us could have predicted or prepared for. Member needs and fears were unpredictable as well. On top of the operational and leadership challenges, the wild interest rate environment with the lowest interest rates ever and then the highest mortgage rates in 20 years occurring in less than 12 months has put an emphasis on proper pricing. If you’re a chief lending officer, the ability to combine your lending expertise with the mindset of a chief financial officer has become an absolute must!
Increasingly, my primary objectives have been preparing the organization and my direct reports for the future—and that means we need to keep on learning. Throughout my career, I never could afford to “set it and forget it.” More than ever, lenders need to be able to adapt and update their skills and mindset to stay relevant in not only their careers, but to keep their credit unions relevant as well. What a great resolution to start the year—and to resolve to keep doing for the rest of your career!
Bill Vogeney is chief revenue officer and self-professed lending geek at $9.8 billion Ent Credit Union, Colorado Springs.