Lending Perspectives: We Need to Develop Human Lenders as Much as AI

young executives around a table giving thumbs up
Bill Vogeney Photo
Chief Revenue Officer
Ent Credit Union

4 minutes

While machine learning will certainly facilitate future loans, Ent’s new learning program responds to the idea that there’s still plenty of need for skilled lenders.

After I graduated from college in 1983, I moved forward with my plans to pursue a career in banking without any specific ideas of which aspect of the business was most attractive to me. I was aware that most banks offered a management training program for new college graduates. Two to three years of exposure to various areas of the bank typically was followed by a permanent, first-step assignment, sometimes as a branch manager, sometimes at a next-level position in other operational areas.

Unfortunately, 1983 was a bad time to be looking for a job, especially at a bank. The prime rate was still in the high teens, and the economy suffered from high inflation and unemployment. While my one serious bank interview didn’t work out, I was able to pivot and was hired into a similar management training program at a national finance company. Five years of what you might call “trial by fire” and I was hired as the VP/lending at my first credit union at age 27. Let’s face it—I was extraordinarily lucky. 

While banks and many credit unions have similar talent development programs today, they’re typically geared toward developing the next generation of branch managers. I firmly believe that credit unions have to take a similar approach to developing tomorrow’s lending talent. I’m certain there is a contrarian or two who would say, “You don’t need to develop lenders! Machine learning will make all of your decisions, and members will do everything regarding their loan on a mobile device.” 

While machine learning and mobile devices will certainly facilitate a big chunk of future lending, there’s still plenty of room for skilled lenders and their career development. Why do I believe we have to get serious about developing talent for lending?

Lending Jobs Are Getting Increasingly Complicated

I only have to talk to some of my mortgage lending staff members to realize how difficult it’s become to navigate the Fannie Mae, Freddie Mac, Federal Housing Administration and veterans’ programs guidelines and requirements. It helps to have mortgage lenders who have some background in consumer lending so we can add that to the needed skill set. Our best mortgage loan officer happens to have been the manager of our consumer lending call center prior to her time in mortgage lending. Consumer lending teaches you more of an “artistic” view of lending as opposed to mortgage, which is very rules-based.

It’s Hard to Hire Experienced Consumer Lending Talent

Let’s face it, banks are not consumer lending specialists. Sometimes I feel consumer lending is “beneath” them and they prefer to focus on mortgage and commercial lending. In addition, to streamline and standardize processes, most loan processing and underwriting in the banking world is centered on a handful of bank-focused areas like Charlotte, Chicago, Phoenix and Dallas. Local consumer lending talent just isn’t as available in mid-sized cities to small towns.

It’s Hard to Hire Mortgage Talent as Well

Not only is mortgage talent centralized in bigger cities, the biggest banks in the U.S. are increasingly abandoning affordable housing, preferring to focus on making jumbo loans due to the complexity and increasing cost of originating a mortgage. That is also drying up talent with experience in FHA and VA lending—both areas in which credit unions need to increase their footprint.

Digital Natives

Let’s face it, old guys like me will always be laggards to adopt and understand the latest in consumer trends and technology. We’ll get it eventually, but we’ll be behind the curve. Bright young people who want to learn the business and develop a well-rounded knowledge base will help drive your credit union’s development of the latest-and-greatest lending processes.

Ent’s Solution: EntRANCE

After about 12 months of planning, Ent hired in early January seven new EntRANCE trainees (our name Ent plus an acronym of “relevant abilities needed to contribute effectively”) for lending. Over a two-year program, these six newly minted college graduates along with an existing branch operations employee without a degree will spend time in eight different departments for three months in each rotation, learning both consumer and mortgage lending. They’ll get a performance evaluation every 90 days along with a retention/development bonus after each department rotation. They’ll get some face time with lending management and me before their next assignment. Even more importantly, we’ll start to create a plan for their future careers. 

We see three potential avenues for their professional development based on the answers to these questions: Are they oriented toward sales and service? Are they better on the analytic side or do they see themselves in a future leadership/management role? Do they have a passion for consumer lending or mortgages? Perhaps we find someone with a passion for analytics combined with a desire to be consultative that can fill future commercial lending roles as well!

Ultimately, we believe not only that Ent will be a stronger lender because of this initiative, but also that we can develop a whole new generation of credit union advocates through our efforts. By teaching program participants how we’re different in our perspectives about financial services, combined with how we value and develop people’s careers, we’ll ensure a stockpile of talent for years to come. 

Stay tuned to our success stories in coming years. Hopefully I’ll find someone who has the passion for lending and sharing ideas with credit union peers to continue this column!

CUES member Bill Vogeney is the chief revenue officer and self-professed lending geek for $5.7 billion Ent Credit Union, Colorado Springs. 

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