PLANO, Texas—Catalyst Corporate reported that since launch in 2014 its loan participation program has helped 41 CUs to buy and sell more than $100 million in loans.
Catalyst said it closed five loan participation deals since the debut of the program, and that millions of more dollars are currently in the pipeline.
“It is no secret that much of the credit union industry’s recent loan growth has been driven by larger credit unions,” said Bruce Fox, EVP and chief investment officer for Catalyst Corporate. “We knew that it was important to develop a loan participation offering that could serve the interests of all of our member credit unions. That’s why Catalyst Corporate’s program has no limitations on the size of the loan pools – or the credit unions – involved.”
According to Catalyst Corporate, the $544-million Denali Alaskan Federal Credit Union, Anchorage, was among the first to bring a loan package to the table. The credit union assembled a $39-million package of new and used car loans for participation to help a balance sheet that was 106% loaned out at the time.
“This helped us to mitigate risk,” CFO Eric Bingham said of the process that helped the credit union avoid new capital to offset loan growth.
That loan package was parceled out to a combination of more than a dozen credit unions in Texas, Hawaii, California, Oregon and Washington—some, by design, with less than $50 million in assets.
Catalyst Corporate began developing its new loan participation program during 2013, following the National Credit Union Administration’s issuance of a final rule detailing what credit unions can and cannot do when sharing loans.
Catalyst Corporate said it works with sellers to identify and assemble loan pools, which are comprised of auto loans and mortgages, and develop pricing. Once a participation package has been assembled, staff outlines the offer for sale, locates buyers, and gathers and provides the due diligence information on a secure website for buyers to review. Catalyst Corporate then coordinates the processing of documents between sellers and buyers, processes the settlement transaction, and provides monthly reporting and remittance services.
Related
Catalyst Corporate Expands ATM Capture
Volume Soars on Catalyst's Deposit Capture
Catalyst Corporate To Host Video ‘2015 Blueprint for Success’