PLANO, Texas—Kathy Garner is marking her third anniversary as CEO of Catalyst Corporate after having traveled the equivalent of eight trips around the planet – 200,000 miles – visiting some 300 credit unions over that time, according to numbers released by the corporate.
Those miles were earned while traveling from Catalyst’s headquarters near the Dallas-Fort Worth Airport to credit union offices in Georgia, Washington, Hawaii, California and numerous places in between.
Catalyst Corporate serves more than 1,300 credit unions that range from under $8 million to more than $8 billion in assets. Those CUs are scattered across more than a dozen states and five time zones.
The one commonality Garner said she has found with across the diverse CUs: “They are concerned with lending.”
“For a while, nearly every credit union was struggling to make loans. Now, some are looking for options so they can continue to fund a growing demand,” said Garner.
Catalyst Corporate said that’s the reason it developed its loan participation program as one potential solution. Since launching early last year, Catalyst Corporate said its participation program has helped 41 credit unions buy and sell more than $100 million in loans, and millions more dollars are in the queue.
Garner aid that Catalyst Corporate is “sort of a one-stop shop that offers a full range of loan participation services, making the process easy and convenient for all parties.”
Catalyst Corporate 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, Catalyst Corporate 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.
“Loan participations are an effective tool to help credit unions manage their business and their balance sheets,” Garner said. “They can help offset liquidity challenges and concentration issues and enable credit unions to meet their members’ loan needs without exceeding policy limits or pressuring capital ratios. And, the loan participation program keeps the lending activity within the cooperative system.”
In addition, Garner said her visits with credit unions have confirmed that “CEOs are extremely busy,” overwhelmed on most days with compliance issues and day-to-day operations. Strained to find time to innovate, “that’s where Catalyst Corporate can assist,” said Garner. “We can aggregate and innovate. I believe credit unions want to count on their corporate to do a lot of R&D on their behalf.”
To that end, Catalyst Corporate has developed a new sweep trading platform to replace the Federal Reserve’s Excess Balance Account when interest rates rise and the Fed lowers the rate paid on excess reserves. Garner said credit unions will be able to use this trading platform to invest their overnight and short-term funds with the help of Catalyst Corporate. Catalyst Corporate has completed the technology development for this project and is securing third-party relationships to facilitate seamless trading activity, ensuring that the new program will be available as soon as credit unions need it.
In addition, to help shoulder some of that R&D expectation, Garner has worked in the past year with the Filene Institute to develop an “innovation culture” at Catalyst Corporate. That program and other similar development programs will enable Catalyst Corporate to bring several new services forward this year, including:
- A vault cash forecasting tool
- Expanded international payment services
- A new local rewards program to support mobile banking
- An ACH “data mining” service that can help credit unions identify potential loan prospects