First seen in: Credit Union Times
By Ben Rempe, COO, LenderClose
A couple of months ago, I had an idea for a piece I wanted to write about the disconnects between credit union investors and investees. This, of course, was before the COVID-19 pandemic left us all feeling more than a bit separate and disconnected.
My original idea was a call to action to break the mental frameworks that shape the way we view opportunities. During the past 15 years of fundraising for CUSOs – and particularly during the last few months of series B fundraising for LenderClose – I had been getting an up close and personal view of the limits we create when we stay in our lanes, and don’t open ourselves to new ways of doing things. My plan was to issue a challenge to move outside comfort zones, make bold moves and invest in innovative CUSOs.
But then COVID-19 hit, and all I could think was that everything had changed.
But, had it? I soon started to see the many ways the crisis just magnified the problem.
On March 11, LenderClose made a quick decision to move our entire staff to remote work. It was a bit sad, because we have a very fun office environment, but aside from that, we made the transition in a day. I don’t think any of our more than 200 clients even noticed.
But things weren’t quite so seamless for many of our credit union clients, who were making herculean efforts to continue serving members. Despite having disaster plans in place, many struggled with the technology needed to quickly get non-essential staff up and running in a remote environment.
This underscored the paramount need for credit unions to invest in technology that can bring new expertise and agility to their models of operation. Credit unions have capital and problems that need solving. Entrepreneurs are building solutions to those problems. Why aren’t they connecting more frequently?
I think the one-word answer is communication. We have to recognize how we filter information – and inhibit opportunity.
Commercial lenders, for instance, often define opportunity through a lens of performance indexes set by universally accepted best practices.
CFOs draw from their experience with fixed income investments and asset liability management.
CEOs tend to have more range to entertain new ideas. But, the space often shrinks quickly when they sense resistance from the coalition that can help them bring a new idea to the closing table.
We investees are guilty, too, of not always recognizing other perspectives. In our zest to see opportunity in new places, we don’t always see the same potential hurdles as the investor. Without acknowledging that things may not go as planned, and that our proposition bears certain risks, we can’t frame our investment ask in terms the potential investor finds more palatable.
The cost of this is great. So many valuable ideas to modernize credit unions are starved for resources, despite the fact so many credit union investors are looking for opportunities to back the innovation developed by disruptors. But filters and frameworks keep them safely in their comfort zones.
One of the outcomes is the majority of money flows around deals, which are easy to understand and digest: Mortgages, credit cards, member business lending. Innovation fails to grow at the pace it could, because everyone is afraid to explore divergent thinking and become bold investors and on-the-beam investees.
If we don’t recognize these patterns, then we will, in fact, return to business as usual when the pandemic finally subsides. And I don’t think it’s a good thing, in this case. What better time than now – when nothing is normal – to decide we don’t need to rush back into our old ways.
We’re seeing even more clearly that pushing beyond our self-created boundaries keeps us agile and flexible – because we never know the exact moment life will demand it.
Ben Rempe, COO, LenderClose
Ben Rempe is COO of fintech CUSO LenderClose. With API connections to every vendor it takes to originate a mortgage or , LenderClose gives loan officers immediate access to a comprehensive suite of reports and services – from credit scores and flood determinations to notary signing and county recorder services. The result is a streamlined and vastly accelerated underwriting process. Ben can be reached at firstname.lastname@example.org or on Linkedin.