Lake Trust Brings In The Consumer Cavalry To Process PPP

The Michigan credit union shuffled its lending deck as member loan activity demanded.

 
 

Top-Level Takeaways

  • When the Paycheck Protection Program fund opened, Lake Trust received hundreds of calls from members and non-members looking to access the funds.
  • To handle the increased volume, the credit union reassigned three consumer lenders full time to PPP funding and rotated in many more.

CU QUICK FACTS

Lake Trust Credit Union
Data as of 03.31.20

HQ: Brighton, MI
ASSETS: $2.0B
MEMBERS: 177,513
BRANCHES: 23
12-MO SHARE GROWTH: 2.9%
12-MO LOAN GROWTH: 6.2%
ROA: 0.30%

In the past three years, Lake Trust Credit Union ($2.0B, Brighton, MI) has invested heavily in commercial services to improve the experience of its small business members, earning recognition and usage along the way.

In 2017, the credit union launched a new digital banking platform for its commercial members and was named Michigan’s SBA Lender of the Year, and in February 2019  it introduced a microloan program to help small business owners achieve their dreams. Since that time, member business loan balances at Lake Trust have grown by 40% and the credit union has attracted even more deposit-only relationships.

The coronavirus pandemic jolted operations for everyone, especially small businesses, and many lenders worked quickly to provide support. The U.S. government created its own relief program that required businesses to apply for loans through a qualified lender, and when the Small Business Administration’s Paycheck Protection Program (PPP) became fully operational in mid-April, Lake Trust knew it would participate. 

“We felt like it was our obligation to support our business members,” says Andrea Mosher, the credit union’s senior vice president of lending.

Wanted: More Capacity

When the day arrived for businesses to apply for PPP funds, the volume of applications was huge, Mosher says. In fact, the activity recalibrated how Lake Trust thought the PPP process would work.

Lake Trust has four commercial lenders plus additional support staff, all of whom handle the day-to-day management of the portfolio. When PPP opened, Mosher had a clear, three-step application process in mind. First, existing business members would make a request through Lake Trust’s commercial team. Second, the commercial team would prepare the application and submit it to the credit union’s commercial lending CUSO. Third, the CUSO would upload the application to the SBA. 

Andrea Mosher, SVP of Lending, Lake Trust Credit Union

What Lake Trust underestimated were the flood of calls from non-members.

“We were getting hundreds of calls that first week from business owners with no Lake Trust relationship,” Mosher says. “They were trying to get information to understand what was going on.”

At the time, Mosher says, there was no sense additional rounds of funding would be available. Businesses didn’t know whether they would have access to funds, which created a fast and furious atmosphere where the credit union had to move fast to ensure applications had a shot to receive funding. 

“Unfortunately, my team did not have the capacity to both serve the borrowers who were trying to put in applications and also talk through the process with others who were still in the inquiry stage,” Mosher says. “We had to come up with a way to provide the information in a reasonable amount of time and keep ourselves sane.”

Rather than pass callers to third-party servicers that sprouted up after the PPP was announced, Lake Trust changed its operations to handle a higher capacity.

Bringing Consumer Into A Commercial Process

Because of the high number of calls, Lake Trust first made changes to its phone system. The credit union didn’t want the influx of non-member and deposit-only PPP calls to cause other member requests to run slower, so it introduced a PPP-specific menu within its interactive voice response (IVR) system to funnel calls into a separate queue. 

On the other end of that PPP-specific IVR, Lake Trust added new voices. The temporary closing of auto dealerships contributed to a larger macro-economic shift in demand away from consumer loans. So, the credit union reassigned three consumer lenders to handle PPP activity full-time. It also mixed in three to five additional consumer employees as volume and their own workload dictated.

They understood they’re part of the solution, and trying to keep our small businesses open is something they could feel good about when they went to bed at night.

Andrea Mosher, SVP of Lending, Lake Trust Credit Union

The reassigned lenders answered calls, explained to callers what information they would need and what the documentation process would look like, and generally established a line of communication for further questions. 

“A lot of the issues we saw in the first week were as simple as borrowers not filling in the application completely,” Mosher says. 

The consumer team helped business callers work through questions on the paperwork, which were many, before escalating applications to the commercial team, who ultimately uploaded it to the SBA. 

“The commercial team didn’t have time go back and do all that work,” Mosher says. “Bringing in consumer folks helped us communicate the requirements so when we sent the package to the SBA, the Is were dotted and the Ts were crossed.”

And although not every non-member who called in ultimately applied, the additional staffing allowed Lake Trust to start conversations with businesses it might not have otherwise. Plus, the interactions allowed the credit union to highlight the cooperative difference.

A Willingness To Make A Difference

For Lake Trust to move consumer employees to PPP processing required education as well as buy in, but the shift was easy thanks to the willingness of staff.

Of course, the consumer lenders didn’t necessarily have commercial experience, but they did have loan experience. Plus, the PPP was new for everyone. This, combined with Lake Trust’s high-level briefings on the needed application documentation, kept things simple.

“For the most part, they followed the worksheets and formulas we put together,” Mosher says. “It was more about attention to detail, process, and understanding completeness. We’re nothing if not detail-oriented on my team.”   

As for buy-in, Mosher believes the ability for some team members to stay busy was key. As was seeing the value of their work on local small businesses. 

“This is a historic event, something we’ve never experienced before,” Mosher says. “They understood they’re part of the solution, and trying to keep our small businesses open is something they could feel good about when they went to bed at night. No matter how stressful it’s been, they knew they were making an impact.”

And, there was stress. Lake Trust has helped some 200 small businesses in total apply for PPP funding. For the 10 days the program was open, the credit union received a flurry of activity that required team members to work longer days to keep up with demand. To help alleviate stress, Lake Trust was flexible with when employees worked those hours.

“It was a race,” Mosher says. “We had to get applications submitted because there was only so much funds available. That weighs on you. You think, ‘If only I had finished this part, this business would have received money.’ And if you don’t, they don’t. I think that motivated people.”

The SBA’s PPP is now accepting applicants for its second round of funding, although the pace has been much slower, Mosher says, and applicants tend to be small businesses with 10 or fewer employees — smaller than in round one. But even with the slower pace, Lake Trust has continued to leverage its consumer team because the program requires businesses to do more than simply apply for funding. They must also apply for forgiveness.

On June 30, the application process for PPP funding will end. That date is firm, for now. However, the date when an applicant must apply for the forgiveness portion of the PPP is eight weeks after the funding date, so lenders will be processing forgiveness applications on a rolling basis until late August. 

Lake Trust plans to keep its consumer folks on the PPP beat until then because the 11-page application for forgiveness is more complicated than the initial application, according to Mosher, and the more complex the application, the more help members will need. 

“We learned connecting with members and talking them through a complex process was beneficial,” Mosher says. “We also learned we have the capacity to be flexible as a team. When we have good people — who are strong, service-driven, and detail-oriented — they are going to do well in whatever role we put them in.”

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