Welcome to Credit Union Conversations. I’m Mark, and today’s episode will be a little different. I don’t usually record podcasts like this, but sometimes you just need to talk through what’s been on your mind. There’s been a lot happening in the business lending world, and I’ve been reflecting on where things stand—what’s working, what’s shifting, and what credit unions need to be paying attention to right now. This is more of a pulse check, a chance to unpack the momentum and opportunities ahead. So, thanks for joining me for this more personal take—I’m looking forward to getting into it with you.

IN THIS EPISODE:

• (00:00) Introduction
• (00:49) Mark shares what's on his mind in the credit union space
• (02:41) Business is up this first quarter
• (06:16) The shrinking base of credit unions and the pay-for-play model of conventions
• (12:17) The CFPB and the CDFI and the NCUA
• (17:11) The changing culture of the credit union and what can be done

KEY TAKEAWAYS: 

• Business lending is experiencing a resurgence, with increased demand from small businesses and credit unions. It's proving to be a reliable income stream even amid economic fluctuations, offering more stability than consumer loans and mortgages, which have been impacted by interest rate volatility and market changes.
• There is a growing need for stronger portfolio management and compliance resources due to rising—though normalizing—delinquencies and heightened regulatory expectations. The competitive landscape is also intensifying, with more entrants vying for a shrinking pool of credit unions, leading to thinner margins and greater pressure on service providers.
• Industry conventions, especially larger ones, are becoming less effective for meaningful engagement. The consolidation of major trade organizations has shifted event participation to a pay-for-play model, limiting visibility for value-driven providers. This, combined with rising costs, is prompting a reevaluation of outreach strategies and event participation.

RESOURCE LINKS

Mark Ritter - Website

Mark Ritter - LinkedIn

Credit Union Conversations Ep 79 - Mark Ritter

[00:00:26] Mark Ritter: Hello everyone. This is Mark Ritter, your host of. Credit union conversations. Thank you so much for joining me today. I am also the CEO of MBFS by my day job. We are a business lending qso. We're based in Pennsylvania, but we're spread out virtually with credit union clients and our staff all throughout the country.

[00:01:11] One thing that I've learned is doing a solo show where I'm talking into a microphone without a guest or a partner or something to, for some witty banter is tremendously more difficult than than my typical format. So just bear with me today as I'm not a professional. But I do enjoy what I do and I really love when I get out to our clients and in the community and people say, wow, I really enjoy the show, which really makes it worthwhile for me to know that people are listening and reacting.

[00:02:19] And for the first time since I've been in the industry, PE-people didn't have money to lend and were pulling up on money. And if you just turned the dial up and paid more in deposits, it wasn't coming in. It would come in a little bit, but not that much. I. But since last year, we've seen a steady clickup in new clients.

[00:03:12] The good thing is, you know, we're, we're helping a lot of small businesses get the financing they need. We're helping credit unions put out the loans that they want, but it's also because everybody is looking for new sources of loans, new sources of income. They realize they can't just go back to indirect auto loans.

[00:04:12] So we find that we're kind of a hedge against some of the booms and busts. Of the mortgages and consumer loans and interest rate cycles. So I hope if you're not in small business lending, if you're not in commercial lending, let us know. We'd love to talk to you. You know? 'cause we're actually, what we're actually seeing is our, I'll call it month to month, week to week volumes.

[00:04:58] So I'm pretty excited about [00:05:00] it. And one, one of the pieces that we're seeing here is, you know, we're having to hire a little bit more than what we thought, but we're also having to put more resources into the portfolio management side of the business, the annual review side of the business, just because that continues to grow.

[00:05:43] We have to do it, it it's part of our business. It keeps our portfolio safe and sound and we really try to identify issues before their issues. So, but all in all, you know, as far as MBFS today, you know, for if you are one of my clients, thank you. For Ke, for [00:06:00] keeping us in business, for letting us help your credit union.

[00:06:29] And I've just been around. I'm coming up on, you know, 25 years in this space and selling to credit unions and connecting with you as a credit union if you're in the credit union space is just so different every year than when I think back to my early years in the qso, but also in the credit union space when I was working for retail credit unions.

[00:07:16] Whatever the number of credit unions today is, is just gonna go continual down. And credit unions purchasing products and services has changed so much. It used to be what I'll call a personal sales business, and that's still a little bit of a part of it. People want to know and work with companies that they get referrals from, but past that.

[00:08:09] Quite a bit. It seems like every year there's somebody, a new entrance in our bins business, either a private business or a company that's owned. By other credit unions or some venture capital company where the margins are thinner, there's more competition for a shrinking base. So at some day there'll be a reckoning of that.

[00:08:55] And I mentioned personal selling and [00:09:00] one of the pieces is credit unions love conventions. If one convention is good, 10 must be better. We have a lot of conventions. If you really dug into it, we probably have too many conventions. And one of the frustrations is the biggest conventions are where I tend to find the least.

[00:09:45] Another frustration is just one of the reasons I like the solo episode is 'cause guy can say things like this, the merger of CUNA and Nafq has not been kind to my business because it's really [00:10:00] become a pay for play model. Sometimes when it comes to speaking engagements, when it comes to placement, when it comes to involvement, it used to be who was an expert.

[00:10:34] I. That's not just necessarily a business lending. In my industry observation, that's where I see it across the board. I see a lot of the same people retreading because Okay, they wrote a big check. Yes, and I, I guess it's a business at the end of the day, but I'm not sure it's providing the best value. I, I'm waiting for the monopoly of America's credit union to split [00:11:00] up someday, because eventually you'll see people, you know, who you know, NAFQ was formed because a group of credit unions got dissatisfied and splintered off, and at some point when the price gets too high, you'll see another group of credit unions split off and to say, we can do this better, faster, cheaper among ourselves.

[00:11:49] So we'll see how it goes. But all in all, it's been an interesting time. You know, as I mentioned, 2025 has been a great time for us so far, [00:12:00] and we think it'll be a good time. I don't know if it's a great time to be a credit union. Maybe it is. Depends on what side of the coin you're on, because just the regulatory environment has been absolute chaos and people do not know which way is going.

[00:12:44] We had a project on our plants where we were gonna have to spend a lot of money complying with some CFPB rules that were coming into place. We've scrapped those and said, see you later. We're, our credit unions are gonna have the same [00:13:00] amount of risk there. It, it wasn't gonna protect anybody. You know, tracking our, our applications and creating a new hamda for credit unions is really just a massive bureaucratic pain point and not solving it's a solution in search of a problem.

[00:13:47] Because they play an important role in serving communities that nobody else wants to serve, providing fair credit to a lot of people who need it, and this is just a model that [00:14:00] is invaluable. Now, is there a little bit of bureaucratic fluff in that? Probably. Can we cut it all around the edges? Probably.

[00:14:37] So I really like Chairman Haman's philosophy of create rules and enforcing the rules instead of trying to find information and tell you that you're wrong. We are starting to already see a large shift in the examination process the last two years of the examination process. [00:15:00] Have been, you know, police squad looking for things that we can criticize you for.

[00:15:33] You can't tell me that the NCUA doesn't have their thumb on creating more or less low income credit unions. It's supposed to be very black and white, and you either qualify or you don't. But that's not the case, uh, as you know. Two years ago, I moved up to the mountains in Sullivan County. I'm one of one of the poorest counties of Pennsylvania.

[00:16:23] If you're listening to this and work for the NCUA. It's an issue. Check into it. It's a hidden black box process and I needs to be fixed. But yeah, it, so, but I'm really looking forward to the NCUA and getting back into guidance and oversight versus enforcement and telling credit unions how to run their shop.

[00:17:11] As we change over generations and we have a changing of the guard is I just see what I'll call the credit union culture and the credit union's principles being eroded, and my number one grievance in that I. Is credit unions, were designed to cooperate with each other. Cooperation among cooperatives is a principle of our industry.

[00:18:00] You know, when we see new people come in, it's so funny because I either see one of two models and it's never anything in between. It's either we're gonna keep the status quo and everybody moves over one seat, or thank goodness I'm here because I'm gonna completely rip this institution apart and do a complete overhaul.

[00:18:54] We need to develop our staff for executive levels. We need to not be [00:19:00] afraid to hire and recruit smart young people and with really good talent that can become the C-level executives of the future, where it's a natural transition. So we have people in this industry who like and enjoy the culture and it's not just another financial institution.

[00:19:49] You know, you can keep that relationship, but look to keep your costs down and the people who look are focusing on attracting new members, growing [00:20:00] relationships, and not just buying loans from somebody else. Or lean too heavy into those indirect channels are the ones who are going to be successful. But you know, I'm positive about our business.

[00:20:36] Thank you for being a client. If you're a client, if you're a not, let's at least be friends and let's connect. And I love to know your thoughts on what you want to see in the podcast in the future. I love to see what you would want in MBFS in the future, and just any way that we can help you. So thank you for your time.

[00:21:04] Narrator: Thank you for listening to the Credit Union Conversations podcast. Have a question. Visit mark better.com for more information.