Jan. 22, 2025

Credit Unions in Transition: Evolving Mortgage Origination, Auto Lending, and AI Futures

Credit Unions in Transition: Evolving Mortgage Origination, Auto Lending, and AI Futures
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In today’s episode, we dive into the dynamic world of financial services, specifically auto and mortgage lending. Join host Drew Megrey as he speaks with Rick Moore, the Chief Lending Officer at Maine Savings Credit Union. With nearly 39 years of experience under his belt, Rick provides invaluable insights into the evolving mortgage landscape, tackling challenges like rising interest rates and soaring home prices. He’ll also share how financial institutions are pivoting with innovative strategies in auto lending and unsecured loans to navigate these turbulent times. Plus, we’ll explore Rick’s personal tech preferences and his take on the future of AI advancements in finance.

Join us as we discuss:

  • The potential of AI to transform the industry and pave the way for a four-day workweek
  • Why rising home prices and high interest rates have shifted mortgage production.
  • How Maine Savings Credit Union enhances auto and unsecured loan programs while exploring cutting-edge solutions.
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You're listening to Leaders in Lending from Upstart, a podcast

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dedicated to helping consumer lenders grow their programs and improve

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their product offerings. Each week, here, decision makers in the

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finance industry offer insights into the future of the lending industry,

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best practices around digital transformation, and more. Let's get into

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the show.

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Hello, and welcome to another episode of Leaders in Lending.

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I'm your host Drew Megree, joined today by Rick Moore,

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the chief lending officer at Main Savings Credit Union. Rick,

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Welcome to the podcast and thank you for making the

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time to join me today.

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Hey Drew, and thank you very much for inviting me

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to your podcast. It's great to have a partner like

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Upstart that takes the relationship to this next level. The

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work that you do is very important to many of

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us in the industry, so thank you for what you

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do and keep up.

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With good work.

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Thanks Rick. I always find this opening topic very interesting

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with each guest, because there, of course is many different paths.

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Right With that said, as I typically do, Rick, I'd

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like to start off our conversation by giving the listeners,

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you know, your path to what got you into the

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financial services space and what did that journey to becoming

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the chief lending officer at Main Savings look like well.

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I have to say, Drew that my career journey that

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spans almost thirty nine years now at Main Savings is

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something I've privileged to share in staff meetings across our

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branch network. While and doublegent on this opportunity, I recognize

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that some of this may not be as exciting to

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you and your listeners, but many of our staff at

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Main Savings has commented on how they enjoy some of

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the history of the crediting that I've been privileged to experience.

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I'll spare your audience a lot of the specific events

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that make my story relevant to our staff, but really

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it all starts four years before I was born. In

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nineteen sixty one, my father in law was in the

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railroad yard of the local railroad company and the founder

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of the credit union come up to him asking and

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if you if you'd like to join a credit union

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starting new ving so cooperative. My father in law didn't

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understand all of those that that meant to him, but

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he put his twenty five cents in and became one

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of the charter members of the credit union. I'd have

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to say that. At the beginning of my career with

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Main Savings, it was a thrill to be part of

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a legacy from my father in law, who then shortly

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thereafter started talking about how he would go to the

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founder's table kitchen table and talk about borrowing funds for

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a loan. It may have been like a three or

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five hundred dollars, and the CEO ways say at that point,

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I'm sorry, I don't we don't have the money right

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now to lend you three hundred dollars. We're not big enough.

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People have to make a few more payments. So he'll

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come back in another week or so and I'm sure

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we'll have that money available for you. So he remembers

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those days of old when the credit union is just

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starting out in the atink around the kitchen table of

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the original CEO. So that kind of history is fascinating

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to me, and watched it grow to where it's been.

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Where's his nay? Yeah. So in nineteen eighty six is

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when I really started with Main Savings. I started as

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the loan and collection officer at one branch, eight employees

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and about twenty million dollars in assets. One of the

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things I really specifically remember in nineteen eighty six was

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that we actually started our credit card program back then,

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And I just recently found out the last couple of

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years that nineteen eighty six is really when credit cards

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came to credit unions. So it was an interesting learning

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curve to figure out what credit cards means to us.

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So as the lender and the collector, I found out

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really quickly that I not only married them, I buried them.

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So I did the collection part of the process on

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a daily basis as well as due the lending, So

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I was involved with repossessions, forclosures, the hard stuff. But

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over the years, I've really kept the mantra that bad

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things happen to good people, and I know that that's

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really what the aspect we all need to keep in mind.

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But with my experience in the collection area, it almost

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makes me want to think that the first year of

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every lender probably should have training in collections. If they

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knew how to collect these loans, they'd probably be a

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much better interviewer, much better lender, and understand the reasons

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why collateral is really collateral only when you get it perfected.

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So it's one of those areas I think is really important.

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But from that point it became the branch manager of

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that original branch, but convinced the CEO to start a

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new branch in my hometown. I was about twenty five

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miles away, and he says, that sounds like a great idea.

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Rick.

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What we need to do is you need to develop segs.

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So it gave me that experience of going out and

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gathering I think it was a to forty new segs.

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They were churches, Snowville clubs, small businesses. And we opened

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that branch successfully and there I became the branch manager

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for twelve years. It was such a rewarding experience to

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be the active manager in the town where I lived.

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Although a trip to the store could often take way

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more time than I expected, and my wife was pretty

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much knew that if I didn't come back soon, I

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was probably caught up of the mouth talking to somebody

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about business, which she fully understood. It was really during

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that time that I fell in love with mortgage lending.

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That thrill of helping that first time home buyer get

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their first home. The opposite of the American dream is

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to own your own home. We were fully engaged in

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do a mortgage lending Back then, our new CEO was

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very much a mortgage lender, and we took off very

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quickly with mortgage lending. It was very rewarding, but it

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took its time that the CEO saw something in me,

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and in two thousand he asked me to become part

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of the admin team in the main office and turn

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it changed to the hand office, and he wanted me

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to become the leader director of the lending area at

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the credit union. This is where it was really exposed

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more to the business lending. We'd done some business lending,

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but we're really taking off at that point, and my

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expertise became more broadened and the slow growth of business

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lending was really fascinating over the next several years. At

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this time, I remained very connected with Collections. I was

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always the one that they would call upon, even though

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I wasn't part of that team. They always wanted to

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call on me from my experience with the mortgage area

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or repossession. So it was always a good thing to

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keep that connection there, and obviously now as the VP

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of lending, that was part of what I oversaw on

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a daily basis. Over the next five year years, I

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earned a spot on the senior leadership team, which led

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me to the senior vice president of lending position. Last year,

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my title was officially updated from with part of the

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senior team as part of the C suite as the

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chief Lending Officer. It's been an amazing journey as we

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find ourselves at almost eight hundred million dollars in assets

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and eleven branches. I'm thankful for the opportunity and the

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people that gave me those opportunities throughout the year to

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be a leader that i've become today. I always try

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to tell my staff, I try to empower them so

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that they could make me look better, and that's always

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a good thing, right. So I appreciate the opportunity to

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tell my story, the abbreviated story, and a little bit

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about the credit union history, because I believe that's probably

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one of the things that the credit unions don't tell

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very well, is their story. So with this type of

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a podcast, it's great to be able to have that

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option to tell the story of main savings. I hope

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that the fish what you're looking for through it does.

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That's awesome. That's a in reflecting back on that, it

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sounds like you were destined to be in the financial

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services space then, of course, you know, sitting at the

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at the dinner table with your your dad talking about

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lending at such a young age, of course you were

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you were destined, of course to be in the credit

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union space. One thing I do want to touch base

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though on is you know, you had a very elongated

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period there of working your way up and a lot

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of growth within Main Savings over the years. But let's

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rewind back to you know something that you brought up

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of your love of mortgage. So to frame up our

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first topic about thirty one short years ago, and Rick,

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I would assume you were a part of this Main

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Savings and six other credit unions founded a mortgage QSO

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And for the listeners that don't know, QSO is an

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acronym for credit union service Organization in that QSO today

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is now the largest credit union owned mortgage lender in

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the state of Maine, in one of the top five

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largest multi owned QSOs within the US. SO, mortgage lending

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in Maine is big, but let's dig into it from

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the opposite direction, rick So. A lot of our past

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guests have discussed, you know, their excitement about the transformation

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of lending and what they're doing in the space, which

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of course we'll get to later on, but I wanted

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to start by diving into a point you made when

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we first met Rick, which is a part of lending,

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particularly mortgage lending. To be exact, that's not exciting you

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right now. Can you talk a bit about why your

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premonition that the mortgage origination space in the short term

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isn't exciting you like it once did.

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Yeah, that's a really good point, you know. Like you said,

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we have our one of the leaders in the state

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or mortgage lending, have been for many, many years. It

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seems very different. Over the last eighteen months or so,

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we've seen our production go from very strong both in

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the refinance and the purchase markets, but tampered off significantly

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as we continue to experience the prices of homes have

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climbed dramatically, but with a lower rate environment, we saw

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home purchases remain affordable but strained. In the last eighteen months,

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the increases and interest rates have all but pus stop

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to the refinanced business, which was great great business. In addition,

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home prices continued to increase with very low inventory, so

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times for homes in the market dwindled with many homes

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selling the thousands over asking price, and we've actually saw

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a lot of bidding wars taking place during COVID. It

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was amazing how many people came to the state of

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Maine because they wanted to get out of the big cities.

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They were buying houses unseen. They were just taking them

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off the market paying ridiculous prices, which through the market

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a significant upspin for purchase prices. But it was an

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interesting time. So it certainly does divest our relationships in

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the state, but we're interested to see what the next

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process is going to look like. But what this whole

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process has done, as I've taken our affordability from over

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sixty percent of our first time home buyers to approximately

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thirty percent of our first time home buyers, most of

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our kids, including my son, are forced to stay at

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home and live with mom and dad. You know, it

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was a welcome trend. We started seeing mortgage rates heading

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towards eight percent, as now is relaxed and significantly lowered

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closer to the six percent range. It is also interesting

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that over the last sixty days, we've been hearing from

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our realtors that there's actually the no offers for thirty

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days has become a statistic. Again, Prior to that, there

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was offers happening the same day. Certainly in the same week,

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we're not seeing more homes on the market. While we're

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as good for origination and mortgages, it will certainly have

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a negative impact on prices. The supply and demand will

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eventually bring home prices down a little. However, with many

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people sitting on their three percent or less mortgage rates,

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we'll see continued reluctance to sell and to easily double

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their interest rate costs if they were to buy a

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different home. This will certainly keep the volumes of purchases

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a little lower than the boon times of housing turnover

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that we saw in the previous five to six years.

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Yeah, I am fortunate enough to sit in that cohort

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that is going to stay at home given the sub

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three percent mortgage refi during the during the COVID times.

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But let's touch on some statistics here that kind of

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point to your point. There is as of last month,

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of course, home prices nationwide, not just particular particularly to Maine,

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are up three percent year over year. The number of

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homes sold have decreased by roughly four percent, and shockingly,

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the number of homes for sale have risen I don't know,

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roughly sixteen percent or so. So let's talk about mortgage

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lending getting exciting. We both know that we're probably within

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our careers, Rick not going to see mortgage rates where

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they were in twenty twenty and twenty twenty one, given

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the rates that were in the environment during COVID, but

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with more rate cuts on the horizon, the increasing supply

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of homes, what does a path to excitement in this

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space look like for you?

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I think really looking to those statistics to gather gain

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more momentum. I do see that, like you said, there

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are more houses for sale, which is great. Hopefully we'll

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see those things, say the continue on in our area.

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Mortgage rates coming down just posted a six percent. It's

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starting to get a little more excitement in our mortgage lenders.

246
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We're actually starting to see our pipeline grow significantly. Oh

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that's growing a bout the millions of dollars at this point,

248
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So we're seeing that excitement start. It's at the time

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of the year, we're at the end of the season

250
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that's not typical, so it's obviously having some impact on

251
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the buyers in the market today, which is exciting to

252
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see us as we carry through the winter months when

253
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it's usually slower. Anyways, with this new trend, it's starting

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to get a little bit more of that excitement back

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in the heels of our mortgage lenders.

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I'll Start partners with banks and credit unions to grow

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households and expand consumer lending through its leading AI lending platform.

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259
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Whether you're looking to grow and enhance your existing personal

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00:14:57.600 --> 00:15:01.399
and auto lending programs or you're just getting started, Upstart

263
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can help. Upstart offers an end to end solution that

264
00:15:04.759 --> 00:15:07.600
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265
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266
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267
00:15:16.519 --> 00:15:20.360
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growing your business by visiting upstart dot com slash lenders.

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That's Upstart dot com slash lenders.

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Something we've of course talked about here is supplies up right,

271
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Demand however, is down year over year six percent. I'm

272
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interested to get your take on why is supply up

273
00:15:40.360 --> 00:15:42.720
but demand continues to be down. Do you think it's

274
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a rent versus own or is it a thing of

275
00:15:46.679 --> 00:15:50.360
kids coming out of college into the workplace just can't

276
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afford the homes and all that it entails, such as

277
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insurance and the cost to maintain a home. Or what's

278
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your take on why is supply up but demand continues

279
00:15:58.840 --> 00:15:59.159
to fall?

280
00:16:00.159 --> 00:16:01.720
Well, I think you touched on a lot of the

281
00:16:01.840 --> 00:16:05.120
real reasons why people aren't buying. First of all, the

282
00:16:05.200 --> 00:16:09.519
prices are still up. Prices are still you know, national

283
00:16:09.600 --> 00:16:13.399
statistics say that prices are still climbing. I think that's

284
00:16:13.559 --> 00:16:18.399
a lot of not looking as close to the real

285
00:16:18.440 --> 00:16:21.960
action that's taking place. While those numbers are still wagging

286
00:16:22.000 --> 00:16:26.320
a little bit, we're seeing prices have started to level

287
00:16:26.399 --> 00:16:29.240
off and even seen a little bit of tick downward

288
00:16:29.360 --> 00:16:33.240
in some areas. So that is helpful. But certainly, you

289
00:16:33.279 --> 00:16:37.480
know there's people graduating from college there, They've got a

290
00:16:37.480 --> 00:16:41.000
lot of student debt. It's it's almost a second mortgage

291
00:16:41.000 --> 00:16:44.879
in itself that's really keeping some of those on the sidelines.

292
00:16:45.919 --> 00:16:50.039
Interest rates still while at six percent better than eight percent,

293
00:16:50.679 --> 00:16:53.720
is maybe a lot of people are waiting for Oh,

294
00:16:54.000 --> 00:16:56.559
Raychi're gonna come down. Rachire going to come down. We're there.

295
00:16:56.600 --> 00:17:00.759
They're hoping for that. The economics are still pretty strong,

296
00:17:01.200 --> 00:17:04.039
The unemployment rate is still low. It's ticked down a

297
00:17:04.039 --> 00:17:06.119
little bit further over the last couple of days. So

298
00:17:06.559 --> 00:17:09.960
those things are really helping to boost, you know, consumer confidence,

299
00:17:10.440 --> 00:17:12.119
and I see that that is something that's going to

300
00:17:12.160 --> 00:17:16.680
continue to help hopefully gather some more momentum. See the

301
00:17:16.799 --> 00:17:20.400
rates maybe decline a little bit further, maybe see a

302
00:17:20.440 --> 00:17:23.799
little bit of reduction in prices. As people are keeping

303
00:17:23.799 --> 00:17:25.799
their houses on the market a little bit longer, they

304
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maybe want to reduce their prices. So I think we're

305
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hopefully poised to see some uptick in purchases over the

306
00:17:33.519 --> 00:17:35.079
next six to twelve months.

307
00:17:35.359 --> 00:17:37.160
Yeah, I agree with you, it's probably not going to

308
00:17:37.160 --> 00:17:40.920
be at a large capacity. So to touch further on that,

309
00:17:41.039 --> 00:17:45.400
let's let's reflect on the borrowers that, to your point,

310
00:17:45.400 --> 00:17:50.000
are sitting at a sub three percent mortgage rate. What

311
00:17:50.039 --> 00:17:52.559
do you think the mortgage industry is going to do

312
00:17:52.599 --> 00:17:55.319
from a helock perspective, as we could potentially see another

313
00:17:55.359 --> 00:17:58.319
two hundred basis point decline by the FED over the

314
00:17:58.400 --> 00:18:00.359
next you know, let's call it twelve month answer. So,

315
00:18:00.400 --> 00:18:02.839
do you think that helock space is going to continue

316
00:18:02.880 --> 00:18:05.799
to catapult as it has been over the last twelve

317
00:18:05.839 --> 00:18:08.279
eighteen months, or do you think there's going to be

318
00:18:09.000 --> 00:18:12.440
more individuals using the equity in their home for a

319
00:18:12.480 --> 00:18:16.519
cash out an extending term and increasing their rate potentially.

320
00:18:17.359 --> 00:18:20.799
Well, we see the needs and the demands for home

321
00:18:20.839 --> 00:18:25.559
equity lending just to be outpacing any other year. There's

322
00:18:25.599 --> 00:18:27.759
a lot of people sitting on a lot of equity.

323
00:18:28.079 --> 00:18:31.599
With the again values going up, people are using their

324
00:18:31.640 --> 00:18:35.160
equities for many things. They are again stuck at that

325
00:18:35.599 --> 00:18:38.400
three or sub three percent mortgage race, so they're not

326
00:18:38.440 --> 00:18:41.039
going to refinance to be able to put on that

327
00:18:41.079 --> 00:18:43.759
new addition. They're going to do a home equity and

328
00:18:43.839 --> 00:18:46.559
that's what we're seeing a lot of. We're actually seeing

329
00:18:46.599 --> 00:18:49.440
a lot of people taking advantage of their home equities

330
00:18:49.480 --> 00:18:52.839
and buying other properties. So we're seeing a second home

331
00:18:53.119 --> 00:18:56.319
or a seasonal camp or cottage on the lake. We're

332
00:18:56.319 --> 00:19:00.480
seeing that continue to be striving factor. And what we

333
00:19:00.519 --> 00:19:03.039
see on a daily basis. I don't see that's going

334
00:19:03.119 --> 00:19:06.759
to lower any demand anytime soon, as a lot of

335
00:19:06.759 --> 00:19:09.759
people are sitting on trillions of dollars in equity and

336
00:19:09.839 --> 00:19:12.359
we're seeing a lot of activity on a daily basis.

337
00:19:12.599 --> 00:19:15.200
Yeah, I would agree with that. That is the same

338
00:19:15.319 --> 00:19:18.880
type of conversation that I hear across the industry. So

339
00:19:18.920 --> 00:19:21.960
it'll be interesting to see the change of pace of

340
00:19:22.440 --> 00:19:25.720
how the mortgage industry moves forward here in the next

341
00:19:26.400 --> 00:19:29.160
few months. So let's fast forward. We've talked a lot

342
00:19:29.160 --> 00:19:32.640
about mortgage ricks. As you and I both know, mortgages,

343
00:19:32.680 --> 00:19:36.200
of course, are one of the largest portions of most

344
00:19:36.240 --> 00:19:39.880
financial institutions balance sheet, and for credit unions it's right

345
00:19:39.880 --> 00:19:43.160
around that forty or fifty percent range or so. But

346
00:19:43.279 --> 00:19:46.400
with your notion of a decline in mortgage originations in

347
00:19:46.440 --> 00:19:50.279
the short term, what is main savings plans to leverage

348
00:19:50.680 --> 00:19:53.279
or augment the balance sheet going forward with that decline?

349
00:19:54.519 --> 00:19:57.319
Yeah, I know, Drew. We are seeing that that hit

350
00:19:57.359 --> 00:20:00.960
our balance sheet with the mortgages and not having the

351
00:20:00.960 --> 00:20:03.720
origination so that people are still paying off, still moving,

352
00:20:04.160 --> 00:20:06.519
so we're seeing that balance is going down, So we're

353
00:20:06.559 --> 00:20:09.680
looking at other options, and that is one of the

354
00:20:09.759 --> 00:20:12.880
bigger areas that where we found a great benefit from

355
00:20:13.160 --> 00:20:18.559
when we started a referral program from local car dealerships.

356
00:20:18.759 --> 00:20:22.200
It wasn't intentional. We obviously didn't have the old golden

357
00:20:22.519 --> 00:20:25.839
rule apply for us that we saw what was happening

358
00:20:26.359 --> 00:20:29.000
that far ahead, but we started getting a lot of

359
00:20:29.039 --> 00:20:32.240
local dealers who wanted to work with us. We've never

360
00:20:32.279 --> 00:20:35.079
been and now don't have the intentions to become an

361
00:20:35.079 --> 00:20:38.319
indirect lending shop. But these small dealerships have given us

362
00:20:38.400 --> 00:20:41.240
plenty of referrals and we don't pay them any dealer

363
00:20:41.279 --> 00:20:44.480
reserves or referral fees, so it works well for us.

364
00:20:45.319 --> 00:20:47.720
Their thrilled to be able to have the fast and

365
00:20:47.799 --> 00:20:51.839
consistent decisions for their buyers. It has been so beneficial

366
00:20:51.880 --> 00:20:55.480
that the original referral dealers that we had spread the

367
00:20:55.519 --> 00:20:59.079
word throughout our local branch areas. This has continued to

368
00:20:59.079 --> 00:21:01.920
grow that part of our business. Over the last two

369
00:21:02.000 --> 00:21:04.839
or three years. We have seen our auto balances grow

370
00:21:04.960 --> 00:21:09.039
fifteen to eighteen percent each year just from the small

371
00:21:09.240 --> 00:21:14.880
organic growth from these small dealers with their small relationships

372
00:21:14.920 --> 00:21:17.640
with that they've developed with us. It's been very beneficial

373
00:21:17.680 --> 00:21:18.160
for us.

374
00:21:18.359 --> 00:21:21.559
That's awesome and one quick question off of that too,

375
00:21:21.680 --> 00:21:25.240
is you mentioned you don't do indirect lending, but this

376
00:21:25.319 --> 00:21:28.079
is somewhat in a sense, some type of indirecting. Of course,

377
00:21:28.079 --> 00:21:31.640
you don't have the cost associated with with what comes

378
00:21:31.640 --> 00:21:35.240
from from indirect lending. Do you have any insights for

379
00:21:35.279 --> 00:21:37.960
our credit union and bank listeners that are also not

380
00:21:38.079 --> 00:21:41.240
in indirect lending today on the best go to market

381
00:21:41.279 --> 00:21:45.559
strategy to leverage this asset without managing those dealer partnerships.

382
00:21:46.480 --> 00:21:50.400
Well, certainly they have to have the ability to pivot

383
00:21:50.480 --> 00:21:52.839
quickly and be able to make sure that that the

384
00:21:53.039 --> 00:21:57.119
borrowers and the lenders are always on the same page.

385
00:21:57.759 --> 00:22:01.039
You know, the dealership relationship is something that has been

386
00:22:01.200 --> 00:22:04.599
very beneficial for us, but also for our members. They

387
00:22:05.000 --> 00:22:08.000
are looking for those little bit lower priced vehicles that

388
00:22:08.079 --> 00:22:11.559
they can't get the big dealers, those big deals that

389
00:22:11.640 --> 00:22:15.480
have the higher overhead. So these small dealers have really

390
00:22:15.519 --> 00:22:19.000
been a huge benefit for our members as well as

391
00:22:19.039 --> 00:22:23.359
for us. So keep your eyes open for those type

392
00:22:23.400 --> 00:22:26.519
of relationships that can benefit not only you as a

393
00:22:26.599 --> 00:22:29.559
credit union or a small community bank, but they can

394
00:22:29.599 --> 00:22:32.799
help your constituents, your members, your customers be able to

395
00:22:32.839 --> 00:22:36.319
get a better deal. Obviously, be careful there are a

396
00:22:36.359 --> 00:22:39.920
lot of small dealers out there who maybe not selling

397
00:22:39.920 --> 00:22:43.920
the best quality of vehicles. So we've had to take

398
00:22:44.319 --> 00:22:46.640
our stance with a few of those that think that

399
00:22:46.680 --> 00:22:48.920
they're going to make a couple extra thousand bucks on

400
00:22:49.119 --> 00:22:51.920
a not such good quality vehicles. So just one of

401
00:22:51.960 --> 00:22:55.319
those things to be watchful for, watch those times for

402
00:22:55.519 --> 00:22:58.960
the title applications not being processed properly and quickly by

403
00:22:59.079 --> 00:23:03.200
those dealers. But it's been really a great eye opening

404
00:23:03.400 --> 00:23:06.720
relationship we've been developing, and it's been very beneficial for

405
00:23:06.880 --> 00:23:09.799
again the credit Union and our members.

406
00:23:10.160 --> 00:23:13.359
That's great. Thanks, Thanks Rick. So we've talked a lot

407
00:23:13.400 --> 00:23:18.920
about secured assets, mortgages, automobiles, a lot of the types

408
00:23:18.920 --> 00:23:21.359
of loans that most financial institutions of course want to

409
00:23:21.400 --> 00:23:24.440
put on their balance sheet. But with the decline in

410
00:23:24.599 --> 00:23:28.319
originations of course to mortgages and then of course the

411
00:23:28.680 --> 00:23:32.640
smaller dealer network that you're leveraging today, how do you

412
00:23:32.680 --> 00:23:37.160
think about the secured versus unsecured diversification in the current

413
00:23:37.240 --> 00:23:40.480
environment and in the future environment as the macro begins

414
00:23:40.480 --> 00:23:44.599
to stabilize, to leverage your balance sheet from a return perspective.

415
00:23:44.720 --> 00:23:47.839
Well, you hit a good spot in our balance sheet.

416
00:23:47.839 --> 00:23:52.319
We definitely need that diversification. We need those higher yielding loans.

417
00:23:53.039 --> 00:23:57.000
This means the focus on unsecured loans and credit cards

418
00:23:57.000 --> 00:24:00.480
has increased. We've seen a significant growth in our secured

419
00:24:00.519 --> 00:24:03.920
balances with the help of Upstart. Certainly, our partnership has

420
00:24:03.920 --> 00:24:06.880
been very beneficial to us. It allowed us to grow

421
00:24:07.000 --> 00:24:10.440
that business with good yields, as well as the confidence

422
00:24:10.440 --> 00:24:14.240
and the expertise of the Upstart decision matrix. While we

423
00:24:14.279 --> 00:24:16.599
limit the production to only a million dollars a month,

424
00:24:16.680 --> 00:24:20.079
we've certainly seen a steady growth of our unsecured balances

425
00:24:20.880 --> 00:24:24.240
that has sped that portion of our very hungry balance sheet.

426
00:24:25.240 --> 00:24:27.279
At the same time, we continue to work on our

427
00:24:27.359 --> 00:24:31.960
credit card vendor to increase limits or offer those special

428
00:24:32.119 --> 00:24:36.720
transfer balance promos. As strange as it sounds, every time

429
00:24:36.799 --> 00:24:40.440
we offer one of those balanced transfers, we see eighty

430
00:24:40.599 --> 00:24:44.359
to ninety percent of those balances stay after the promotion.

431
00:24:44.880 --> 00:24:47.319
I think we can probably, I'm pretty sure we can

432
00:24:47.440 --> 00:24:51.160
attribute that the fact that we are a local service

433
00:24:51.400 --> 00:24:54.359
credit union. We service all of our credit cards ourselves,

434
00:24:54.759 --> 00:24:58.720
and that really stands out to our borrowers linking at

435
00:24:58.759 --> 00:25:02.240
local professional heal help when they need it and they

436
00:25:02.279 --> 00:25:04.359
know they talking to their credit union. So I think

437
00:25:04.400 --> 00:25:07.240
that that has helped retain again that eighties and ninety

438
00:25:07.240 --> 00:25:09.839
percent that we've always gathered from each of those promotions.

439
00:25:09.839 --> 00:25:10.960
We run awesome.

440
00:25:11.519 --> 00:25:15.599
So mortgage lending is decreasing in the short term, we're

441
00:25:15.599 --> 00:25:19.200
going to juice things up from an auto perspective, and

442
00:25:19.240 --> 00:25:21.599
of course we're going to need to maintain some type

443
00:25:21.599 --> 00:25:26.400
of diversification, so the balance sheet is maximizing your your return.

444
00:25:26.480 --> 00:25:29.079
I think I summed up our conversation here pretty well.

445
00:25:30.680 --> 00:25:30.880
Rick.

446
00:25:31.279 --> 00:25:34.240
As you know, I always like to close the podcast

447
00:25:34.279 --> 00:25:37.839
out with three questions, so I'll just go rapid fire here.

448
00:25:38.960 --> 00:25:42.319
What is the latest and greatest app or technology gadget

449
00:25:42.359 --> 00:25:44.160
that you absolutely cannot live without.

450
00:25:45.720 --> 00:25:49.960
That's a great question. I really like technology and gadgets,

451
00:25:50.279 --> 00:25:53.720
but the thoughts I had was not towards the highest tech,

452
00:25:54.200 --> 00:25:57.200
but for something that makes my life easier. That's what

453
00:25:57.240 --> 00:26:00.680
I concentrated on. With the business of our life. I'm

454
00:26:00.720 --> 00:26:03.440
really falling in love with that fresh food delivery on

455
00:26:03.519 --> 00:26:06.440
a weekly basis. So take us away from our talk

456
00:26:06.480 --> 00:26:10.759
on finance, and I happen to use a company called

457
00:26:10.839 --> 00:26:14.039
Hungary Root, which referred to me by my CEO with

458
00:26:14.279 --> 00:26:19.039
two food allergies. It's the only fresh food delivery service

459
00:26:19.480 --> 00:26:22.799
that would accommodate for both of those issues. I don't

460
00:26:22.799 --> 00:26:26.960
do many food have any food issues, so just to

461
00:26:27.000 --> 00:26:30.839
fund the convenience of getting a variety of foods with

462
00:26:31.079 --> 00:26:35.160
average prep time starting for around fifteen minutes to be amazing.

463
00:26:35.839 --> 00:26:38.759
On top of that, the amount of food waste is

464
00:26:38.799 --> 00:26:41.440
almost eliminated that I don't have to stop at the

465
00:26:41.480 --> 00:26:43.960
store three or four times a week. I don't know

466
00:26:43.960 --> 00:26:46.440
about you, but simplifying this part of my life has

467
00:26:46.480 --> 00:26:47.599
been very liberating.

468
00:26:49.039 --> 00:26:51.559
I'm right there with you. I am guilty. I am

469
00:26:51.640 --> 00:26:55.880
not an expertee or an expert in the kitchen. I'll

470
00:26:55.880 --> 00:27:00.680
plug Hello Fresh. It helps with busy lifestyle and being

471
00:27:00.720 --> 00:27:04.480
able to have food prepared for my children pretty quickly.

472
00:27:04.559 --> 00:27:07.519
All right, Question number two, If you could switch jobs

473
00:27:07.519 --> 00:27:09.759
with anyone for a day, who would it be and why?

474
00:27:11.960 --> 00:27:14.480
You know? My first thoughts went to people like Warren

475
00:27:14.519 --> 00:27:20.440
Buffett or a strong political leader like our main congresswoman

476
00:27:20.640 --> 00:27:24.519
Susan Collins. However, I really thought it would be amazing

477
00:27:24.559 --> 00:27:28.079
to be someone like Scottie Scheffler, one of the top

478
00:27:28.119 --> 00:27:31.519
professional golfers in the world today. It'd be amazing to

479
00:27:31.559 --> 00:27:35.160
be a top of the world's greatest athletes and your profession.

480
00:27:36.039 --> 00:27:39.880
I love his consistency, his control over his emotional and

481
00:27:39.960 --> 00:27:43.640
mental faculties. What really focused my attention on him was

482
00:27:43.640 --> 00:27:46.559
the ordeal he went through earlier this year when he

483
00:27:46.599 --> 00:27:50.880
was as a disturbing and unjustified detainment by the police

484
00:27:51.200 --> 00:27:54.039
on the morning of the final day of a professional tournament.

485
00:27:54.319 --> 00:27:57.799
He was released with no account of wrongdoing, but ended

486
00:27:57.880 --> 00:28:01.759
up arriving late to the turn. He couldn't do his

487
00:28:01.839 --> 00:28:04.839
normal warm up or his practice, but ended up coming

488
00:28:04.839 --> 00:28:08.119
in second place. To have that kind of mental and

489
00:28:08.160 --> 00:28:11.559
emotional stability puts him at the top of my list

490
00:28:11.759 --> 00:28:15.799
for amazing people. For me, being a wanna be golfer,

491
00:28:16.240 --> 00:28:19.400
this is incredibly motivating. If during that one day I

492
00:28:19.440 --> 00:28:22.559
could pick up on the mental strength he possesses while

493
00:28:22.640 --> 00:28:25.519
learning a few things to make my golf a little better,

494
00:28:26.119 --> 00:28:28.000
certainly wouldn't hurt my feelings any.

495
00:28:28.160 --> 00:28:31.319
Or Two for two, Rick, I would also agree with

496
00:28:31.559 --> 00:28:34.319
wanting to be Scotti Scheffler, given what he went through

497
00:28:34.359 --> 00:28:38.000
at Valhalla a few months ago. But I also enjoy

498
00:28:38.079 --> 00:28:41.680
the game of golf and wish I could produce scores

499
00:28:41.720 --> 00:28:46.599
as such as Scotty Scheffler. So last one does not

500
00:28:46.720 --> 00:28:49.279
need to be pertained to lending in any facet. But

501
00:28:49.319 --> 00:28:51.319
what is one bold prediction for the future.

502
00:28:52.599 --> 00:28:53.799
That's a challenging question.

503
00:28:54.640 --> 00:28:56.440
I'm sure this one will disagree with.

504
00:28:57.559 --> 00:29:00.880
But maybe not. I think there's no doubt the lot

505
00:29:01.039 --> 00:29:04.640
of bold predictions about the economy and interst rates, but

506
00:29:04.720 --> 00:29:07.799
that's not where my mind first went. My thoughts went

507
00:29:07.880 --> 00:29:12.240
to AI or artificial intelligence. My prediction is that AI

508
00:29:12.400 --> 00:29:14.759
will morph to a stage in the next five years

509
00:29:15.279 --> 00:29:19.000
that we will not recognize our industry or even interactions

510
00:29:19.000 --> 00:29:22.799
with service and technology companies around the world. Well, this

511
00:29:23.119 --> 00:29:25.640
all sounds and feels scary. You know, we've all watched

512
00:29:25.640 --> 00:29:28.759
those sci fi movies with a computers take over the world,

513
00:29:29.200 --> 00:29:32.720
and I'm confident that this technology will simply enhance our lives.

514
00:29:33.119 --> 00:29:35.279
It is. It will get us to the point I

515
00:29:35.400 --> 00:29:37.880
keep preaching on to my staff that we want to

516
00:29:38.200 --> 00:29:42.079
work smarter and not work harder. Who knows, maybe this

517
00:29:42.119 --> 00:29:43.799
could get us to the four day work week we

518
00:29:43.880 --> 00:29:44.319
all want.

519
00:29:46.319 --> 00:29:48.759
Well, I think we're three for three. Of course, I

520
00:29:48.759 --> 00:29:51.720
have many bold predictions, but I would agree with you

521
00:29:51.839 --> 00:29:55.000
on the movement of AI is going to definitely elevate

522
00:29:55.480 --> 00:29:59.000
in the very very near future. Well that wraps this

523
00:29:59.079 --> 00:30:01.880
episode of leaders and Lending. As always, thank you to

524
00:30:01.920 --> 00:30:04.160
our listeners and Rick again, thank you for taking the

525
00:30:04.200 --> 00:30:05.079
time to join me today.

526
00:30:05.680 --> 00:30:07.920
Well great, Thank you very much Drew for having me

527
00:30:08.880 --> 00:30:10.559
do a great job, and I hope you continue while

528
00:30:10.599 --> 00:30:11.680
this is great service.

529
00:30:12.400 --> 00:30:15.519
Upstart partners with banks and credit unions to grow households

530
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531
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Whether you're looking to grow and enhance your existing personal

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and auto lending programs or you're just getting started, Upstart

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It's all possible with Upstart in your corner. Learn more

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That's upstart dot com slash lenders.