The job of Chief Lending Officer is no small task. A key position, the CLO usually reports directly to the CEO, responsible for the development, management and oversight for credit union lending in the consumer, mortgage and member business lending programs. In other words, they are the person largely responsible for the long-term survival of your credit union. Not just "the numbers man/woman" anymore, this is a job comprised of sales, consulting, management, and now more than ever, technology.
If there is a server outage or firewall issue, the Chief Lending Officer is not the person to call. However, when it comes time to submit your quarterly call reports to the NCUA, you can bet the CLO is going to be involved. They should be able to use the technology available through the core and retrieve the data needed to calculate key ratios, and to determine how that same technology can better your CU's position in these areas:
1. Loan originations per employee: This productivity ratio can help your CU assess efficiency in human resource deployment toward loan production. A large portion of your revenue comes from lending, and if your members aren't borrowing from you, it may be a good time to measure loan originations per full-time employee and see where technology can help your employees be more efficient. With advances such as mobile lending, electronic document flow and e-Signature, your credit union should be able to increase the number of loans funded, without increasing the number of full-time employees. Providing your loan officers with the tools necessary to perform their job function more efficiently will benefit this ratio.
2. Loan-to-share: This measure of your credit union’s ability to lend is necessary to generate the earnings necessary for long-term sustainability, and is an area where you have greater control. In general, credit unions have more influence over loan growth than share growth. Deposit growth is generally influenced more by non-operational factors like membership demographics or the economy, items out of the CLO's control. However, loan growth can be obtained with changes to sales culture, training, marketing, etc. The greater the loan-to-share ratio the better the profitability. Loans are what power your credit union’s earnings, so gauging loan growth in comparison to other credit unions, banks, and the market overall will improve this figure. As the market/economy fluctuates and dictates member deposits, CLO's need to be sure their loan growth is keeping up and an efficient loan origination system (LOS) with competitive loans should make this possible.
3. Average member relationship: This all-important metric rides highly on the success of mortgage lending, as this category comprises the longest terms lengths and highest dollar amounts. While mobile lending is not a big player in the mortgage game, technology such as e-Signature will speed up the mortgage process, so your employees can process loan documents more efficiently, and your members will be thrilled with what was once an extremely stressful and time consuming-process.
By applying technology to your credit union operations, you stand to gain valuable insights into how efficiently you are using the assets you have as well as where you are suffering from imbalances. The more efficiencies technology creates, such as speeding up the lending process with e-Signature and electronic document flow, the better these ratios will perform. The more member services you offer to ease the lending process for members the more willing members will be to borrow from you and the easier your job as CLO becomes.