CU Structured Finance

CU Structured Finance, LLC is a subsidiary of TMG Financial Services that helps CUSOs secure and collateralized their debt needs. The goal is to structure strongly-collateralized loans that create a win-win for the participating credit union and CUSO.

Launched in September 2010, CU Structured Finance has created an industry conduit to promote partnerships among credit unions outside their own geographic regions. Immediately after its launch, CU Structured Finance executed agreements for $22 million of funding for mortgage CUSOs, providing services to over 100 credit unions. The program remains a viable option for credit unions seeking liquidity.

Credit unions have more liquidity than in any time in recent memory. Plus quality loan demand is soft as members have been cautious in this economic downturn. In addition, CUSOs are often limited in their growth to their ability to borrow from their credit union owners. This can limit the potential of a CUSO, such as a mortgage or business lending operation that closes loans in the name of the CUSO. In the past Corporate Credit Unions often filled the role of CUSO lender to help fund the growth. With the changing regulations and restrictions for Corporates, that lending capacity is often not an option for CUSOs today. Our secured line of credit approach allows the CUSO the capacity to grow by tapping credit unions outside their ownership group looking loans with strong returns from CUSOs with solid operations.

When working with a CUSO, we complete a due diligence packet on the CUSO, the specific asset class that would be collateralized and assist the CUSO in finding funding beyond their credit union owners. In addition, once the agreements between the credit unions and CUSO are completed, we provide ongoing monitoring to assist the lending syndicate in analyzing the collateral and ensure that the balance of loans to assets are maintained.

Advantages for CUSOs:

• Access to capital beyond the capacity of credit unions owners
• External third-party monitoring of the loan, keeping an arms-length transaction
• Ability to access credit as the need arises by expanding the lending syndicate
• Market price for loan rates

Advantages for credit unions:

• Ability to put excess liquidity to work in the credit union industry with strong collateral backing
• External third-party monitoring of the loan, assisting with regulatory due diligence requirements
• Perfected security interest in specific collateral, as well as potential owner guarantees.

For more information, contact:

Jeff Russell, President
CU Structured Finance, LLC
515-457-5475