John Anderson was doing some math.
As Chief Lending Officer at Center Parc Credit Union, he was looking at a loan-to-share ratio that was a little higher than he would’ve liked, with a visit from the examiners just around the corner. Then a call came out of the blue.
Anderson’s contact at LendKey had a buyer looking for loans and ready to close—and close quickly. Ideally, they wanted everything wrapped in about a week. The timing of the call was fortuitous, the schedule exciting, but it also gave him pause.
“I had my reservations,” Anderson says. “I’m not going to lie. A $20M participation can take around eight weeks to go through, so making that happen in a fraction of time? That was ambitious.”
Ten days later, however, $20 million had moved off Center Parc’s books.
“Honestly,” he adds, “the speed with which it all came together was probably the most shocking thing of it all.”
How it all came together
Because LendKey already services the loans it originates, there’s less heavy-lifting around due diligence, policy reviews, document uploads, loan tape transfers, sample sets for underwriting review, and all the work that makes accounting teams break into a cold sweat.
“LendKey being the servicer, they already have all the information,” Anderson explains. “That’s 99% of the lift LendKey was able to handle for us. It was really a hands-off process. That just kind of made it a no-brainer.”
Putting every dollar to work
On the buying side, Anderson’s counterpart at Great Lakes Credit Union had a very specific problem, too: Fred Campobasso was looking at surplus capital. That bothered the CLO whose philosophy is: “Every loan we make is an investment in someone.”
Great Lakes is a low-income designated credit union serving the greater Chicago area—a $1.4 billion institution offering ITIN mortgages to immigrants, running a branch in a west-side Chicago financial desert, and providing 0% credit builder loans that make no profit but give people a lift up. The credit union really is built around putting every dollar to work for members.
“Of course, yield is important for the credit union too,” says Campobasso. “Better returns become higher dividend rates and lower loan rates for members—it’s the green zone—so it was important that the Center Parc loan assets offered high returns for our team.”
To ensure that was the case, Campobasso and his team did their research, including running a 10% loan sample and asking one question: would we have made this loan ourselves? The answer was yes.
“It really checked all the boxes,” Campobasso says. “And it worked incredibly well. It was smooth, it was simple, and it was completed so quickly. I anticipate LendKey will be one of our go-tos [for loan participations] in the future.”
The mechanics of good math
Center Parc’s loan-to-share ratio increased because Anderson’s team was doing its job and originating good loans when demand was high. The only alternative was a non-starter: turning members away.
“If my primary institution says, ‘Hey, we can’t help you,’ then that becomes less likely to remain my primary institution in the future,” Anderson says. “That’s the worst-case scenario, period. It’s bad for the member, and it’s bad from a long-term lending perspective, too.”
That speed and flexibility means Center Parc can lend with confidence, knowing there are reliable options to manage their balance sheet when demand runs hot. On the other side, Great Lakes deployed $20 million into assets that fund exactly the kind of mission-driven lending that defines the institution.
A shared mission for the movement
For LendKey, this transaction is one example of what the network was built to do.
“This is exactly why we built ALIRO,” says Vince Passione, Founder and CEO of LendKey. “We talk a lot in this industry about balance sheet management and yield optimization. But step back and look at what actually happened here: one credit union kept lending to its members instead of turning them away, and another put surplus capital to work.
“Those aren’t abstractions. Those are cars getting people to work, homes where families are raised, educations that change trajectories. That’s the credit union mission in action—and it’s precisely what ALIRO exists to do.”
LendKey’s ALIRO platform facilitates loan sales and participations across a national network of credit unions and community banks. Learn more and get in touch with our team to see how LendKey can help your organization.