The Credit Culture came about during my first go round at retirement. In mid 2015 I had just completed a year as the Chief Credit Officer post-merger at our bank. The merger in 2014 expanded our footprint to a national level from the California community bank we were. At that point in 2015 I had also reached 35 years as a commercial banker with the last 15 years as Chief Credit Officer, including the one-year post merger. However, something was missing.
I retired in 2015 and began pursuing something that I felt strongly about for a long time; credit training. I was the product of a formal credit training program back in the late 1970’s and early 1980’s. A structured training program designed to take fresh college graduates and provide them with the training and tools to make business loans. I’ll come back to credit training in a bit.
First, let me define some terms. Back in that formal credit training program we were being taught how to be a commercial loan officers; some would call us business lenders. Commercial loan officers were bankers who sat down with all size businesses and determined what the business needed. We discussed what would best suit their needs; a commercial or business loan, a line of credit or a term loan for equipment or other business purposes. A commercial loan officer would gather a company's financial statements, spread and analyze them. The commercial loan officer would ask questions of the prospective borrower and determined if the loan amount, loan terms and the required repayment source would be adequate to repay the loan. A complete beginning to end process all conducted by one commercial loan officer.
With the definition of a commercial loan officer out of the way, let me continue with my journey. From 2015 until the middle of 2019 through The Credit Culture I developed some introductory webinars for several banking industry groups. The formal credit training I was fortunate to experience was not really being offered any more. Numerous economic down turns and recessions between my time in a training program and the year 2000 caused so many banks to scrap training programs. Sadly, those programs were easy expenses to cut when things got tight. I often heard the rationale that we should not spend money to train someone who is just going to pick up and leave after we train them. Now there may have been some truth to the latter comment. The decades long result of no real formal training left the commercial lending area of banking with fewer and fewer trained and experienced commercial loan officers. I believe it has been a driver towards more and more centralization.
Was I going to solve the problem for banking? Hardly not, yet I was hopeful that some more attention to the issue might help. I spent those four years doing my little part. In the middle of 2019, a CEO of a bank called and asked if I would come out of retirement and help him take a bank in a new direction. The CEO was someone I worked with for nearly ten years as part of an executive management team. I set aside The Credit Culture to jump back into the real world of banking. My two-year commitment to help turned into five.
I am now starting my second go round at retirement (R2); or as my wife refers to it; Repurposing my life (again). That is a little background on me. In the following installments of the Credit Culture Magazine I will cover topics ranging from what my plan is in R2. A discussion of the need for a definitive lending textbook. I will start into some formal commercial loan officer/credit training material to get everyone starting down the road to commercial lending.
“Keep asking the question; Why?”