Essential Lending Training William Jason Goodwin-February 27, 2017

Essential Lending Training Agenda Background Purpose of Project Problem Identified Research Method and Procedures Analysis and Findings Recommended Action Plan

Background Essential Lending Training

Background Arkansas Federal Credit Union (AFCU) humbly began in the 1950’s as Little Rock Air Force Base Credit Union Became Arkansas’s Largest Financial Cooperative AFCU experienced extreme growth with new CEO, doubling within 5 years Resulting centralization: processing and underwriting Department Combination: Centralized Loan Processing + Centralized Loan Underwriting = Direct Consumer Lending Frontline decentralization and turnover resulting in inconsistent service

Purpose of Project Essential Lending Training

Purpose of Project Identify deficiencies in training and development Many different approaches to training have failed Focus on transfer of learning Poor service goes against the credit union moto: People Helping People With continued growth and turnover, consistency and compliance struggles will only compound

Problem Identified Essential Lending Training

Problem Identified Inconsistent service, specifically in the area of lending Inadequate follow up Poor communication Making business difficult for members Members look for the path of least resistance AFCU must differentiate by providing an easy, memorable, and consistent experience

If left unresolved, AFCU will experience difficulty on two levels: Reputation Brand controlled by member experience Owned by members-broken by members Regulatory risks Fines to credit union and individual Noncompliance can affect financial resources Member Experience Compliance

Research Methods and Procedures Essential Lending Training

Research Methods and Procedures Surveys Sample: All lending personnel hired since July 2016 including frontline staff, support staff, and internal transfers Content: Questions regarding training experience during onboarding, lending specific in the service center, and ongoing training to support initial training

Research Methods and Procedures Interviews Sample: Lending leadership responsible for new lending staff hired since July 2016 Content: Perspective concerning current lending training and the future development of the program

Analysis and Findings Essential Lending Training

Analysis-Surveys Interviewing and Sales Follow Up and Loan Closing Questions 1-7 divided into 3 categories Each category rated 5-1 (5=Strongly Agree, 1=Strongly Disagree) Questions 8-9 were short answer Question 10 was open to any additional comments Interviewing and Sales Credit Analysis Follow Up and Loan Closing

Analysis-Interviews Current Structure Future Needs Ten questions on perspective Current lending training structure Suggestions for future development Current Structure Future Needs

Findings-Surveys Most confident in Credit Analysis Some struggle with Interview and Sales Significant deficiency in Follow Up and Loan Closing

Findings-Interviews Importance of ongoing training Immediate supervisor should be ultimately responsible for training Trainer should be expert in the field they are training Accountability for lack of performance

Recommended Action Plan Essential Lending Training

Recommended Action Plan Standardized training program-Essential Lending Training Frontline training: Initial training by Direct Consumer Lending (DCL) In branch training by designated branch staff Ongoing training and evaluations would be a combined effort from DCL and branch trainers Support staff training: Initial, experiential, and ongoing training performed by designated staff within the department

Recommended Action Plan Personnel Structure Head of Essential Lending Training reports to EVP/CLO Works closely with designated training staff Develop curriculum and ongoing training

Recommended Action Plan Scheduling: Initial training Adapt to branch schedule Schedule Initial Training 1-2 weeks Follow Up Training Determined by branch Ongoing Onsite Training Tuesday-Thursday based on availability

Recommended Action Plan Cost and Resources needed: Salary for head of ELT Office space Workstation Training material and supplies

Feasibility Urgency

Feasibility Few additional resources needed Minor organizational structure change Urgency Immediate need Ensure future success Promote loyalty

AFCU Legacy Essential Lending Training This training will help protect and further build the reputation of AFCU as the preferred financial institution in Arkansas.