Lending Department Organizational Design Options

In my ten years of extensive travel in our industry I have come across three different ways that credit unions can choose from to organize their front-line employees who are given the responsibility of making loans to members. I will present these three organizational design options, provide the pros and cons associated with each option, and offer my preferred structure that will enable you to maximize lending success.

Dedicated Lending and Member Service Positions

I see separate lending and member service departments most often at credit unions that are $30 million to $100 million in asset size. In this organizational structure, dedicated loan officers work up the member loan requests and different employees who are member service reps (MSRs) open the new accounts, handle member service needs, and also perform the various account

maintenance responsibilities. This organizational design has the following positive and negative features:


  • Loan officers get good at lending because they are specialists that are dedicated to making loans.
  • Employees end up gravitating to the department and the responsibility that they like more—loans or member service. When employees like what they are asked to do, they generally do better at their job.
  • One employee is not asked to become an expert on every loan product, policy, and process as well as the myriad of member service duties.
  • Quality work gets done in both departments because employees are experts, which leads to greater member satisfaction.
  • Training time is reduced because employees do not need to learn everything.


  • Just because a loan officer has strong product knowledge and underwriting experience does not necessarily mean he or she is any good at selling. As a matter of fact, I would say that most experienced loan officers in our industry (defined as more than five years of credit union lending experience) today seriously lack sales skills.
  • Many times the dedicated lenders at these credit unions have low production numbers because there just aren't enough loan applications and sales opportunities coming in the door or calling up by phone to keep these employees real busy.
  • Very few loans and very little selling is done by the MSRs during the new account process. And what a shame this is, because the new account process is a wonderful time to steal loans from the enemy. There are very few times in a member's career with you that they are planning to give you 45 minutes of their time. How are you spending it? MSRs get all of the paperwork done neat and tidy, but sales people are able to steal loans off the credit report during the new account process.
  • Very little selling gets done on the deposit side of your business. Again, MSRs were not hired for their sales skills; they were hired for their accuracy, patience, and member service qualities.
  • MSRs get annoyed that the Sales Department employees get the big bucks on their loan incentive sales program.
  • It is very easy for the “that's not my job” attitude to grow and fester in this organizational structure.

One-Stop Shopping Positions

Most larger credit unions in the country today utilize the one-stop shopping organizational design that has a single employee opening new accounts, doing all the various lending duties, and also taking care of the member service functions and the account maintenance needs.


  • More products and services can be delivered to the member by a single employee.
  • When one employee can do everything for a member it increases your speed of loan and service delivery.
  • Every single member contact can in theory result in a sales opportunity.
  • Loan sales can be made during the new account process because the same employee is working up both the new account and the loans.
  • All one-stop shopping employees are on the same variable pay incentive program, so the whining is cut down to a manageable level.
  • Meaningful member relationships are more easily developed because everything can get done by the member's favorite employee.
  • The “that's not my job” attitude disappears in this structure because the one-stop shopping employee is tasked to do all of the work that a member requires.


  • In a one-stop shopping environment you are asking one individual to be very knowledgeable on a lot of different subjects. I challenge you senior managers to make a list of everything in which a one-stop shopping employee is expected to become proficient. That list is overwhelming.
  • Because of the very long list of duties associated with this structure, there is a very lengthy training curve for new hires.
  • The list of topics to train one-stop shopping employees is as long as your arm. You can spend two hours a week training employees and do it every week of the year and you may not get all the topics covered.
  • About the time your one-stop shopping employees get it all figured out (two or three years?), they quit, change jobs at the credit union, or you ask them to hit the road because they aren't any good at the job.
  • Very rarely does one employee have both the qualities needed to be successful in selling as well as the qualities needed to be great at servicing member needs. In other words, the skills needed for these two different duties are very different.
  • Managers are often frustrated because employees never get quite good enough in all areas of responsibility. How many times have you managers of this organizational structure wanted to scream or pull your hair out because your front-line employee just can't seem to do things right? And this is regardless of the countless hours of training that you have given them.
  • Loan and sales production numbers are usually low because many employees don't like selling and/or they are not very good at selling.
  • The bottom line with one-stop shopping MSRs is that you get “jacks of all trades” but “masters of none.”

Dedicated Sales and Service Positions

A very small number of credit unions (of varying asset sizes) that I have come across in my travels have adopted a true sales and service organizational design for their front-line employees. This structure is similar to the loan and member service department structure that I described previously, but it has two key differences:

  • The Sales Department is not just working up loans; it also includes the responsibilities of opening new accounts and selling new deposits. The best way to look at the sales-area responsibilities is to think of them as the “Day One” activities of new accounts, new deposits, and new loans.
  • The Service Department does everything for a member after a sale occurs. For example if a member's loan is not being paid correctly because of a payroll setup error, a service department employee would solve that problem, not a Sales Department employee. The best way to think of what gets done in the service area is to think of all the work that is required from days “Two through infinity” to deliver outstanding member service.

The dedicated sales and service department organizational structure has the following advantages and disadvantages:


  • Employees get very good at their jobs and so they will therefore have higher production numbers.
  • Manager frustration levels drop significantly because employees are a lot better at their jobs.
  • Employees are generally happier because they are not trying to become someone they are not (i.e., order takers do not need to become sellers).
  • Training for the sales and service departments is reduced and simplified.
  • This structure solves most if not all of the challenges associated with having a rich variable pay plan for sales people at a credit union (if you set it up correctly).
  • Because employees become experts, their quality of work is better, thereby resulting in more satisfied members.
  • Because employees gravitate to the department that they like best, there will be less employee turnover, which saves the credit union both time and money.


  • Members are transferred to various departments for various questions. A top-notch seller for example could explain to a member at the end of a car loan application why their two checks bounced last week, but you would not want them to have this conversation. Sales people need to stay focused on selling and so they need to transfer the account-maintenance questions to a Service Department employee.
  • Sales opportunities may be lost because a Service Department employee does not have the skill or desire to run with a sales opportunity or refer the member over to the Sales Department while performing their service duties.
  • Jobs become more routine; so managers will have to deal with employee burnout.

I have personal experience with all three organizational structures. At my prior credit union in Las Vegas I was the vice president of lending in a one-stop shopping environment for three years and then we made the big change of switching to the sales and service structure for my last two years. I have also been to countless credit unions that utilize the lending and member service department structure and I have seen first-hand the pros and cons of this organizational design.

Hence I feel qualified to state the greatest lending success will come from a sales and service department structure. Over the last seven years I have helped about fifteen credit unions go down the road of making the organizational design change to dedicated sales and service departments, with front-line staff separated into dedicated sales and service positions. To my knowledge, none of them have since moved away from this structure. Please note that none of the three design options is perfect, but if you study the pros and cons of each you will see the benefits of the sales and service organizational design are significant.

Brett Christensen is owner of CU Lending Advice, LLC. Contact him at or 800-219-9733.

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