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Joel Swanson, EVP and Chief Lending Officer at VyStar Credit Union, joins host Curtis Wagner of Zest AI to share how a pricing pitch to a credit union CEO changed the way he saw the industry, and how he took over lending right as the post-pandemic credit cycle turned. Joel explains why so many 700+ credit scores turned out to be risky, what VyStar found when it checked whether its AI underwriting model was to blame, and how it has handled 22% more applications with 15% less staff without layoffs. He and Curtis also cover explainability and regulators, VyStar's head-and-heart approach to community, his contrarian view on rates, and why assets are the most overrated metric in credit unions.
Every loan starts with a story. So does every lender.
Origination is where the leaders of consumer lending come to tell their story.
Each episode unpacks the origin story behind a leader's progression in lending, and the industry challenges they're working on right now. They’ll dive into topics like growth strategies, modernizing legacy processes, how to adapt to changing borrower expectations, and competing in an evolving lending landscape.
If you make lending decisions for a living, or are building the technology behind them, this show is for you.
Origination is brought to you by Zest AI who provides AI-driven underwriting, fraud detection, and lending intelligence for credit unions and banks.
Learn more at zest.ai.
speaker-0 (00:52)
Well thanks for joining us, Joel. I'm thrilled that you are able to set some time on a on a Thursday for us. I know you're busy. for those who don't know, Joel's Joel's the EVP and chief lending officer of VyStar, who is very near and dear to our hearts. They were our first custom credit union customer way back in 2018, I think, something like that. and our first credit union investor. So VyStar is is is part of the family. And again, thank you, Joel, for for taking some time with us to share your story and share some of VyStar's story as well.
speaker-1 (01:20)
Yeah, glad to be here.
speaker-0 (01:21)
I've known you for several years and I know that your personal story, at least as it relates to credit unions, starts way up in Alaska. maybe we can kind of start there. How did you how'd you find credit unions to begin with?
speaker-1 (01:35)
Yeah, I think a lot of people don't know about credit unions, members or employees, right? the not for profit member owned financial cooperative sounds like a marketing gimmick. At least it did to me. Yeah. Right. Like, okay, sure. You're really just a bank. You're just trying to sound nicer. You know. And so I was sitting across the street working for a not a credit union, miserable in the job that I was in. And across the street was Alaska USA Federal Credit Union. now it's global credit union. I I'm not used to that, I never worked there with that n that new name.
speaker-1 (02:04)
but everyone walking in and out of the building just looked nice. And I was like, you know what? I bet you that's a great place to work. Didn't care about the fact there was a credit union, anything else. I'm like, I'm gonna try to work there. so I got a job there, and I still thought it was just a gimmick for the first several years, right? In IT at the time. And I finally got out of IT, which was my goal of going there over to the business side, and I got the opportunity to bring forward a pricing proposal, right? And
speaker-1 (02:28)
As I'm a business guy, right? Did the whole MBA thing. I'm like, I know how to do this. I'm gonna maximize the price that I can get for this, whatever the market will bear, maximize revenue, right? So I bring forward my recommendation, my first time pitching directly to the CEO, big boardroom table, super nervous, that whole thing. And he looks at me, he goes, Yeah, but what's the least we can charge and break even? And in my heart of hearts, I'm like, this guy's an idiot.
speaker-1 (02:52)
Right.
speaker-0 (02:53)
I've done.
speaker-1 (02:54)
Thankfully I had enough wherewithal to not tell him that. But I didn't think he was he was he would had all of his his marbles. but then on the way home that night I'm like, wait a second, that's what makes this different. Right. And so I'll stop there, but that's kind of how it started for me of realizing that these really are different types of organizations.
speaker-0 (03:11)
And so walk me through. So from there, you were in IT to start. one thing that I'm researching a little bit, you've made a lot of different kind of pivots throughout your career to different functions. I wonder why do you think you've been so successful in that regard? In in that instance, IT to the business side and now from branches, ops to lending. Kind of walk me through why you think why have you been so successful in those in those pivots, do you think?
speaker-1 (03:37)
Well, the first one almost broke me. Right. I wanted to be more core of what the business was providing and not in a support role, which is what IT is. my undergrad was business, as I mentioned, and and masters and everything else. And so I wanted to get out of IT. and sometimes you gotta be careful what you ask for. Right. That first transition over, I also didn't want to take a pay cut and go back in my career. So I went laterally, but to to support the IT pay band, which is higher, they had to give me a bunch of stuff to manage.
speaker-1 (04:03)
But I knew nothing about. Right. They gave me a settlement group initially, an ATM group, digital product ownership. And then I was supposed to help with tech projects on the business side. A few months in the SVP quit and they gave me a bunch of other stuff. And I didn't know any of it. And so going through that stress and anxiety during that time, which genuinely almost broke me as a person, yeah, after I got through that and realized, hey, I I learned that.
speaker-1 (04:32)
I figured out how to be effective and make a difference. Once you realize you can do that and you have that confidence, you can pivot that to anything. And so from there, as there's been it's been really based on more where there's need, and I can be plugged in as a leader to go in and learn an area. And that's now more my experience than the thing itself is my ability to learn and try to make sure that we're aligning with whatever it is the organization's trying to do. and that's just given me tons of awesome opportunities.
speaker-0 (04:58)
how do you learn how do you learn new stuff?
speaker-1 (04:59)
you have to be you can't be insecure. You have to be willing to own the fact you don't know it, even to people that work for you. That initially you're like, well, if they work for me, then I should be smarter than them at their thing. But you have you have to get over that. Yeah. Right. And be willing to ask the stupid question. Curtis, I'll never forget. It's still a stupid question. I still asked it. So you're familiar with a 16 digit card number, right? Mm-hmm. In banking, the first six digits called a bin, right? Yep. I was leading a commercial card conversion. I was the one in charge of it.
speaker-1 (05:27)
And asked on a call with forty people what a bin was.
speaker-0 (05:31)
And they didn't walk you out of the building?
speaker-1 (05:32)
Well, I was the one in charge of it. So the vendor was gracious enough not to say, Who is this guy? And what is he doing? But you have to be willing to ask those questions. If you don't know, you have to ask. I remember asking what dual control was at one point. I had to ask everything. Now I don't ask those questions anymore. I've learned a little bit about banking in general. But that first transition, it was brutal.
speaker-0 (05:53)
And so back to that first transition, you're in the business side now. How does that translate to Jacksonville? How do you get from where you were in Alaska? What were you doing specifically on the business side at that point?
speaker-1 (06:04)
At that point, I was running their eighty-six branches across four states.
speaker-0 (06:08)
Okay. Wow. And so how do you translate that? how do you end up in in Florida?
speaker-1 (06:14)
Just follow the sun, baby. Yeah. Yeah.
speaker-0 (06:16)
That's one way. That's one way.
speaker-1 (06:18)
No, Anchorage, Alaska is where my wife's family was from. That's what brought us up there. and it's a beautiful, beautiful place, but the winters do get a little long. And we'd been there 13 years, had younger kids, and we were going to the mall to get the kids exercise because you couldn't walk outside because it was too icy, right? So we were ready for a a move, but didn't know exactly what that was gonna look like. and then Brian Wolfberg became the CEO at VyStar and he had been my boss there.
speaker-1 (06:42)
and he was the leader that I wanted to keep working for the rest of my career for. I really, really enjoyed him. There's some other great leaders obviously there too, but Brian Brian was special. and so my family and I moved four thousand miles to to follow him. And of course, the sun and and weather didn't didn't hurt.
speaker-0 (06:56)
Yeah.
speaker-0 (06:56)
although I've been to Jacksonville in the summer. It's it's hot.
speaker-1 (06:59)
It can be. Yeah, it can be it can be. I learned that we go through three outfits a day down here for a reason.
speaker-0 (07:05)
I
speaker-0 (07:05)
walked outside I walked outside in your hands, you just feel it. I'm from Los Angeles. and so it's new to me, that type of humidity. so what happens at VyStar You're what's the what's the role to begin at at VyStar?
speaker-1 (07:16)
So I went from managing about I think it was about nine hundred people, maybe a thousand people in in the branches, to having one direct report here as the chief digital officer just to help reframe our digital strategy. And that was a gut check too, right? But I had to do what I thought was right for my family and and long term career prospects. but then very shortly after that, I got a bunch of stuff added, ops, payments, branches, contact center, stuff I'd I'd run before now at this point, right? And then eventually got our strategy group.
speaker-1 (07:44)
And also helped kick off I didn't help I got kicked off our fintech investments as well. We were one of the first credit units to start doing fintech investments and then was a founding member of Circle, which I'm super proud of. but just started doing of all sorts of crazy stuff.
speaker-0 (07:55)
And so circle is an investor in us, VyStar is a direct investor in us. so kind of a double dip, I guess. so you correct me on the timeline. I think you got the lending job as well in twenty two, twenty three.
speaker-1 (08:07)
about three years ago, almost three years ago now. Next maybe this month. Yeah, almost exactly three years ago now.
speaker-0 (08:12)
and what was the biggest maybe challenge or a couple of priorities as you took that chair?
speaker-1 (08:18)
Well, coming in at yes, timing matters. And what I've realized in anything in life, but especially lending, the benefit of hindsight's amazing. Yeah. But you look back in twenty one through twenty two, we'd been making tons of loans. Everyone had been, right? At very low interest rates. And what we've now realized was kind of a fake economy. people's credit scores were not real. They were not a good indicator of their ability to repay because they had all the CARES Act money.
speaker-1 (08:44)
costs were low on everything and they were flush with cash. So they're they're up on their bills. And so right at the end of twenty three is when we started to see the spike of delinquency and charge. Again, industry wide. I happened to take over the seat at that time frame. And that was a big challenge coming in and all of a sudden have it makes you learn real quick, right? How all that stuff works. that was that was a big priority at that still is.
speaker-0 (09:06)
But how do you make decisions with that type of uncertainty? You mentioned allowed at and performance, right? You make a loan today, you don't know exactly what's gonna happen. Yeah. how do you make decisions with that under that type of uncertainty?
speaker-1 (09:18)
Well, you have to make smarter decisions, right? and rely even more on the data that you have, but not not necessarily just traditional credit credit data. And so that's where I think zest for us is super important, and making sure that we're even relying on that even more, right? Because it's it's one of the many factors we use in our decisioning. And I think there's an opportunity to rely on it, and there was and is an opportunity to rely on it even more, because every time we look at a quarterly business review with y'all, it's clear that the zest model is the smarter model.
speaker-1 (09:46)
not just over humans, but also over the other models that exist out there. But it's just so fascinating, Curtis, you mentioned the the time it takes to know that was a huge eye opener for me coming out of more operational roles where you can make a change that's effective overnight across the board. And in lending, the changes you make now, you're not gonna know if they were good or bad for years from now. Right. And so you really have to make those really, really smart data informed decisions up front to help protect that, but you're never going to fully protect against it.
speaker-1 (10:15)
we're in the business of risk management, right?
speaker-0 (10:17)
Yep. And so do you have any specific examples of folks that maybe I think you're speaking to legacy tools that looked a certain way that when you layer on AI that might look a different way? Do you have any examples of members that you've seen where maybe they have lower scores? Do you think they're better than that when you when you take all this other data into account, or vice versa? They look pretty good on paper, but we can maybe tell you they're not as much. Do you have any examples of that?
speaker-1 (10:42)
I don't have like specific hard examples, but more generalities. But I think that's what surprised me the most was the second part of your ask is that there are a lot of people with seven hundred plus credit scores that we shouldn't have been making loans to. Right. And the problem is it doesn't take very many of those to make a much bigger impact than making the wrong choice on smaller loans for those that may have worse credit reports, right? So that was I think the biggest surprise going into to using this model.
speaker-1 (11:10)
of course we're also making loans to some folks, not all, but some that we otherwise wouldn't have at lower ends of the credit spectrum as well. But that I think was an eye-opener for us is hey, just because someone has a good high credit score, they think they walk on water. They may have other stuff going on in their lives that makes them a risk that we shouldn't be giving them a eighty thousand dollar boat loan.
speaker-0 (11:28)
and I we completely agree. I wonder what surprised you specifically as it relates to Zest and and the AI solutions that we've deployed at VyStar. So as you in twenty we were in production for years prior to you taking the chair. So I'm wondering as you kind of dug in, were there any surprises at it through that process?
speaker-1 (11:48)
Well, I think when you first come in and day one, delinquency and charge off start spiking, you you have to uncover every rock. Right. And try to figure out where the where the culprit is, right? At least on a go forward basis. You can't fix what you've already done, but at least on a go forward basis. And one of the things we looked at was that's everything, right? It wasn't that we were singling out to say, but is the model working? And once again, was proven that it's actually the most effective of our data points that we use and it's still outperforming.
speaker-1 (12:15)
humans and that there's an opportunity to make smarter decisions by using it more. And I think that was a surprise. I expected it to say, whoo, maybe that wasn't the best model to be using during the that timeframe, right? And it actually we found the opposite.
speaker-0 (12:27)
And so when you talk about making the right decisions, are you talking about the approval decision or were you focused on making that a little bit faster? Or were you focused on pulling through more loans or what was the maybe all the above? Yeah. Controlling risk throughout that entire process. As you think back to those years, what was the focus, if any, of those?
speaker-1 (12:45)
it's all of the above, right? you have to make smarter loans. You have to make them faster and you have to have better end results, right? And so that's where I think it's hard to say how many vendors can help you across so many vectors. And I think that's the difference for me with zest is that it allows us to do improve every single thing, right? We're making smarter loans up front.
speaker-1 (13:08)
We're making them faster, which is a better member experience, that also then lowers cost and ultimately brings profitability. And so I'm a huge Michael Scott fan, Curtis. I don't know if you've seen the episode where he talked about the the win win win. I know it sounds corny, but I love that episode and it really is across the board a win and or win win win, I should say. And that's just remarkable to have that big of an impact from one vendor.
speaker-0 (13:32)
How do you measure? You mentioned member experience. It's something that we talk about a lot. It's hard to quantify sometimes. How do you think about quantifying it or measuring the member experience impact of a better, faster, yes?
speaker-1 (13:45)
We
speaker-1 (13:45)
we look we look at pull through rates, right? If someone gets a conditional approval or they have to have a bunch of follow-ups and they walk out the door, you're already gonna lower your approval rate drastically. The faster you can get to yes, the bigger the pull through rate. And so that's what that we look at. I don't I don't have that stat top of mind that I can just share right now, but that's what we measure is to always be improving that.
speaker-1 (14:05)
And so then again, if you can make more if you can rely more on zest, you're gonna make more instant decisions, which is gonna provide that better experience and then help profitability. That's what I'm talking about, right? You can get that higher pull through rate and also beat the competition.
speaker-0 (14:17)
Yeah. then the flip side, the other side of that coin, you talked about is operational efficiency or operational costs going down. Yeah. Talk to me about the human impact of AI at VyStar and any sort of maybe change management that you all had to go through or maybe continue to go through as relates to relying a little bit more on models and AI to help guide decisioning.
speaker-1 (14:37)
at the beginning you have the typical we were pretty early, right? Everyone's on the AI bandwagon now. We collectively, as you guys, were very early in in adopting it for such an important use case. And so I think we have gotten through as a culture within our org through that and are pretty pretty more advanced compared to others. but it was initially, hey, is this gonna replace our jobs? Is this gonna is this gonna fully replace everything that that we do?
speaker-1 (15:04)
And once we were able to demonstrate that, hey, that's not the goal here, right? The goal is to do more with the same and over time less through attrition, but we're not wiping out departments. And that's what makes us a little different, I think, than especially the banks, is that we're gonna wait until we have it fully mapped out and baked and then over through attrition get those savings. But we've still been able to process, I think the the stat I heard right before this in preparing was 22% higher application volume with 15% less staff.
speaker-1 (15:32)
over the last few years, I mean that's huge, right? you're doing more with less, but you're still having those people do what they do best, which is is using their brain. And so now that we apply that to other areas, right? We started to apply AI in all sorts of areas, just like the whole industry is, we're getting a lot less pushback because we've demonstrated as an organization that that's how we're going to use it is in a methodical way that gets rid of the the minutiae and does what computers do best so people can do what they do best.
speaker-0 (16:00)
Yeah, it's something that we talk a lot about is the human is very much in the loop here. But there are tasks or activities that maybe they don't have to do so they can focus a little bit more of their time on the stuff that actually actually matters. How how big is your underwriting staff today? It sounds like it was bigger a couple of years ago, but
speaker-1 (16:17)
Well we have we have two teams, one on the direct and on the consumer Linux side, one on the direct and one on the indirect side. I wanna say they're roughly sixteen or so on the direct side and I wanna say twelve to fourteen on the indirect, but I know whoever on my team listens to this is gonna tell me I'm wrong, but it you know, directionally. Yeah.
speaker-0 (16:34)
That's perfect. something I want to touch on a little bit that's I think core to what we do at Zest is explaining these models.
speaker-1 (16:41)
Yeah.
speaker-0 (16:42)
And so there's a lot of promise of AI. It's been, again, we've been partners for almost a decade at this point talking about the promise of it, but we believe firmly you don't get the outcomes if you can't explain it to somebody. talk me through how you think about the explainability challenge, the importance that you put on it, and any sort of
speaker-0 (16:58)
maybe example with regulators or even internally about explaining these things to the people that ask.
speaker-1 (17:03)
Explainability is the key factor. And at least for my part, when we first met with you guys, and I was on that very first call, I don't know if you remember that, where we where we chatted with you all, even though I wasn't over lending at the time, that was the sales pitch for us, was being able to explain it. Because no one else at that time was doing what you were doing around AI to begin with, but that focus proactively on explaining the outcomes so that we can defend that to the regulators. Now we're making
speaker-1 (17:31)
Not just the same, but more fair lending decisions, removing bias, because people are inherently biased, right? We everyone is, whether they admit it or not, there's bias. So you can make more fair lending decisions and prove it. And how you're doing it, that was huge. And the fact that Zest not only built that that way, but partnered with regulators along the way and has always been so proactive with helping them get buy-in as a credit unit that then has N2A come in when they
speaker-1 (17:58)
see zest, they're already aware of all the work being done there. Now, that said, we still had to independently verify the model with a third party, especially given our size. we paid a bunch of money and they proved what we already knew, right? That it's fair and explainable. but just another validation of that focus was good.
speaker-0 (18:16)
Was there any surprises going through the first couple maybe exams with the NCUA as it relates to poking around zest? Or maybe or maybe not. Maybe it was yeah.
speaker-1 (18:27)
Yeah, not being in the chair, I don't know the details, but I do know being on the peripheral, I never heard about it, which exam,
speaker-0 (18:32)
Yeah, sometimes no news is good news, right?
speaker-1 (18:34)
no news is good news. So that means it wasn't you know, they may have asked and and I'm sure they did. they like to ask about everything, but the fact that there that wasn't a huge concern from the peripheral really stood out for sure. Yeah.
speaker-0 (18:46)
And I know we went through the independent model validation. A lot of our larger customers, certainly 10 billion and above, go through very similar exercises. Talk me through the findings of that. It sounds like maybe similar. Was there any hey, yellow flag here type stuff on that? Or how did that all
speaker-1 (19:02)
There were there were a couple of comments of things I think to just look at, but I don't know if they use the same terminology as NCOA, but the supplemental fact level, very small things. And I think it was more just about double checking or validating certain things ourselves over time versus any concerns they had. Awesome.
speaker-0 (19:18)
back to the member experience. I know something that's near and dear to VyStar's heart and I I know you as well as community impact. with via Habijax, and I think there's a lot of what the Leukemia Society and everything else that you all are involved in. talk me through what that means to you personally and how that kind of thread is through at least the leadership team at VyStar, because we know that's the case over here.
speaker-1 (19:39)
Yeah, it's one of the main reasons I love working here. And I think when I go out and I talk to the team, I often ask them, what's one thing that we could do better? And what's one thing that you love the most about working at VyStar? And I would say about eight-ish times out of ten, the answer I get back on the thing they love most is our authentic focus on the community. And you mentioned a couple that we support. it's literally hundreds, Curtis. Like it's it we can't even track. Well that we do track. I can't track up here.
speaker-1 (20:07)
all the organizations that we support because in almost every case when there's an opportunity, we just say yes. And we don't just show up with dollars. We show up with people. We have weaponized our our workforce for good and we have a platform where we have opportunities. People can go and self-select and go volunteer places. Because a lot of times it's people may want to volunteer, but they don't even know how. And so this allows us to have rewarding, enriching volunteer opportunities.
speaker-1 (20:34)
That help them because the giver is the receiver, right? The one volunteering is the one that really receives the gift. But to go do meaningful work for nonprofits. And we I think the number was over 40,000 hours last year that we donated through that. as a senior leader, we are expected to be on at least one, if not more, nonprofit boards and to spend that time giving back. We give eight hours of paid time to every employee to go volunteer during the workday and
speaker-1 (20:59)
Bring a hundred dollar check with them. Now, we don't bring the check because there's fraud. So we give the money separately, right? But the concept is we we give a hundred dollars to the phenop. So teams get together, you take a team of twelve people. It's now a team building thing. They give back together, they give a check now of twelve hundred dollars, a more meaningful gift. It's awesome. And so I think for me, you know, we talked earlier about high-found credit unions, we're talking about community. there's this a gentleman, Dr. James Likens, that
speaker-1 (21:23)
I had the pleasure of getting to learn from as part of going to Western Community Management School in Southern California, Claremont. Yeah.
speaker-0 (21:29)
Amen.
speaker-1 (21:29)
yeah. Pomona College. it was two weeks a year for three years in a row. And he would talk about the head and heart. And we need to make smart decisions, like a non profit or not a for profit, like a bank. That's all they are. They're all head. Their whole purpose is to maximize shareholder value and make money.
speaker-1 (21:47)
Don't fault them for that. That's their mission. That's their purpose. I wouldn't get excited working in that environment for the rest of my career, but that's fine. On the other side, you have heart. And a lot of nonprofits are this way. I worked for two universities, right? they know how to spend money, they know how to do heart-based things for the right reasons, but they don't always make the best business decisions. Right? In a credit union, you have to be smart and balance the two. And so you can make really, really smart business decisions.
speaker-1 (22:12)
But for the right reasons that maximize your ability to give back. And it's that balance of head and heart that I love so so much. And I think every credit union is on the spectrum of doing that. some balance too far towards the head and are driving 12, 13% net worth, in my opinion. Again, someone can hate on here if they want, if they're watching this.
speaker-0 (22:29)
Little tight.
speaker-1 (22:30)
And others use the the give back as a way to be lazy and to not drive the maximum return that they could get in certain areas.
speaker-1 (22:38)
But they call it giving back. But if if they're not being efficient with how they're giving it back, then they actually might be hurting how much they could really be doing in their community.
speaker-0 (22:47)
Talk me through I love that head and heart analogy. Yeah. Talk me through how much of that tone is set from Brian.
speaker-1 (22:54)
a hundred percent. well, he is the one that laid that framework down from the very beginning. And and he's so authentic about it. that there's so much that he does that people don't even know about. on the on the heart side, right? Yeah. and people kind of learn about it in different ways, but he's not promoting it. He's just doing it for the right reasons, right? And sometimes those organizations will brag about him, that's how we find out he's doing it. But it might be years later, like, wait, I didn't know he helped create
speaker-1 (23:20)
an endowment to help teachers and underprivileged schools get training for like what like wow but then on the head side a he's a former banker from key bank HSBC huge executive roles there and he knows how to drive us forward and grow and maximize what our organization can do for our membership and our communities. And then it's the understanding and thought process around we are our community, right? our members
speaker-1 (23:47)
Our employees live, work, play, thrive.
speaker-0 (23:51)
Right here.
speaker-1 (23:52)
And so if we are good community partners, we're helping them all directly and indirectly. but oftentimes directly. We we have members in our core counties, about forty percent of households have a vi star membership. So anything we do at a minimum is going direct to those forty percent. But even those that's not going directly to indirectly, you're gonna thrive more because more people wanna move here. They want to be part of what's of what's being done.
speaker-1 (24:13)
And when I say here, all of our communities. We've grown way outside of just Jacksonville. and that benefits us at the end of the day. And I I think that that tone and that focus, the vision I should say from Brian is is remarkable.
speaker-0 (24:25)
Yeah, I love that. I didn't I obviously didn't know nearly the extent of his personal philanthropy, so that's awesome. looking ahead, what's the biggest challenge that you're trying to solve as we kind of exit twenty six, into twenty seven? Our customers are talking about fraud prevention or deposits or all sorts of different things related to lending. How what's top of mind for you?
speaker-1 (24:48)
so many things. deposits are the lifeblood, right, that we all need. And we were so flush with them for so long that I think a lot of people are struggling with how to compete now that we're in a more competitive environment for those deposits. and that has to drive our our lending. And so fortunately we've built out the ability to sell and buy on the participation side. So that allows us to not slow down our origination engine.
speaker-1 (25:12)
and then if we need to for liquidity, we can sell excess capacity, but that lets us keep helping members. That's that's key. But even so, deposits back to the head, right? If we can get lower cost deposits, that's gonna allow us to thrive more as an organization. So that's top of mind. Specific to lending fraud has really emerged as a big risk for us.
speaker-1 (25:29)
Umce again, Zest was way ahead of us and already had some amazing solutions for that that we've implemented. It hasn't been long enough for me to say exactly the impact, but anecdotally.
speaker-1 (25:39)
it's been huge according, I don't know what huge means, but huge accord according to the teams. And so that's been really, really important. but I I I may be a bit contrarian, but we just saw it. And so I g I don't get to say I told you so because it's already happened and we're just now doing this, but about three, four months ago, everyone thought rates were had peaked and only reductions were forecasted, right, across the board. And I don't I don't know that's true, right? I I don't know that we've hit the top.
speaker-1 (26:05)
I hope we have, but then look, we just had a raise, right? And so and now you see six fifty, now in Florida six fifty for diesel's high. I know in California that might be low. I'm kidding.
speaker-0 (26:14)
I think it's twenty five dollars for a deal in California.
speaker-1 (26:16)
That affects everything. Everything. Right. And not just our individual purchase and consumption, but every good that we're buying. And so that's gonna push inflation up. I don't know that we've seen the top. And so how do we get ready for that continued shift potentially going forward? that's a huge concern for me.
speaker-0 (26:35)
And how are you thinking about that?
speaker-1 (26:37)
Well, you don't want to do a lot of 30 year fixed loans on the books. That's so
speaker-0 (26:39)
Yeah, clearly. Yeah. Right.
speaker-1 (26:41)
we're selling all of our fixed or as much of it as we can that comes in the door. Now we're not getting a lot of fixed volume because it's the rates are also higher. but just the ability to pivot and sell behind the scenes is really what's helping protect us from that. Some hedge stuff, some deposit funding, match funding, that kind of stuff as well. but I think everyone's more focused on that potential now than back in twenty two when that first occurred.
speaker-0 (27:01)
Makes sense. Makes sense. just a few kind of quick hit questions and then we'll we'll wrap it up. what metrics do you obsess over at VyStar?
speaker-1 (27:10)
Well we all obsess over the same one. So right? Net worth, net income, delinquency charge off, et cetera, member growth. the one that I personally care the most about is what I call our voice of member results and how we're serving our membership, because that's gonna drive everything. Right. if if we're gonna deepen our relationships with our members, get word of mouth referrals and grow, we've got to provide a great, unbelievable we call it, experience to every single member coming in the door. And so
speaker-1 (27:37)
I started that for that department several years ago and we're continuing to expand what we measure on how we measure it. And I think that's really important, but equally important is how we serve the frontline internally. Because if we don't support our frontline in giving a great experience, they're not going to be able to, despite every training and tool they have, the back office has to support them as well. So we also now have an internal service survey. And that's really important to me as well, which which allows the the members of the employees working with members directly.
speaker-1 (28:04)
to rate their service they're getting from internal teams. And that has been already a huge differentiator, not just in the service we're providing, but also the culture of the company and that we're recognizing how important that is and the frontline is feeling that support. And it it's helped in so many ways.
speaker-0 (28:19)
I love that. how about the flip side of that? What do you think people overrate in terms of metrics? what is the one metric that you're like, hey, that actually doesn't matter that much?
speaker-1 (28:27)
I mean the the one that comes to mind is assets. it feels like you're in a measuring contest wherever you go. Like how expensive is your car? how many assets do you have? And so you've right, you'll be at a conference, you've seen these conversations. how many assets do you guys have? and that's gonna now form someone's opinion of you or your organization and the challenges you have. I guarantee you it's much harder to have four hundred million in assets right now than forty billion in assets.
speaker-1 (28:49)
Much for sure. And then the metric assets in general is so all over the board, right? We have over a million members at 14-ish billion in assets. Well, there's some credit unions over 10 billion with a hundred thousand plus members just because of the demographics they serve. So that doesn't tell hardly any of the story, yet people use that to form opinions of each other, especially when they're first meeting. And it drives me crazy.
speaker-0 (29:14)
I will never ask the question again. How what how big are you guys? or or maybe they can answer with some other metric than assets. la last question. what do you enjoy doing outside of work?
speaker-1 (29:22)
I'm a dad family guy and so I'm a self described cheer dad. They call me Disney Dad. I always help coordinate the the cheer events to Disney for my daughter's cheer team. She's a senior. so my time's there or at the barn where my other daughter rides horses. and then apart from that, I like to travel. So we spend a lot of our time planning trips.
speaker-0 (29:40)
I love that. How are you thinking about or how are you feeling about senior year?
speaker-1 (29:44)
I trying to think about it, man. I just tried to think about it. So I'm not quite ready, not quite ready for that. I also make sourd I just started making sourdough, Kurt. my gosh. Sourdough is an obsession.
speaker-0 (29:56)
I thought that was a COVID thing, I thought, Joel.
speaker-1 (29:58)
Well, I'm a late adopter. It was. Now my TikTok feed is all sourdough and I'm like nerding out on the designs I cut on them and like
speaker-1 (30:06)
When to take them out of the oven. I got I have a starter. I might buy the starter from the Oregon Trail. Do you know you can do that? You can buy a starter.
speaker-0 (30:12)
No, I have no idea. Yeah.
speaker-1 (30:14)
This is these are the things I learned, Curtis.
speaker-0 (30:17)
If you have any bread, I know we're gonna see each other next bring a little sourdough. Little taste test. Joel, thank you again for spending a half hour with us. I know schedules are really tight. I just really appreciate you taking some time to share your story. And again, well, I'll see you. I'll see you next week. Thank you.
speaker-1 (30:30)
Sounds good. Always good catching up, Curtis. Thank you
speaker-0 (30:32)
All right, Joel. Appreciate it, man.