[00:00:00] Vince Passione: Welcome back to 22 Minutes and Lending. I’m your host, Vince Passione, and today I am joined by someone I’ve had the pleasure of working with for over a decade. Mick Olson, president and CEO of TopLine Financial Credit Union. Mick has been with TopLine for over 20 years, serving as SVP of Finance, CFO, and now President and CEO where he oversees a credit union more than 70,000 members with a background that blends finance, technology, and strategy. He’s led TopLine through growth and change while keeping an eye on what’s next for his members and for the system. Mick, welcome to the show.

[00:00:29] Mick Olson: Thank you. Good to be here.

[00:00:31] Vince Passione: Thanks for inviting me.

[00:00:32] Vince Passione: Awesome. So, Mick, credit union’s about 93 years old, from what I can tell. Or is it 90 years? 90 years. Yep. 90. Yeah. So, so tell us the background. Tell us how the credit union started. Tell us a little bit about, you know, where you’re at these days as far as membership. And I know you just rebranded your, your, uh, not rebranded.

[00:00:49] Vince Passione: You came out with this new mission statement, right. Connect. We connected, we all do better, I think is what it, what it says. I was looking at your annual report. So tell us a little about the credit union.

[00:00:59] Mick Olson: So we were founded in 1935 by seven employees of AT&T. Uh, they gathered their funds and they also had $35 that they started with, um, from them.

[00:01:10] Mick Olson: You know, we grew along with AT&T and with the breakup, uh, you know, with the eighties, um, you know, we really looked to go to more of a community based credit union. So, you know, we had been a state charter. Um. We moved from a state charter to a federal charter in the nineties. Uh, since then we’ve gone back to a state charter and there’s a lot of reasons why credit unions do that.

[00:01:34] Mick Olson: Ours in Minnesota is just trying to get the territory that we wanted to fit into. Our charter was, um. More advantageous to go with the state charter than a federal charter. So we made that decision. We’ve had a couple of mergers on the way. We did a lot of mergers before I came here in the, in the nineties, um, with some smaller credit unions.

[00:01:56] Mick Olson: Then in, uh, 2011 we merged with a, uh, about a $45 million credit union in the south metro of our. Our of the Minneapolis St. Paul metro area, and that really helped diversify, you know, into a, um, you know, a really different member base. And that’s, uh, that’s really helped. Um, and then in 2024, um, we did a merger with another $330 million credit union.

[00:02:23] Mick Olson: Uh, NOCA Hennepin. And so we expanded our, our branch footprint and expanded our, our member base. So that’s really how we got to the 70,000 members now. And now we seed our assets about 1.1 billion. So we’ve seen a lot of growth, certainly the last 20 years that I’ve been here. We’ve been growing tremendously.

[00:02:44] Mick Olson: So it’s been good. We have very loyal member base and um, you know, we feel like we, we serve them well and it’s given us some great success.

[00:02:54] Vince Passione: So, Mick, congratulations on the growth. What, what does membership look like for you? What’s the average age and, and when you’re acquiring these members? Uh, uh, as a, as a, a state chartered credit union, right?

[00:03:05] Vince Passione: I mean, membership for them is they live, work, or worship in the state. So you’re, so you’re wide open that way? Or do you use open fields, but let’s start with demographic. What do they look like from an age perspective?

[00:03:15] Mick Olson: We’re, uh, we’ve gotten younger. Um, when I started, we, you know, we had, we were creeping up towards the average age of about 50, um, low fifties, which was on an average is quite, um, is quite high.

[00:03:28] Mick Olson: We’ve moved more towards the, the lower forties, um, 42, 43. Um. And so we’ve, we’ve been able to do that. Some of that was with the mergers. Some of that has been, you know, our initiatives to really grow our, our younger member base. And I know you hear that from credit unions around the country. Everybody wants to get, you know, attract the younger borrowers with the challenges of the fintechs.

[00:03:52] Mick Olson: But we’ve been fairly successful in doing that with our outreach and our marketing. Certainly student lending is a part of that. Um, you know, trying to focus our credit cards on, you know, doing more approvals for, uh, you know, thin files, et cetera, has, has really helped, uh, grow our membership.

[00:04:10] Vince Passione: Now you have 11 branches, and we hear this all the time.

[00:04:12] Vince Passione: Right. You know, do you need a branch? Do you not to do younger members go into the branch? Certainly during COVID, right? E even, even baby boomers, right? Needed to suddenly become digital. Right? And there’s a, there’s an old saying, right? There’s no digital deniers anymore since COVID, right? Everybody learned to get digital.

[00:04:31] Vince Passione: But when you look at branch usage, what does that look like for you? And, and is it a billboard for you? Is it an education center for you?

[00:04:38] Mick Olson: You know, it depends on which branch you’re referring to or looking at. We have a couple of branches that do a lot of shared branching, so they’re not necessarily our members, but they’re, they’re quite busy.

[00:04:49] Mick Olson: Um, and they serve really a large demographic around, um, that area. In our, our metro, we have some of the acquisitions we’ve done, the mergers. We have a lot of very low balance, high, high activity members that. Um, some come from different immigrant populations where they, they focus a lot on cash and they do a lot on a, on a family structure.

[00:05:14] Mick Olson: Um, commingling funds and things. And so they do a lot of transactions. Some of our other branches, um, I. Really, especially one de Novo branch that we just, we just opened, the traffic hasn’t really been, been there, but, um, they’re certainly getting a lot of phone calls and a lot of digital applications that are, they’re processing and coming through.

[00:05:35] Mick Olson: But we just did a, a merger and just a conversion last month and the lines that the, the branches, um. We’re really out the door. And it wasn’t necessarily that people had issues, they were just looking for someone to talk to to maybe help, um, you know, online banking questions. And it’s remarkable how many actually drove into the branch to have those conversations.

[00:05:59] Mick Olson: We did have quite an extensive increase in phone volume in our call center, but we also had a lot of members who really value having that physical presence and came in just to have a conversation. So that reinforced. For us and where we’re at in Minnesota. Um. You know, the need and the, the desire for members to have that consultative relationship with their, their credit union.

[00:06:24] Mick Olson: So we still think, even though we may not have the, the branch transaction volume that we had say in the nineties, but, um, it’s still very valuable to our members. And they may not come in very often, but when they do, they really want that branch presence. So, um, and if, if they are billboards too, don’t get me wrong, we mm-hmm.

[00:06:43] Mick Olson: We’re making sure we’re. Great locations and that members are seeing us and that they can really, um, you know, appreciate that we’re there and have our brand awareness and everything. So, but. In fact it, the, the actual usage of the branch has continued at a higher rate than what I thought it would be.

[00:07:02] Vince Passione: Okay. Let, let’s talk a little about, ’cause it’s about lending. So let’s talk about your, your, your loan book. So I was taking a look earlier at the 5,300 report. It looks like about, about $250 million in auto loans. Uh, a little over $400 million in residential and about a hundred million dollars in commercial.

[00:07:18] Vince Passione: And I think there’s close to 20 in credit cards. Mm-hmm. Um, I think Got it right. Are there areas that you’re looking to grow in? Where, how do you see this for your membership and how do you see it for top line?

[00:07:33] Mick Olson: Well, we’ve really tried to diversify and I think we’ve got a pretty well structured balance sheet right now.

[00:07:38] Mick Olson: Um, you know, we were at 108% loan to share before this latest merger, so we’re really looking very closely at our concentration risk policy and making sure that we were kinda growing all portfolios at the same. Now we have increased, um, we have increased our, um. You know, unsecured, like our, our student loan portfolio for a long time it was one or 2 million.

[00:08:03] Mick Olson: We’ve really increased that up to upwards of 9 million now in our partnership with member Student Lending and Lendkey, um, which has been very valuable to us. Been a very well performing portfolio. Love the structure that, that whole, um, the way that. We have the participations and the instruct, the structure of the entire portfolio and the offering.

[00:08:26] Mick Olson: Um, so we think that overall we’re well balanced. Mm-hmm. Um, we are trying to get a little bit more on the, the younger side, the loans they need, um, focused a little bit more on direct auto lending, focused a little bit more on, um, credit cards, but we’re certainly. We have another QSO relationship with, um, or a couple that we do commercial loans with.

[00:08:50] Mick Olson: We’re certainly focused on expanding that capability and serving our members in that way. Um, unsecured loans, um, you know, if you can do it in the right way, it’s a great add to the portfolio. So, looking at our concentration risk, um, we’re, we’re well structured right now. We’re trying to, to grow everything pretty much in proportion, but there are little, um.

[00:09:13] Mick Olson: You know, subsets like, you know, unsecured that we’re, we’re trying to increase to really enhance our overall yield.

[00:09:19] Vince Passione: So let’s, let’s go to, um, educational lending. So you’ve increased the education lending side about $9 million balances on it. You’ve been involved for 10 years. You’ve been on the, you were the chair of the board of, of member student lending.

[00:09:31] Vince Passione: You’re a member of the board of directors. You know, you, we look in the credit union reports and there’s about 700 credit unions, I think in the country. Right. Education, finance, loans.

[00:09:41] Mick Olson: Mm-hmm. And

[00:09:42] Vince Passione: you’ve heard me many times have this conversation about why can’t we get more credit unions to do this?

[00:09:47] Vince Passione: Everybody wants to get young. Um, certainly I have a lot to say, but I, I wanna, I want our listeners to hear your decision to do it, your experience to date, and then why should they do this? Right? Because there’s so much going on right now, especially now with the big. A beautiful bill and the impact it’s gonna have on members.

[00:10:06] Vince Passione: Right. But, uh, let’s start off with why’d you do it and what’s your experience been as far as profitable? It’s, it’s a lead in product, the upsell cross sell.

[00:10:16] Mick Olson: We, uh, we were hesitant at first. It wasn’t until we found, um, you know, the model that member student lending and LendKey had where we were sharing 10% of the, the risk that really, um, got us to move.

[00:10:29] Mick Olson: Because at that time when we first started, I was the when CFO and our. Our, um, CEO at the time was very reluctant to do a lot of unsecured, um, credit. So once we identified, you know, the benefits of the program, the structure of it, um, that really, um, you know, got some traction, we were able to, to, to show the projections at first.

[00:10:53] Mick Olson: And those have really proven out. I mean, it’s, we haven’t seen, you know, we haven’t seen any of the, um, you know, the losses that. You hear about. Um, and I think that’s part of when you ask the question why people don’t do it, they’re all looking at the needs based, um, lending from, from the government, government perspective.

[00:11:13] Mick Olson: They’re not really understanding how the, the student loans are underwritten, how the, the risk is shared within, uh, the model that we’re offering. And so I think it’s a lot of education. Um, it’s a lot of, you know, credit unions need to move a little bit faster as a, as an industry, we’re slow to adopt on in a lot of ways, and I think we all recognize that.

[00:11:36] Mick Olson: Um, we just need to really, uh. Look at the, the way it’s structured and see why it’s different and understand and get educated. Um, and then look at the results and be able to, to see, okay, what’s it been over the last 10, 15 years and how is it, you know, this structure is really proven. So I think, you know, why people aren’t adopting more.

[00:11:59] Mick Olson: You know, I really do think it’s education and it’s just a, you know, a risk tolerance that as an industry we just. Really don’t have certain pockets do obviously, but um. As a whole, I think it’s, you know, it’s those two things. It’s education and it’s risk tolerance and really getting people to understand the, the opportunity.

[00:12:20] Vince Passione: Yeah. And look, um, thank you. Right, because we started to collaborate over 10 years ago when we started building what we now call network lending, which is the ability for someone like top line to originate a loan to a member and then in real time participate out 90% of it. And that risk mitigation strategy and the work that member student lending has done has really helped us grow.

[00:12:40] Vince Passione: That business. Mick, when you think about the future and you think about what’s happening with this big, beautiful bill, um, you know, there’s lots of issues here, right? You’ve got. These grad plus loans, which today any, any student can go and get full cost of attendance. So if you wanna be a lawyer, a doctor, a veterinarian, a nurse, you can borrow full cost of attendance for the United States government.

[00:13:06] Vince Passione: And then when you graduate, you basically apply for income-based repayment for five years while you’re doing your residency. Or if you’re an associate in a law firm. And then eventually you become a partner and all is good. Mm-hmm. Uh, but that’s gonna go away. Um, and on the parent plus side, and these parents, their demographics are exactly aligned with credit union demographics.

[00:13:26] Vince Passione: It’s anywhere between 45 to over 53 years old. Income looks like it’s about a hundred thousand dollars a year. They’re barring for their, their children. Those used to be full cost of attendance. Those, now those are gonna be capped and there’s gonna be an income based, uh, restriction as well. So, you know, the analysis that we’ve done and we’ve shared with members, student lending is the need.

[00:13:49] Vince Passione: For education loans, private education loans will probably double as we go into 2026. You know, what, what do you think as far as changes to the program or what you, your con your concerns for your members, uh, how would you change the program or what would you advise other credit unions to be doing right now?

[00:14:10] Mick Olson: I think we have to understand the need and how a credit union has to understand and define how they want to help their members, and if they want to help these younger members and they can do it in an affordable, structured way. You know, certainly the guardrails are there with the, the underwriting.

[00:14:25] Mick Olson: They’re not need-based loans, they’re underwritten loans. Um, so I think we have to decide how much do we want. Um, you know, what’s the need gonna be from our members and how can we help them, and how can we increase our commitment to, to helping them with these student loans? Recognizing, you know, a lot of these, a lot of the programs that are more heavily impacted by the bill are gonna be the most educated, you know, the, the most solid earning jobs, um, in the country.

[00:14:54] Mick Olson: And so you’re not. We don’t discriminate obviously, but when we look at the opportunity and where the demand is gonna come from, it’s coming from, you know, your best potential earners in your, your member base. And that should really drive a lot of the decisioning and why people would wanna increase, um, and move in there, but it move, increase their exposure to the portfolio.

[00:15:20] Mick Olson: Um, but a lot of it is education and understanding and setting that, you know. Setting that goal of how can we help our, our younger members that really, really need the help and how can we be there for them? That’s why we exist.

[00:15:34] Vince Passione: No, well put. So as you look ahead, how, how do you differentiate yourself? We’ve had, we’ve had other credit unions on, and certainly we’ve had other fintechs on and, and, and consultants and people talk about well find a niche.

[00:15:48] Vince Passione: Um, is it a niche strategy? Mick, for top line, how do you differentiate top line going forward?

[00:15:54] Mick Olson: And that’s always the, the challenge. People always say, you know, what’s your, every consultant we work with, no matter what it is, seems to ask, you know, what’s your target market? Well, we do have a target market, but we’re also recognizing that we need all walks of life in order to, to really, to fund the loans.

[00:16:11] Mick Olson: We need savers, we need borrowers. Um, everybody in town, you know, and in the country is talking about service and how our. You know, coming into our branch is different than the others. And there are differences, certainly within credit unions, within banks, um, but I think the, the entire industry is really focused on, you know, service and making sure that we’re providing the best service that we can for our members and for the community.

[00:16:42] Mick Olson: And so we wet that quite a bit. We think that’s a differentiator for us. But, you know, the other side of it is what. What products we’re offering. Um, not everyone has a mortgage area. Not everyone has insurance or investment advisory. Not everyone offers student loans. Um, and those are the types of things that although a lot of credit unions do.

[00:17:06] Mick Olson: Pieces of what we’re doing. We think we’ve got a really well balanced, uh, product offering that combined with the culture that we built and with the, the brand identity that we’ve really focused on. You know, I think all of those combined, um, really help identify us and, um, make us more unique. Um, but still in the end, we’re all offering some of the, the same services.

[00:17:30] Mick Olson: It’s the combination of those items that I mentioned that really we feel differentiates us.

[00:17:35] Vince Passione: No. And look, any, it’s funny, any neobank you talk to will say the same thing, right? You have to have a full suite of services. You don’t want that client walking away and finding a, a product that they can’t have at your financial institution.

[00:17:47] Vince Passione: So that’s solid. So Mick, let’s talk about the future of the industry. So you’ve been in the industry a long time, uh, lots of concerns about tax exemption. So do you think that goes away? Do you think it stays? Does it matter? Are people making a bigger deal of this than it needs to be?

[00:18:02] Mick Olson: I don’t think it goes away.

[00:18:04] Mick Olson: I think, um, I don’t think it’s a, the threat surely has lessened, um, from my perspective over the last, you know, six months. Um, but I think it’s always gonna be there. Um, I think it’s something that we need to, to figure out if, if it ever does happen, how are we gonna react? How are we gonna respond? Um. So I wouldn’t say it’s a, a tier one threat, but I would, I would say it’s always something that we certainly need to pay attention to.

[00:18:32] Mick Olson: Mm-hmm. We certainly need to justify why we’re, we are tax exempt and what services we provide. Um, and if we’re doing things the right way, I think, I think it’ll stay there.

[00:18:43] Vince Passione: Okay. What happens with the NCA or the CPB? I mean, do you wind up having your Prudential regulated be the FDIC? Do you care?

[00:18:50] Mick Olson: Um, you know, I, I do like the fact that we have our own regulator.

[00:18:54] Mick Olson: I think we’re unique in that way. I think if we all get thrown into the same pool, um, we’re gonna have, because we are structured differently. I don’t think the regulations need to be identical to a, a bank or a, a credit union. I think we’re, there’s enough differences there that having a, a separate regulator, now we’re state chartered, so we’re really focused on the.

[00:19:15] Mick Olson: Minnesota Department of Commerce, but understanding that ev, even though we’re state chartered, we’re still regulated by the NCUA. So, um. I don’t think we should have the same regulator. I think, like I said, um, we’re unique enough. Um, as far as the CFPB, um, you know, I’m, I’m glad that some of the, the regulations, um, have, have backed off, especially some of the things that we’re proposing that, that we do, you know, there are certainly consumer protections that need to be there.

[00:19:48] Mick Olson: Um, I just don’t think, um, the CFPB remains the way it is long term, but. We’ll have to see.

[00:19:55] Vince Passione: Yeah, that’s right. So, final question. So the next five years, if you had one problem to solve for your membership, what would it be?

[00:20:03] Mick Olson: Well, we’ve been focused really on the financially coping. And so, uh, we’re gonna keep focused on that.

[00:20:09] Mick Olson: We’re gonna keep focused on financial education, uh, trying to get our, our members. We think we’ve got a good, um, product mix as I’ve mentioned, but really that. That counseling the in-person. Um, and that’s why we’re continuing to expand our branches because we see a lot of value in that. And so I think the solving some of the, the budgeting and planning issues for our members and who are financially coping, solving that I think is the, is the first thing that we can do.

[00:20:39] Mick Olson: And then we can move on, uh, and do, um, you know, expand their. You know, their ability to make the achievements in their life and um, you know, lead the lifestyle that they want. But I think that’s, it’s a serious problem that impacts members of all economic standing, not just those that are are struggling.

[00:21:00] Mick Olson: We’ve got members who are making a lot of money that are still financially coping ’cause they, they just need more education.

[00:21:07] Vince Passione: No, it’s 80, 80% right. Folks in the United States live paycheck to paycheck, so, absolutely right. Mick, congrats on the success. Thanks so much for spending time with us today. Uh, that wraps up our episode 22 minutes and Lending.

[00:21:19] Vince Passione: Again, Mick, thanks so much for joining us and to our listeners, thanks for tuning in and be sure to subscribe, share our, join us for our next episode. Mick, thank you.

[00:21:27] Mick Olson: Yeah, thank you. I appreciate it. Thanks for having me.