Financial First Responder Loans with Seth Brickman

george grombacher  0:02

Well, let’s do this George G and the time is right. welcome today’s guest strong and powerful. Seth Brickman. Seth, are you ready to do this?

Seth Brickman  0:08

I am ready. I’m excited, George, it’s so good to be here. Thank you for having me on your show.

george grombacher  0:13

Super excited to have you on. Let’s go. Seth is the CEO of Q cash financial, that organization helping credit unions say yes, to more members through life event, specialty and financial first responder loans. Seth, tell us a little about your personal lives more about your work and why you do what you do?

Seth Brickman  0:33

Absolutely. So, you know, from a personal perspective, you know, I am one of those who believe that I’m here for something that is other than myself. Now, of course, took me a while to get to that place. But But I do believe that, you know, what I can do with the skill sets I have been given should be certainly to help people. And that’s what excited me about the opportunity to take over Q cash to cover Q cash in March of 2021. Q cash is an amazing company. We’re ACU cell, which means credit unions service organization, and we partner with credit unions to help them help their members go from clicking a link saying I need financial help ie alone, actual money in their account in under 60 seconds without the use of credit score and credit report. So we have a patented relational underwriting algorithm that allows credit unions to say yes to the members, they’re currently declining to be able to do immigrant lending, and to be able to give their membership and amazing experience by going from I need help do I’ve got money in under 60 seconds. And so that is the kind of legacy where we can pull people out of predatory lending, put them into the safety of their financial institution. That’s that’s the legacy I want to be known for.

george grombacher  1:48

Well, that certainly doesn’t make sense. So in under 60 seconds, no credit score, no credit report? Is it just randomly it says yes or no. So

Seth Brickman  1:59

it’s pure magic, George. Now, you know, one of the unique things that that Q cash has been around for quite a while we’ve done almost 900,000 loans with our partners, we are helping over 22,000 families a month, stay out of predatory lending. And the way we do it is what we call relational underwriting, relational underwriting. If you think about the banking and credit union industry, 25 years ago, when you applied for a loan, it wasn’t your status or things like that. The people at the branch Do you write there was no digital banking, you didn’t have apps. So you walked in, they would look at you and go, Hey, George, and you’d say, hey, I need a loan and they would go, Well, we know you, we know you’re responsible. We know this is your community, you’re probably going to pay the loan back and they would give you a loan based on their relationship with you. What I do now is I look at that relationship from a digital perspective. So I look at how long have you been a member of the credit union? I look at things like you know, do you have any warning codes, delinquencies, charge offs, bankruptcies, I look at your deposit history. And I look at other things like what other products at the credit union are using. And when you bring all that together in a data science type environment. It’s amazing what we can we actually know you better digitally than the credit union ever did when you walked in that branch 25 years ago.

george grombacher  3:28

That makes a ton of sense. So predatory lending. It tell me a little bit more about what what what you mean by that? Sure, absolutely.

Seth Brickman  3:37

So predatory lending are things like payday lenders were in the great state of Texas, they can charge you interest rates over 660%. On top of these predatory lending are things like rent to own predatory lending our title, pawnshops, anything that takes advantage of a person to get them to pay exorbitantly above market rates. And so what we believe is nobody should have to go through that. And that’s why we call our loans life event. We understand and the financial health network tells us that 40% of Americans would be would struggle to handle an unexpected $400 expense. And then payment.com tells us 61% of Americans are living paycheck to paycheck, irregardless of your socioeconomic status. And so you combine those two things together, and it’s not a matter of if you’re going to get that $400 unexpected expense, but when and when it happens, where are you going to turn? Well, if your financial institution ie your credit union doesn’t offer this kind of solution for you. Your only other option is predatory lending. We’re not dealing with the life of that so your car breaks down and you need to get to work the next day. What are you supposed to do? Your refrigerator breaks down and you need to be Your Kids, what are you supposed to? Do? You get an electric bill that’s bigger than you expected, and you don’t have the funds. What are you supposed to do? Right? So we want those people to come back into the safety of their credit union and not get into the destructive cycle of predatory lending.

george grombacher  5:13

Oh, that makes a ton of sense. So how does cash actually work? I understand they probably fill out something online and get the decision within 60 seconds.

Seth Brickman  5:24

Yeah, so the unique thing about cube cache is we deeply integrate with the credit union, what’s called their core or their brains. And so what happens is, you’ll log into the credit unions digital banking, whether it’s on a website or mobile app. And then what you’ll do is you’ll click a link just like any other link for a loan, the biggest difference with the Q cash link, is we’re going to take you into a path where we already because we’re connected to the credit union, everything I need to underwrite your loan, I can get directly from that credit union core are those brains, so there is no application to fill out. We authenticate you for fraud prevention, and then you acknowledge the loan term. So one of the things again, being part of the credit union industry, it’s super important that there’s complete transparency and no surprises in these loans. And so you’re acknowledging these loan terms, everything is done digitally, think, II consents. And then at the end of the transaction, you’re given a Truth in Lending Act disclosure, which is required by the government so that you know exactly what you’re signing up for. And when you click Accept, I then immediately transfer money from the credit union, to the person. And where that’s super helpful for members is credit union members are getting the help they need, whether it’s broken down on the side of the road, in the middle of a rainstorm, or in the tow trucks waiting there to tow them. Under 60 seconds, you have those funds. But the other thing is for the credit union themselves, my loans require no interaction with loan personnel. So mine are completely hands off, which allows their staff to work on higher value items for the credit union. So it’s a win win for the member and the credit team.

george grombacher  7:03

Yeah, it sounds like it. What are the loan amounts if the if you could share that?

Seth Brickman  7:10

Absolutely. So if you’re a federal credit union, there’s actually government regulations called pap PAL to guidelines say that federal credit unions if you’re above an 18% interest rate, then the most you can loan out as $2,000. And person can only have one loan at at a time. Some states do have independent regulations, but the majority of the states will typically go up to about $4,000 in loans. And, you know, remember, we offer three different loan products to our credit union members, we talked about the life event loan, right, that’s typically around a $2,000 loan. And interest rates can vary, I have them as low as four and a half percent, because the credit union sets them not me. And as high as 28%, which is the Powell to guideline. But what we found is credit unions are really good at calendar based loans, so summer vacation loan or Holiday Loan. But if you don’t have a qualifying credit score, then you probably don’t need to apply because there’s really nothing for you. So we built out a specialty loan program to allow credit unions to give loans like summer vacation loan, fall back to school, winter holiday, lower spring taxing loan, and actually help these members. Just because you don’t have a qualifying credit score doesn’t mean you don’t have the same needs as everybody else. Right. And so that one is really important to us. And now we’re able to help members seasonally. But the one that I think is having the biggest impact is what we call our financial first responder love. And that is a loan that we build out for the credit union at the implementation process, but it’s not live. And then as soon as there’s a disaster or an event that happens in their community, within 15 minutes, they can have a loan live, ready to help their members. A great example is hurricane in Florida. We had credit unions that were able to go live with a hurricane relief loan in minutes. What used to take weeks. So while the hurricane is still battering the state, they’ve got loans to help their members get out of town, pay for repairs, buy food, buy gas, do what they need to do. And the credit union controls the underwriting credit union controls, the payback periods credit union controls the loan amounts, so they’re in complete control. But imagine whether it’s a government shutdown and major employer layout, like we’re seeing right now. Or a tornado or a hurricane, those types of things, but the credit union actually able within minutes to have something like to help their members super excited for us for

george grombacher  9:39

sure. Yeah, there’s no doubt. So when when the money goes into the the members account for the loan, who’s whose money is it? Is that coming from the credit union? Is that coming from you?

Seth Brickman  9:52

No, it actually comes from the credit union, right. So all we are we’re a technology platform that facilitates the loan, the credit union Oh, Once the loan services, the load because it’s their member, and that member finds community at that credit union. And so we want the credit union to be the one to process and service that loan, because they’re the ones that have the relationship with a member. And that’s what relationships are all about. For sure.

george grombacher  10:17

So it seems like a bit of a no brainer. But how is it how it went when you’re talking to a prospective credit union to implement cue cash? Is it like, Yeah, let’s let’s let’s totally move forward. What are the objections that you get?

Seth Brickman  10:33

So I mean, we do have a lot of credit unions, we’re in almost 100 credit unions now that just got it and got it really quickly. And they’re like, Yes, this is something we need for our members. The objections, though, are pretty simple. The first objection we typically get are, what do you mean, you don’t use credit score, like every loan, we gave us his credit score, our policies require us to use credit score, it was almost as if I’m an alien, asking them to give a loan that doesn’t use credit score. And so having to walk them through the data that we have that shows it’s a very safe and responsible way to give their members loans, but try and financial inclusion make a difference in the community. Right, the Credit Union Mission is people helping people, right, sometimes that isn’t a profitable endeavor. But in this case, it actually can be. And we want those credit unions to embrace that mission. Some of the other things we hear, for example, is well, we already have a product, and then they’ll go on to brag about the product on how, you know, they’ll do this special loan twice a year, and members are lined up out the door waiting hours in line to get this loan, look at how successful it is. And myself coming from big tech, where I lead product at Amazon and Microsoft. I look at that and go That’s a horrible user experience. Why would you want your members to wait in line for hours, like I don’t call that successful, I call that you need help. And oh, by the way, we can digitize it. And they can do it from their, their sofa, they can do it from their car, they can do it from wherever they’re at. In fact, I got a call from one of our CEOs, Amanda Bansky, from people’s advantage credit union. And she called me excited because for the first time in the credit unions history, they gave loans on Thanksgiving, get credit unions closed on Thanksgiving Day, you normally would never get alone. They brought on cue cash to help their members. And on Thanksgiving Day, for the first time ever. They gave loans. Like that’s the that’s the exciting part for me. So, you know, we do hear objections. And, you know, we also hear things like, well, you know, are we live in a higher class area, our members don’t need these kinds of loans. data and statistics will tell you something very different, right? It really doesn’t matter if you’re making 30,000 or 300,000. Most people live paycheck to paycheck.

george grombacher  12:58

Yep, that is the truth. And it doesn’t surprise me that people do say that, I think that that is really, really is an easy thing to sort of misunderstand is that it’s not about your socio economic level. People that make hundreds of 1000s dollars a year are flat, broke and, and credit card debt and don’t have a lot of cash. So so how do y’all make money.

Seth Brickman  13:21

So we charge a funded loan fee. So every time a credit union physically funds the loan, we get a flat fee. So it doesn’t matter if it’s a $500 loan or a $4,000 loan, they can make more money on the $4,000 loans, they still make money on the $500 loans. And we only do it for funded loans. So if a member gets declined, then the credit union doesn’t pay us that fee. If the member gets approved but abandons the process before funding, we don’t get paid. We call it success based metrics, meaning we only get paid and we only do well when the credit union does well. And that’s really important to us. And what we did is we did some research with our credit unions that had manual programs. And when they looked at every hand that had to touch the loan, and actually looked at their internal costs, it was between 120 and $170, for them to process loans internally. When I digitize it, I can do that for them for 1/10 of that cost.

george grombacher  14:20

Incredible. Yeah. I love it. At the top, you mentioned that you have a certain skill set that you’ve been given. What is that?

Seth Brickman  14:31

So, you know, for me, that’s a funny question. It’s I am able to look at what I would call a business problem. And with a deep technology background, right, understand how we can use technology to solve the root of the problem, not the symptom. So when I build technology products, it’s not designed to be a bandaid because you cut your finger, it’s designed to fix the hand and the knife that cut your finger, right. And so you know that that’s where I think my special skill set is. And then if you ask my team, they would tell you, it’s a blessing and a curse. But I’m able to look at a spreadsheet with a million cells that have data in it in under 30 seconds, find the error. And so they absolutely hate that. But they’re appreciative that their spreadsheets don’t have errors. And so, from that perspective, you know, for me, it’s really about how can we take real business problems, and not just create something that fixes it, but create something that solves it? No,

george grombacher  15:44

I love it. Well said, Thank you so much for coming on. Where can people learn more about Q cash, and for credit unions who are listening? What is the onboarding process like?

Seth Brickman  15:54

So to reach out to Q cash, just go to Q cash financial.com, you will see a contact us page and you can fill out our form and one of my amazing sales team will be reaching back out to you. But for credit unions, it’s about a 16 week implementation process. And that’s actually a really light lift. But we do 16 weeks so that they don’t feel overwhelmed by the process. It’s just a couple hours each week. And then we’ve already done the heavy it work. We’re already integrated with your core, we’ve already integrated with your digital banking provider. So it’s really about helping us understand how your setup, mapping the variables to your specific instance. And then making sure that you participate in testing that you agree at work. So it’s a very light lift for our credit unions. And that’s why our credit unions are finding so much success, but at the end of the day, Q cash financial.com and we will be able to help.

george grombacher  16:46

Excellent. Well, if you enjoyed as much as I did show, set your appreciation and share today’s show with a friend who also appreciates good ideas go to letter Q, c a s h financial so Q cash financial.com. And check out everything we’ve been talking about fill out the form for somebody to get in touch with you and if you are a credit union, it sounds like Seth has and Q cash is a very well thought out and easy to follow process for getting it implemented so you can better serve your members. Thanks. Good. Thanks, George. I appreciate it. And until next time, remember, do your part by doing your best

Transcribed by https://otter.ai