Kendall Garrison: [00:00:00] we have a belief that how you make money is just as important as making money. And, so again, there are products and services that we, that we sunset, that we discontinued, that just didn’t align with the values that we hold about how we make money and how we serve our members.

​[00:01:00] [00:02:00] 

Josh DeTar: Welcome to another episode of the Digital Banking Podcast. My guest today is Kendall Garrison, the CEO of Amplify Credit Union. And y’all, I got myself a real life cowboy in the podcast today, and I don’t just mean that because he is a lifelong Texan. Now, the awesome accent doesn’t hurt, but I see a real life cowboy because Kendall is coming out guns blazing, pointed straight at doing things the way we’ve always done them. A topic of much conversation on this podcast. I really do love to get unique perspectives from folks actually putting this into practice and moving with purpose towards action. Now, when Kendall was being interviewed by the board of the Credit Union for the CEO role, he told them straight up much like he likes his whiskey, that if you want a defender of the status quo, someone who sets it on autopilot and runs the standard playbook of every other CFI.

We can just end [00:03:00] this interview now and y’all can go look for someone else. You see, Kendall is unabashedly, ruthlessly and radically passionate about and focused on the core credit union mission of improving the financial lives of members. That’s job number one, but how do you build a culture and a set of products and services that both accomplishes that mission and makes for a stable and viable credit union business model? Kendall, it starts with listening. It leans on data and it focuses on playing games. You can win as someone who’s not always been a good listener. Kendall, learn the value of listening to understand as opposed to listening to respond. When you do this, you uncover the unique perspectives and insights that inform better decisions about how you can actually help people.

Looking back on the day when Kendall took the call from a recruiter asking if he wanted to come work for a credit union and having the immediate response of hell no to now, he’s darn glad he took [00:04:00] the opportunity and hasn’t looked back. So while you won’t find Kendall on the golf course, going back to the whole, only play games, you can win thing, you will find him and his team meticulously making moves that help his credit union focus on the four main areas they can win at and help members win at Kendall.

I’m not gonna lie, man, writing that up was absolutely a blast because I’m stoked to have you as a guest. I’m really excited that like the opportunity of this podcast,brings people into,a conversation with me that I, otherwise probably never would’ve had an opportunity to do. And I think two minutes into the first time talking to you, I was like, I’m gonna be best friends with this guy.

So welcome to the show.

Kendall: Well, thanks. I’m really glad to be here and I’m really glad,for the opportunity to have the conversation.

Josh: Yeah. I mean, I think we’re gonna go a lot of different places today because,I, don’t even think I could do justice. Your passion for the credit union industry. when we talk about like [00:05:00] truly helping people’s financial lives and futures and then putting it into brass tacks, sometimes those are two different things, right?

And I think there’s a lot of talk and a lot less action and a lot more fallback on the status quo. And it’s pretty cool to talk to you ’cause you’re like, oh yeah, that thing. Yeah, no, we just killed it. You’re like, wait, what? You’re like, oh yeah, No, we just killed it. So talk to us a little bit about, just that mindset for you and the credit union.

Like how do you guys get into that head space of, nothing’s really off limits, always use the guiding light of is this actually the right thing for the member? And then how does that kind of permeate through the organization?

Kendall: Yeah, so I, I think in our organization we have,a, set of guiding principles, that in many ways reflect, my personal philosophies, about life and business. and also incorporates,a number of the personal philosophies of our senior team. And so you mentioned in the intro, we don’t play [00:06:00] games, we can’t win that, is in fact one of my personal philosophies.

And, we carried that over to the credit union and we said, what are the businesses that we can’t be competitive in? What are the businesses that we can be competitive in? what are the things that we know how to do and what are the things that we’re really not very good at?

Organizationally. and, then you view that through the lens of,as you said, job one, our mission, improving the lives of, our members, the financial lives of our members. And, also another one of the, cooperative principles that credit unions were founded on, are care and concern for your community.

And so we at Amplify have an obligation to make, our community a better place it was than we founded. And so if you take all of those things and mash ’em together, then than you come out with a, different, set of businesses that you choose to be in 

Josh: Mm. [00:07:00] 

Kendall: and, not like other credit unions where, we think.

We have to be all things to all people. we pick our spots and, I think that has been, really important over the 15 years that I’ve been at Amplify, is to continuously refine our business processes, to improve the financial lives of our, members, and serve the businesses that we’re in today.

Josh: I like that you use the word obligated. I think there’s a lot of, meaning behind words, obviously. And so, choosing one word over another word, while it may seem a small nuance, I, think there’s actually a lot of, interesting insights that can be unpacked from why you choose to use a specific word.

It’s not like it’s your job or even it’s just the right thing to do For you guys, you see it as an obligation. Like, this is a, this is an immovable object for us.

Kendall: Yeah, we do. And, it is, and, that is manifested in a whole host of [00:08:00] different ways throughout our organization. Some people, are moved to volunteer their time. Some people are moved to,to, donate to nonprofits, to, help improve our community. And, those that aren’t moved in that way, they actually support the mission by doing their job really well and helping, amplify, generate the revenue that lets us give back to our communities in those ways.

And, so we, do see it as, as an obligation, not, a, it’s stronger than a responsibility. And, so that’s why I use that word. and, it’s not a, in your life and in your business, you have things that are a, have to. And you have things that are a get to, and so it is as a part of our mission, we get to give back to our community.

We don’t have to.

Josh: Yeah, but even then, like the way you were talking about it makes me feel like, when you [00:09:00] use the word obligation, it’s like you get to have to, like, if you’re gonna be a part of this, you’re gonna be a part of this. And everybody’s contribution is gonna look different like you were saying. Right? I mean, my thing may be, I really like to go on Sundays and pick up trash downtown Austin, right?

Your thing may be, Hey, I like to make a donation to the soup kitchen every month. And somebody else’s thing may be, Hey, I’m a total data junkie. I really don’t like interacting with people. I would like to sit in the basement and I would like to crunch numbers to figure out how amplify can be the single most operationally efficient credit union in the known universe, so we can use every penny that we have to support our community.

Alright? Each of those contributions is unique and different, but they’re adding value in their own way.

Kendall: And, so that’s when you bring, a, diverse skillset and, a diverse level of interest and a diverse lived [00:10:00] experience, that gives an organization an opportunity to perform better and to make better decisions. Every bit of data tells you that the more, worldviews that you can bring into a, an environment, the, more, differently abled skill sets that you can bring into an organization, you’re gonna perform better.

And that doesn’t, matter whether it is, in our business or as it pertains to our,to our,obligation to make our community a better place. different people bring different strengths and, they contribute in different ways. And it has been a. It has been my good fortune, I’ll have to say, to have been able to assemble a group of people that, feel the same things that I feel, that see the world in, in some of the same ways that I see the world.

Not that we have groupthink, but that we are aligned in our mission and our values and our service [00:11:00] standards to each other. and, service standards to each other are something that are actually really very important to us as well.

Josh: isn’t that fascinating? I think one of the things I’ve noticed as I’ve gotten older and I just start to have a little bit more world experience myself, right? Is you see some of the things that when you, like when you and I have this conversation on the podcast, it’s like, I would love to think that everybody listening to us is like, well, yeah, no, duh.

Like that makes all the sense in the world. But what’s crazy to me is how many of us would probably agree with the statement that you just made, but then we don’t actually go about living it. Right, and, use any example, I’ll use the super polarizing one, but just even a personal one, right?

I mean, you look at how divided a lot of politics in the US is right now, and I would argue one of the most dangerous things that you can do is just fill your social media timeline with all of your friends that think exactly the same way as you do, right? And you’re just missing out on the opportunity of hearing unique ideas and perspectives that may actually change your mind because you were closed off to something.

But at the [00:12:00] same time, I think that there’s a really important distinction that you drew out, which is when we think about creating these super high functioning teams, right? You wanna avoid group think, you wanna avoid having everybody think the exact same way, but you can’t have one person, let’s pick you.

We can’t have you as the CEO of the credit union saying. Hey, that product might make us a couple of bucks, but is a bad product for members. Give it the boot. It’s going outta here. And then having one of your senior leaders on your staff going, absolutely not. I don’t care how much that ruins someone’s financial position.

That’s how we make money, Kendall, that thing’s staying around. Right. That’s a misalignment of the mission, not a different perspective on how to accomplish the mission.

Kendall: So, I think it, it’s interesting because we have a, belief that how you make money is just as important as making [00:13:00] money. And, so again, there are products and services that we, that we sunset, that we discontinued, that just didn’t align with the values that we hold about how we make money and how we serve our members.

Josh: Hmm. Like what I.

Kendall: so I often use the, example of indirect auto lending. we exited indirect auto lending, in January, of 2020. And, I thought that day that we, that we closed that business was gonna be the hardest day of 2020. turns out there were a few other harder days that were ahead,happening in late February and early March, and continuing on for a while.

Josh: as the story would have it.

Kendall: but, you know, that is, that is a, product that is financially unhealthy for our members. they have 160% LTV. Loan, for seven years on a depreciating asset. And so they’re upside down in that car for the majority of the time they own [00:14:00] it. and, that’s financially a bad decision.

And so we don’t wanna facilitate those decisions. We don’t pass judgment over, your need or your desire to do that. but if it’s in our DNA, to improve your financial lives, that’s not the way to do it. And, so we exited that business. I think, quite honestly, the biggest, thing that we did in the, from the perspective of it’s not, it’s not just the making of the money, it’s how you make money.

it, was our decision on February the second of 20 22, 2 2 22. The numbers just work, right? And,we made the decision on that day to, completely eliminate. Banking fees. So, in, February now, three years ago, we turned off all fees on all deposit accounts, but we continue to provide all of the services that we provided before.

They’re just free. [00:15:00] So if you need to do a wire transfer, great. There’s no charge for that. If you have a commercial deposit account with us, and you need positive pay to prevent fraud on, paper checks that you write, great. We provide it for you. No charge for that remote deposit capture’s free. you accidentally overdraft your checking account.

Guess what? We pay the overdraft and we don’t charge you for it. And, so that was a, mindset shift. It really took us somewhere north of two years to accomplish. We originally started talking about,fee free banking in 2019 and, core banking systems are built to charge fees, not to eliminate fees.

And, so, it was,well over a year to do the research and then another year to actually implement the project to [00:16:00] eliminate fees. So it was, it was an interesting journey.

Josh: I want to come back to that ’cause I just, my head can’t get wrapped around this. ’cause as a consumer. I love paying fees, so it’s just, it seems super weird, 

Kendall: And, but, and, it’s interesting that there are people in, our trade association that will say, members want to pay fees. Because they want the services. And I would suggest to you they want the services. They don’t wanna pay the fees. And, we have proven that you can run a credit union and not charge people for overdraft, but still let them overdraft as they need.

and you can do that responsibly and you can do that and still maintain a profitable business. So we chose not to make money off the back of our member in that way. that is fee for failure. That is not fee for service.

Josh: Yeah. So I want to, I, really wanna come back to this whole fee structure stuff that you’re doing because, I mean, for [00:17:00] starters, I, really appreciate actually that I, feel like I can have this very candid conversation with you about revenue at a credit union, for whatever reason. Sometimes we get a little, like, dodgy about the subject, but I, I argue at the end of the day, like, y’all gotta make money.

If you can’t make money, you can’t do the great things that you’re looking to do, you’ll go outta business, right? So there’s a balance. We don’t want to be, greedy and charging fees for the sake of fees, but if your credit union ceases to exist, all the good that your credit union is doing will cease to exist as well.

Kendall: Yeah, so we have a, phrase that sums that up and that phrase is, bad things happen to good companies who don’t have revenue. And, and, so, but again, having appropriate. Positive revenue. Having net income is, important to us. I mean, that’s the way we in financial services keep score.

as a credit union, the only way to, grow your balance sheet and to serve more people and generate [00:18:00] more income and give back more back to the community, is to have an appropriate, net income because that’s the only way we can generate capital. We can’t, we, we can’t issue stock, we can’t, many credit unions can’t issue subordinated debt and use it as regulatory capital.

So, the, it is like the old financial services commercial. We, make money the old fashioned way. We earn it, but we earn it in a responsible way.

Josh: So what, so I wanna go back to, you were talking about the indirect auto lending. So I’m really curious how you guys kind of arrived at that decision. as you were talking about it, I was thinking about, I remember seeing forever ago,a meme that was floating around the internet, making fun of a poor kid.

But unfortunately, I think it was. It was a good example of this happens more than, got publicized in just this event, some 23-year-old kid who financed a brand new BMWM three and [00:19:00] young finance bro, started making a couple of bucks like could, land the loan, but, rolled in the negative equity from his previous car into this on top of a hundred percent loan to value for the M three.

I wanna say the loan was at like 26.9% over seven years. And it was something like the total interest he was gonna pay on the car was like three times the purchase price of the car by the time it was all said and done. And the purchase price of the car is six figures. Right. So, I mean, we’re talking about putting this kid in a massive load of debt and Sure.

Like he’s feeling pretty good at the moment, like driving around downtown in his M three feeling all hot, right. But, to your point, like, was that actually doing a service to that person or in, the short term, would we have really, crushed this poor kid’s dreams, telling him, bro, you shouldn’t known this M three, but set him up for longer term success.

But conversely, so I, use that as like one example, [00:20:00] but conversely, I mean, I, have to imagine there’s a lot of positive scenarios that happen in indirect lending too. So how did you kind of weigh out the, maybe doing a little bit of indirect versus just doing it completely for everyone versus shutting it down completely?

Like, how did you guys go through that thought process?

Kendall: So we, went through the, thought process, about what, did it really mean to our organization?

Josh: Mm-hmm.

Kendall: and it was a placeholder asset on our balance sheet. And, a placeholder asset that, that had a lot of charge offs in it, quite frankly. because again, if you’re making a, if you roll in your negative trade equity, and on top of your, your a hundred percent LTV, when something goes wrong, it goes really wrong.

And you’re, manufacturing charge offs that are in the five figures. In, many, cases, if you look at the, cost of a car today. And, so it made sense for [00:21:00] us to trade that product for another product and, it’s a product that we leaned into, and that is our mortgage banking business.

So, so here’s an interesting fact that many people don’t know. the median net worth of a homeowner is 40 times greater than that. Of a non homeowner. And so if we can help people be homeownership ready, with, fee free,banking products and services, if we can help people into their first home, if we can help them move up and move up again and move up again, that gives them the opportunity to build generational wealth.

And, so would we rather focus on helping people build that generational wealth or would we rather put them in an M three at 160% LTV? again, if you view through the lens of what’s best for the financial health of our [00:22:00] member, there’s no question about which one’s better. And, so that was the way we assessed the decision.

To, get out of the, to get out of the indirect auto business. Yeah. We still make direct auto loans and you can’t live in Texas and not have a car and go to work. I mean, this is not a public transit, friendly sort of estate. And, and, so responsible auto lending is something we do every single day.

but, again, we didn’t want to be the, we didn’t want to be The junk food of financial services, gets you instant gratification, but doesn’t help you build the wealth you need over the long term.

Josh: I’m curious, and I’m, gonna ask this, is gonna sound like maybe a negative or accusatory statement, I promise it’s not, I’m just genuinely curious. So, so, if you think about that, let’s use that kid in the example, right? I would argue he’s somebody at pretty high on the list of needs some help.

Like he needs somebody to step in and say, [00:23:00] Hey bud, this is a bad idea. Like, let’s hold your hand. With you completely exiting the indirect do. Do you feel that misses out on an opportunity for you to have that conversation with that potential member and potentially change their course, do a course correction for them, or, I’m just curious if you guys thought about that, what that looks like,

Kendall: O okay. The short answer is no, but let me give you the longer answer. so people often look at the act of buying a car and financing a car. They look at that as one act. Okay? They do it at the dealership. They show up and say, I want that car. And they go see the f and i guy, and the f and i guy, puts ’em in a loan and away they go.

And so in most cases, these people weren’t a member before. 

Josh: Mm-hmm. 

Kendall: and you know, you only have two or 3% penetration rate. Of indirect members that convert to real members, and you don’t really get to have that conversation with ’em. It’s the dealer that has the conversation with them. The dealer’s not interested [00:24:00] in their,financial health overall.

They’re interested in selling their car and getting the flat back on the, from the, from the credit union or the bank or whomever they sell it to. they’re not in interested in improving anybody’s financial life other than their own. 

Josh: a hundred percent. 

Kendall: Yeah. And so we weren’t even in the conversation and never had the chance to change the conversation, until it was too late.

Josh: Yeah. I, think that goes back to what you were talking about earlier of you don’t have to always be all things to everyone and there’s enough of a swath of, financial institutions. That maybe that is somebody else’s focus, right? I don’t know. Maybe, you. And I’ll find a credit union out there that we can bring on the podcast that’s like all we do is indirect lending.

And our focus is on getting in, building that relationship, changing that course correction for them out of that. And that’s all they do. And that’s their specialty, right? And you can be like, Hey, great, that good for you? I ain’t touching that with a 10 foot pole. That’s not a [00:25:00] game I can win at because this is how we’ve aligned our credit union.

And so I think sometimes that’s hard for people to accept. Like we, we do, we, try to, well, I have to touch every single thing and try and improve every single thing. And ultimately we do a little bit across everything and not anything to move the needle in any of those. But you guys kind of took a different approach and said, Hey, we’re just gonna do these four things.

Four, not three. We’re gonna do these four things and we’re gonna do it really, well and we’re gonna move the needle in each of those significantly. Is that an accurate assessment?

Kendall: That, that is a very accurate assessment. And, and so the four businesses that Amplify is in, is mortgage banking, of course, because of the statistic I shared about, the net worth, the media net worth of homeowner. the second business that we’re in is commercial lending. And, so we don’t do, fancy downtown high rise office buildings?

We do, we do, multifamily, apartment complexes. We [00:26:00] do spec home lending, we do acquisition development and construction to, for, people to put in subdivisions. we, finance,retail shopping centers, commercial, and industrial properties. and, so these are business owners that are driving the economy.

80% of jobs in the US come from small businesses. And so if we can, if we can finance small businesses. That gives us the opportunity, again, to help improve our community by, by being a part of the job creator network, as opposed to, any of the other businesses that we would be in. And, so we’re, as it turns out, we’re pretty good at commercial lending.

it is a game we can win and, and we feel really, really, great about, that, segment of our business, both from, a profitability perspective and from a, care and concern for your community perspective. the fourth business that we’re in, obviously is fee free [00:27:00] banking. and that supports and underpins all of our lending activities.

And then the fourth business that we’re in, is it’s a little inside baseball, but it is, it is loan servicing. So we have a, loan production machine that, that generates far more loans than we can hold on our balance sheet. So we have to sell those. And so every month we’re an active seller, of mortgage, home equity, heloc, commercial loans.

All of those things go into the secondary market. Some of those go to the agencies like Fannie Mae and Federal Home Loan Bank. and, but many of those assets go to other credit unions that need very high quality, good earning assets on their balance sheet. So, most credit unions, many credit unions are down around 60% loan to deposit.

we’re north of 90% loan to deposit. 

Josh: Wow. 

Kendall: and so what we’re doing [00:28:00] is giving, other credit unions an alternative to much lower yielding treasury securities and, investments that they would have on their balance sheet. And so one of the. One of the cooperative principles is cooperation with other cooperatives.

So we’re sending about $9 million a month in interest income into the credit union system to people who own loans that we have originated and they’ve purchased. as a matter of fact, we service more loans, we have more off balance sheet loan servicing assets than we have assets on our balance sheet.

And when you’re capital constrained, you heard me say earlier, the only way to, to, grow your balance sheet is through your net income. and so growing off balance sheet assets is the way to not, diminish your capital. And the other thing that’s beautiful about that business model is we, get paid a very small fee [00:29:00] to service those loans for.

For other credit unions and banks. And yes, I said banks, we have, we’ve sold lots of loans to banks. we don’t think they’re the enemy. And, and so we generate revenue that is paid to us by other financial institutions to service loans on their behalf. what could be a better benefit for our member?

Josh: Kendall, how many members do you guys have?

Kendall: we have right around 50,000.

Josh: About 50,000. What are your, assets right now?

Kendall: so we have, just under 1.4 billion on the balance sheet. and I looked, this morning and we have one point, five five off balance sheet. So total just under 3 billion in total assets under management.

Josh: Crazy. And so obviously that comes from the higher mortgage and commercial lending space. I gotta ask though. and, I would, my wife’s gonna ask me immediately after I end this recording, if I ask this, do you guys do commercial lending for donut [00:30:00] shops?

Kendall: For the right donut shop.

Josh: I don’t know what it, so the, context behind this is we were looking at moving to the Fort Worth area and we were scouting around and my wife was like, what is with these Texans and donut shops? Like, there are more donut shops than gas stations. Like, these things are everywhere.

Kendall: we’ve never financed a donut shop, but maybe just the right opportunity it has, never come along. but we’ve done, we’ve done all sorts of things. We’ve done several breweries, and, that’s not, that is not normally in the credit union wheelhouse.

Right. But, as it turns out, we know a thing or two about financing breweries. And so there you go.

Josh: How’d you get into that?

Kendall: Somebody in our organization took a, little detour from banking for a couple of years and built a brewery and that somebody would be me. And, and, so learned a thing or two about the brewing business and, came back to banking and, then all of a [00:31:00] sudden crap brewery, lending opportunities present themselves to us.

And yeah, one thing leads to another and there you go.

Josh: That’s crazy. Our breweries like, so, I’m in Portland, like right at the start of wine country. And the same, I think there’s just thousands of wineries right outside my house. And people always ask, how do you become a, millionaire in the wine business? And the answer is, you start as a billionaire. so is that true for the breweries too?

Kendall: It is, yeah. And yeah, my joke is I made a small fortune in a brewery, ’cause I started with a large one. So it’s the same joke.

Josh: Yep.

Kendall: but, but yeah, I mean, it’s a, it’s an interesting business. And of course when I was in that business I was maybe a bit ahead of my time. this was in the mid nineties and, so it was really, well ahead of the craft beer wave that came, in the two thousands.

So

Josh: I mean, Austin’s a mecca for that now.

Kendall: it is.

Josh: Yeah. What, okay, so let’s talk a little bit about the, those, two lines of business. because I [00:32:00] think if, I just look at kind of industry data and the conversations I have both in my day job and doing this podcast, there is, don’t get me wrong, a lot of credit unions doing mortgages, doing commercial lending, but I don’t hear this is, one of our core top four areas of focus.

So what kind of spurned that for Amplify and, how has that been, I guess made kind of your standard business model and how have you guys. It turned this into such a successful practice that you’re able to sell off these loans and service ’em like that.

Kendall: So the, short answer is, to have a team that is highly experienced in those business businesses that understand commercial credit, that understand, the mortgage banking business and how, [00:33:00] fulfillment wins the game better than sales, on the mortgage origination side of the house. And, I think our success is really borne out by our, net charge offs.

So we’re essentially servicing $3 billion worth of loans. 1,000,000,003 for our own, for our own account. and our net charge offs last year were about $500,000, and the year before that, it was $70,000. so essentially, it rounds to zero. And so, that, that is the very definition of playing a game that you can win.

and, we’ve proven over the long run that we have the, we have the, ability to look into a credit profile and assess it very, very well. and, so I think that as we’ve, as those businesses have grown, we’ve become more successful at it. And, success breeds [00:34:00] success.

Josh: You know, I’ve used this example a couple of times on the podcast, Kendall, and maybe I’ll keep u using it until like somebody solves this, and I don’t have this as an example anymore, but what’s funny is it got validated the other day. I was flying home from a trip on the East coast and ended up talking to this woman in the seat next to me with about 20 minutes left in a five hour flight.

And we both laughed and said, we wish we’d started the conversation at the beginning of the flight, not the end of the flight. But, but the example I use is one of my really close friends and, neighbors who has a daughter and a son almost the exact same age as my kids. And they’ve basically grown up together, is a dentist, and he is a first generation Romanian immigrant, both he and his wife. they put him through dental school with epic levels of frugality. he, focused on keeping their debt to an absolute minimum. They focused on paying off what little student loan debt he did take on through dental [00:35:00] school. Long story short is he’s a dentist my age with zero debt other than his home. And Kendall, this guy is trying to buy a practice and cannot get financing to save his life. And what I find fascinating is if you actually look at the data, dentists actually have one of the lowest default rates. Of any segment of buyers in the us. So fast forward to just recently on this flight, I ended up talking to this woman.

Long story short, she was flying back from dc She was on like the Today Show or one of the morning shows, talking about how some simple changes in kids early on can prevent them from having braces. And we get to talking, she’s a dentist, her husband is a dentist. same kind of thing. First, first generation Indian immigrants. Both doc dentists both have got zero student loan debt. They both do now own their own practices. So they own two practices. But she was telling me about the [00:36:00] absolute nightmare of trying to get financed. And ultimately, like her clinic, she just worked out a personal arrangement with the seller of the clinic and did personal financing through him for the longest time until they could finally move it over to a financial institution. And I just, I use that as one of many examples to say, going back to I, I feel like I talked to a lot of credit unions and I don’t hear them say things like, small business, commercial lending is the backbone of this country and it’s an area we wanna focus on. ’cause it’ll empower our, communities by not only building up businesses, but building up, paychecks for the people that work at those businesses. And then I hear stories like this of people that are struggling to find financing. And like for me, maybe I’m missing something massive in this equation here, but I’m like, y’all are the answer to this thing.

Kendall: And, so it, it really, it is, and, dental and medical practices are the easiest things to finance in the [00:37:00] world because they have very, very, stable cash flows. And, so, most of these practices now, a startup practice is a little harder, right? Because it has no, it has no reliable revenue base.

But if someone’s buying a practice, this dentist has had, has had his same set of patients for, ages and, the revenue is very, stable, very reliable. And, so it’s, it’s financial institutions who. Aren’t really willing, to, take on that segment of a business. And, we’ve done a couple of those.

not many because that’s just not really our, area of expertise. We, do more in real estate. but, those are the sorts of businesses that we would finance all day long. purchases are really easy.

Josh: Well, and that kind of goes back to what you were talking about earlier, right? I think, maybe if you could expand on, you were talking about how you’ve seen so much success in those business lines [00:38:00] specifically, small business lending and mortgages is you, have experts on staff where that’s kind of, they understand it.

again, I’m probably overgeneralizing, so don’t, don’t beat me up in the parking lot at GAC next year. But, if you don’t understand something, you see it as a risk, right? So if I’m like, Hey, look, I, don’t understand dental practices. I ain’t landed on that thing ’cause I got no idea how to value this, then I could see how you would stay away from it.

But if you bring people on staff that are experts and are like, Hey, look like I facilitated a handful of these transactions maybe in a different industry or something like that. I know how to look at these balance sheets of these dental practices. Then all of a sudden that becomes a lot less scary probably, right?

Kendall: It it, does. And, so the, thing that’s interesting and, I, am, entering my 46th year in financial services. So I’ve done this a little while, and it might not surprise you to learn that the majority of the time I spent in financial services [00:39:00] has been in commercial lending and in mortgage banking.

Surprise. and, again, these are the things that we know how to do. And, we took, we took, a traditional community fi worldview and brought it to a credit union. I. That gives us the opportunity to do what we know how to do, but do it for the right reasons. And, so I think, that differentiation and mindset, realizing that we can’t be all things to all people.

and, so strategy, I don’t think people, appreciate this as much as they should. Strategy is also what you won’t do. And, so, that was, that has been a part of our, strategy for a decade and a half. These are the things we won’t do. these are the things that our background noise and detract away from, what our real mission is and what our real area of expertise is.

So, so why, be in a business [00:40:00] that simply dis distracts you from focusing on the things that are most meaningful to your organization?

Josh: you were talking about, building generational wealth earlier. And when you talk about that from a personal standpoint, right? One of the things that usually comes up as a part of that is to diversify your revenue streams, right? Make sure you’re not solely dependent on, one set of all your eggs in one basket.

If you apply that concept to you all, I’m curious how, so, a lot of times I talk to credit unions, community banks, right? And we’re talking about how to improve, both our net interest margin and. our, revenue that’s not tied and is not, is fee-based. Really, you guys killed off one of those streams, so you’re a lot more reliant on the other.

How, do you kind of [00:41:00] plan for the ebbs and flows in the economy, changes in the rate environment, instability in just whatever may be happening in the news? Like how does that impact your strategy?

Kendall: Well, so, it’s interesting because if, people want to try to predict, for example, the direction of interest rates, that is a fool’s errand. even really smart economics people only get it right about 20% of the time.

Josh: I.

Kendall: And, so if you’re, if, you’re in a business where,where you’re wrong 80% of the time, then you’re, you may as well be wrong a hundred percent of the time.

And, so whatever your strategy is, you pick your poison. And so let’s say that you are in the credit card business and you have a very large unsecured credit card portfolio, which by the way, we sold ours a few years ago and got outta the credit card business. and the economy goes in the [00:42:00] tank and unemployment surges, you see your charge offs and your credit card portfolio go through the roof.

And so, traditionally the first thing that people pay is their mortgage payment. That’s the first thing that they’re going to pay. And so that traditionally has very low delinquencies, very low charge offs. Now, I’m not gonna lie to you, the mortgage business has not been any fun in the last two years when, since we’ve seen rates run up so dramatically.

but I think people are now coming to the realization that they’re never gonna see two and a half percent mortgage rates ever again.

Josh: a hard pill to swallow, huh?

Kendall: yeah, let’s let’s put that, let’s put that notion aside because it’s not going to happen. but, no matter what business model that you have chosen, there is gonna be some, there’s gonna be some risk in that business.

again, if we see an e an economic slowdown, we’re gonna [00:43:00] see, delinquency rates on autos increase dramatically. the same thing goes with student lending. and, so no matter what you’re in, it has a parcel of risk. And so we’re not in the business of avoiding risk. We’re in the business of managing risk and understanding the risks that we take and have a balanced and well understood risk appetite for whatever business segment that we’re in.

Josh: Yeah, that makes a lot of sense. I mean, I think, we were kind of talking about this before we started recording, right? It’s, you can almost, pick up a newspaper each week and find the new thing. That’s the reason why everything’s going to hell in a hand basket, right? So there, there’s always gonna be those ebbs and flows, and that’s just kind of a part of life, right?

Kendall: So, there is, there has been a Black Swan event every 90 days for the last five years. And, you, can’t [00:44:00] predict the future. The only thing you can do is manage the now. And, so there, there are a lot, there’s a lot of background noise about,about, things that are popular in the financial press today, whether it’s tariffs or whether it’s taxes or tax cuts or whatever the case may be.

And, so the only thing that we can do is control the things that we can control. 

Josh: Yeah. 

Kendall: We can’t, manage the segments of the economy or the economic decisions that are out of our control. We can’t control what the Fed is gonna do with interest rates. We can’t control what, Congress is gonna do with taxes.

We can’t control what the president is gonna do on tariffs. The only thing that we can do is control our reaction to them. And, you can contingency plan and you should. [00:45:00] don’t predict the future. Control the now,

Josh: Yeah. I mean, I think, this goes to your ultimate driving mission, right? Just, help the member and if that’s kind of always the guiding light, how you get there may change, but as long as you’ve got thought processes around how to maintain a stable, viable credit union and balance sheet. Put the focus on.

Alright, we may go ups and downs. Our goal is to weather the storm so that we lessen the impact of the storm on members. ’cause let’s face it, at the end of the day, I might get a little edgy on this, but, the vast majority of us, we don’t really care about all the stuff that’s in the news, right? I care about the impact that it’s gonna have on me and what do I care about the most?

Well, I’m my husband and I’m a father of two little kids. I tell you what I care about the most. I care about keeping this roof over their heads. I care about keeping their bellies full of food, right? I care about keeping a smile on their face and making sure that [00:46:00] they don’t see a struggle, right? And so everything else is kind of just noise that I’m just trying to navigate.

And that’s kind of what you’re trying to do too, right? Like you’re just, you’re kind of navigating that storm. Of whatever it may be. Changes in, politics, changes in governance, changes in regulatory changes in innovation and the environment. you’re not in a business to go out and sell a billion widgets and IPO and make a ton of money when you sign up for a credit union, that’s not what you’re signing up for, right?

It’s a very different mission. So I think you have a different mindset about what, the changing landscape means for you.

Kendall: So, the, thing that tells us that we have been successful. Is that our members don’t have to think about us too much. They,in, in many ways we’re like your utility. And, you don’t think about it until [00:47:00] the power’s

Josh: Yeah.

Kendall: And you, don’t think about it until you can’t access online banking or you, don’t think about it, until something goes sideways, until something goes wrong.

Josh: a hundred percent.

Kendall: And, so, our, mark of success is that people aren’t thinking about us too much. They’re, thinking about us just the right amount. They’re, we want to be in the considered set when they’re gonna change financial institutions. We wanna be in the considered set, when they, open their first account.

we wanna be in the considered set when it is, time to get a mortgage or to, have a small business loan. and then once those things are in place, we want it to run on autopilot like clockwork. And, banking is a really ugly business with a nice coat of paint on it, because to do all the things you have to do in banking that [00:48:00] you have to deal with, more vendors than what’s would fit in my home here today, quite frankly.

and, it’s a hard business that runs on a lot of outsourced, activity. And, I don’t think, I don’t think many consumers realize that.

Josh: Yeah. Isn’t that is a, kind of an interesting element that for a, community financial institution. Like that reality, is for all intents and purposes, we’re very much so a commodity business, right? and I think sometimes even in, in my space in what we do for credit unions, right? Like sometimes we get on this high horse that like, we’re gonna be the best thing since sliced bread. And I’m like, yeah, you know what? Like, no offense, but a member’s only coming into the credit union or logging into digital banking ’cause they need to accomplish something or they need to learn something pretty much outside of that, they really couldn’t care less, right? Like, I’m not their best friend, I’m not their favorite [00:49:00] digital solution to hang out in.

I’m not the thing that they’re probably gonna be showing off to their friends. Look at this super rad thing, right?

Kendall: So, one of the things that, that we do in, realization that we are like so many, community fis are. are highly dependent on our, on our suite of vendors is every year, in January, we have a partner summit and we have both an in-person and an online, component. And we have all of our key vendors, and, partners, from, all segments of our business, attend either in person or virtually.

And we go through our business plan and strategic plan, but. Because, because our strategic plan is not rocket surgery, right? It is. it is. We’ll give it to anybody that wants it. you just have to have the [00:50:00] fortitude and the team to run the play. and, you also have to exit a lot of businesses.

So in, in any event, we’re not shy about sharing that information. And what we found, we’ve been doing that for about four years. and, we found that, our, partners operate as a more cohesive set because we’ve set an expectation for them and we share with them, our service standards, and service standards are, are, universal.

They, go throughout our organization and, so they’re the standards that we, I. Provide service to members. They’re the standards that we provide service to each other in the credit union, and they’re also the service standards that we hold our partners accountable to. And and, if everybody’s on the same page, it seems that it works a heck of a lot easier.

Josh: I tell you what, Kendall, man, I’m so glad you said that. I had no idea we were gonna go down, this path today, out of respect for the financial institution and the [00:51:00] consultant, without being given, expressed consent to be able to share this information or framed from using names. But, sometimes we, get into conversations with, credit unions, community banks, and it is, it’s like their, strategic plans are this walled garden.

It’s this big secret sauce that they don’t wanna let anybody into. And like you, I really strongly believe that this is a marriage. I mean, this is a long term commitment we’re making to each other, and we’re hyper dependent on each other’s success. So I don’t know if I don’t know what success looks like for you, how am I able to help you meet it?

And so this credit union in this consultant recently that we were working with Kendall, when we got into the initial stages of the evaluation, I about fell outta my chair with the amount of documentation they shared with us. They had gotten their entire senior leadership team, management level team all aligned on one core [00:52:00] set of strategic objectives, departmental strategic objectives, how they would define success, what it would look like, all of this stuff, their mission, vision, values, the operating plan they shared with the board, everything.

And they put it this beautiful Dropbox for us and just handed it to us. And I was like, this should be the blueprint. This is amazing. I actually understand what success looks like for you. I feel like I can actually come in and have a conversation with you now about what that’s gonna look like. And it was just, it was really, cool.

And, hopefully they listen to this and they know who they are. ’cause man, do you deserve some bonkers credit for this? It took a lot of work and I think it took a lot of guts for them to be willing to be that transparent with not just us, but all the vendors that they were evaluating and say, look, we’re, gonna give you, we’re gonna give you the playbook.

Just do you use it? And I thought [00:53:00] it was a really cool approach because it did it, it puts you at the same seat at the table.

Kendall: Yeah. Well, I mean, if you know where you’re going, you’ll know when you’re got there,

Josh: Yeah.

Kendall: and so,

Josh: Yeah. Hey, I want to come back to though, this, this whole fee free thing, right? I, made the smart ass joke, like, that’s weird, you guys eliminated. I’m like, I thought people love those things, but you know, people don’t, you’re right. Like we don’t want to pay a fee. I mean, I would argue that maybe if somebody offered me something exceptional that I had to pay for to get maybe something above and beyond something else than maybe I would pay for.

But yeah, by and large it’s really annoying to have to pay a stupid fee for something where I’m like, I just want you to absorb this as a part of your business cost. And maybe the fee gets passed onto me somewhere else. Like, you’re making your money somewhere else, but why do you gotta call it like my frigging Comcast bill?

I mean, it’s like a hundred bucks and then it’s $400 worth of little fees throughout the lines. I’m like, could you [00:54:00] guys just tell me my bill’s 400 bucks? I don’t need to know that I have to pay this stupid fee. So, again, maybe take us back in time to, you said this was like a two year project. So what were some of the conversations that happened leading into that?

What were some of the decisions that you made? How did you take action on those? And then what has been in the impact?

Kendall: So it, the origin story is, sort of interesting because, we, had a consultant do a presentation about what motivates people, in financial services and what motivates them to switch from one fi to another. And,unsurprisingly this consultant, shared with us that,customers don’t like to pay fees.

And I’m thinking, well, yeah, I hope we didn’t pay a lot for that sage advice. I think everybody knows that. And so as, we were debriefing, over a cocktail, after the meeting was over, I. I threw [00:55:00] out the, ridiculous suggestion if, well, if members don’t like them, how about if we just stop charging them? And, credit unions are a product largely of their birth. and so we started as the IBM employees credit Union in 1967. And so we have, relatively affluent members, that are relatively fee averse. And so as compared to our peers, we always had a lower non-interest income, from, banking fees than they did.

And, so the, and so my logic was, look, we can turn a, weakness, which is low fee income into a strength. We can walk away from income that we don’t feel good about earning anyway because what, sort of world does it make sense for me to charge you to borrow your money? and, we can and, we can fix what’s [00:56:00] wrong with banking and, we can do this.

And of course, everybody thought I’d completely lost my mind. and so I decided I was gonna just harp on it for a while. And so I did. And we talked about it, and people started to come around, oh, this is how we can, this is how we can offset that income in some form or fashion.

and, so we, went on to do some more research that told, us that, our higher balance accounts. generally are more stable and have less, debit card interchange and our lower balance accounts or debit card swipers, and they have much higher interchange. And so we, we made the decision that we were gonna offset that by, promoting debit card use among lower balance accounts, and then using the higher deposit balance accounts to help with our net [00:57:00] interest margin to fund our loan portfolio.

So, today we’re at 99% loan to deposit. And so we, have a tendency to always run very hot because we are a, we’re a, we are, we’re a credit union, not a savers union. And, and so we think we exist to, to grant credit. And, and so we, did probably a year’s worth of research. And, we wanted to tread carefully because this is a one-way door for us.

This is a, this is not a decision we can unmake in two years or in five years when we say, yeah, it didn’t really work out for us. Nevermind. and, so this was an irrevocable decision and so we felt like we needed 98% of the available information to make the decision, and that’s what took us so long.

And then, it took a while to figure out in our core to turn off charging fees because core banking systems are built to charge fees, [00:58:00] not to not charge fees. And, so that was, that was a task. And so, from, concept in 2019 to go live in February of 2022, that’s, a pretty long runway for a crazy idea.

And, so we remain the only full service financial institution in the us. It is completely fee free on the deposit side, we really hoped others would follow us.

Josh: Why do you think they haven’t?

Kendall: ‘ cause it’s easy money

and nothing that’s worth doing is easy.

Josh: Yeah,

Kendall: And, so, and, we really came to believe that was a moral imperative for us. That, that, we did not wanna make money that way. It was wrong for us to make money that way, to make money on the back of our member. And so, that, and that became kind of a crusade for us.

Josh: can I’m making a wild [00:59:00] speculation here, so please tell me if I’m crazy or off base, as you simplified your product lines and played more games that you knew you could win. I have to imagine that made that decision to go fee free a little bit easier too, right? Like going back to your, the default rates on indirect auto lending, right?

It’s like, hey, look, I mean, we’re, lending out this money so you can get this car, we’re hoping we’re gonna make some money back off of it, but if we’ve gotta eat a bunch of charge offs, if we’ve gotta eat a bunch of, NSF fees, to, transfer money over to take the payment for this loan, we’ve gotta charge some fees to offset some of that.

But if you eliminate those types of business, does it make the decision easier?

Kendall: It, does make the decision easier. And the, thing that we did ahead of going fee free is we have one checking account. We have one money market account, we have one savings account, we have a cd, but it’s the same cd. It just has different terms. [01:00:00] And, so we even simplified our suite of product offerings because, why have three or four different flavors of checking account if you’re going to, if you’re gonna hang your hat on fee free,

Josh: Yeah, I can see that because there’s a lot of, the reason why you’d have multiple different types of accounts is different tiers, different rewards, different fee structures based on, but if you’ve eliminated all of that, then what’s the point of the complexity?

Kendall: then what’s the point of that? 

Josh: Yeah. 

Kendall: and so it was a, it, it, caused a lot of confusion, among our, peer credit unions because they hadn’t considered that. Previously. And so, NSF data for credit unions, NSF fee data for credit unions above a billion dollars was, on every call report in 2024.

And so we pulled the data in aggregate and we looked at [01:01:00] it, and fully one third of credit unions in the US would not be profitable without NSF income.

Josh: Damn.

Kendall: And, and, I think that, over the long term is a threat to our tax status.

Josh: Yeah.

Kendall: because that is, that is, that is not the definition of service to your member.

that is, those are fees that are built on the back of your member. And, if, your game is improving the financial lives of your members, then you’re playing the game wrong.

Josh: I, don’t wanna speak for him. because one, I’m not that smart. One, I don’t have as good of an accent. Two, I’m not as snarky, but, mostly I’m just not as smart. But I know Ron Chevlin has a whole thing on like the, junk fees and, no, I think there’s a lot to that [01:02:00] Kendall. I mean, I wanna be, respectful of, it’s like you were saying, I mean, you, if, your credit union would be.

Non-profitable if you eliminated those, I mean, you have to rethink a lot of things right before you can just go one day and say, we’re gonna completely eliminate that fee. Because then that takes us back to the conversation we had earlier of, if your credit union has to shut its doors, then yes, maybe you’re charging this NSF fee that people call a junk fee, but maybe you’re doing a bunch of other good in another area that would also disappear if your credit union disappeared.

Right? So I wanna be respectful of, kind of the nuance of this. It’s not as simple as black and white, but at the same time, I’m kind of with you. Like we, we need to start thinking about do we need to change the status quo? Do we need to change the way in which we make money so that if all of those fees were eliminated overnight, we’re still a profitable credit union like you are.

Kendall: And, even though our fee free [01:03:00] idea was three years in, its in, its making the remaking of our business didn’t happen in three years. I look at my, I look at my tenure at Amplify and I break it down into to a, small handful of seasons that I was. Responsible for. so when I got to amplify, we had a fairly significant delinquency and charge off problem, in 2010.

And so the first three year period that I spent at Amplify it was fixing that delinquency and charge off problem and, fixing our balance sheet. So that was a three year project. the next four year project was rebuilding our lending operations and, learning,building the, enabling structures to make better credit decisions.

and, then, the next [01:04:00] period was, equipping our systems. To move us into the next phase, doing a, doing a, charter change from a federal charter to a state charter, doing a core conversion,to a modern core. when I got here, our member numbers had letters and decimals in them, and I was like, how in the world does that work?

And, and,

Josh: members didn’t know their member number by heart. Now think about it then.

Kendall: and so it, it’s really interesting because it, I had to suspend my disbelief, but, eventually we, did a quirk conversion because we knew we had no choice if we wanted to, be able to, be in the businesses at scale that we were in. And, and then the most recent, phase has been, navigating the interesting times that we’ve had over the last five years.

And at the same time. Standing up fee free commercial banking. And, so that is, [01:05:00] so I look at the seasons of my career at Amplify and, and we launched fee free banking in June of last year. and I’m, looking forward to discovering the next season of my career here.

Josh: I think that’s a, it’s another interesting way of looking at it, Kendall. I mean, so many times there’s a, what’s the word I’m looking for? Like, I. There’s almost a doubling that happens in the energy around a movement of things, right? And so when you look back in time, or I guess when you look at it today, you’re like, oh my gosh.

Like Kendall woke up one day after a presentation and said, we should go fee free. And then a year later they were fee free. That’s crazy. But in all reality, like you outlined it, it actually took a very long time to get to that point. But without the previous steps, you would not have been able to have that revelation of, we’re gonna do this.

And so it was kind of that compounding, [01:06:00] almost like a compounding of money. It’s like if I put in a dollar now and then I put in a dollar tomorrow, and then I put in a dollar tomorrow, like it doesn’t feel like I’m doing much. But if I just close my eyes and I wake up 10 years later, I’m like, oh, holy crap.

I got a bunch of money. Right. Same kind of thing. It’s like you may have felt like you were just doing little incremental steps, but they kind of built all on each other to where all of a sudden it looks like you’re making these massive leaps, but they’re just built on smaller leaps that you’ve taken to get you to this point.

Kendall: So, and there are times that we at Amplify do things, but we don’t exactly know why we did them. And, it becomes evident to us down the way. So I’ll give you an example. In 20, in 20, late 2018, early 2019, we eliminated desktop computers and everyone operated off of a laptop. we built, the infrastructure to, a a, rock solid [01:07:00] VPN, where essentially all of our employees are operating off of a Meraki router, always connected to our network.

and, and we didn’t know exactly why we built that security infrastructure in 2018. in, March of 2020, we found out

Josh: found out why.

Kendall: why we did. And and so it’s interesting before I. The pandemic. We had, one remote employee who lived in Minnesota. and today, we have employees who live in 22 states, and we’re, primarily a remote workforce.

and, so it, it’s interesting, we’re, enjoying our NCUA exam this week, and, the examiners are in our office and I’m at home. so I, think that, the irony may be lost on, the examiners, but hey, so be it. but, and, then having the ability to do remote work and embracing remote work gave us the opportunity to hire the right people who didn’t [01:08:00] necessarily live in Austin, Texas.

So our, head of commercial, our commercial lending lives in Winston-Salem, North Carolina.

Our, our head of commercial banking lives in Wisconsin. our head of product management lives in Florida, and, so we’ve, we, this has given us the, opportunity to, to find and hire the best talent wherever they are.

They don’t have to be in Austin.

Josh: I, gotta ask, what do your, peer CEOs think about you?

Kendall: They can’t figure that guy out. because I have a, tendency to question everything. I, I have, I like to, have information that I didn’t have previously, and the only way to do that is to ask a lot of questions and then listen to the answer instead of having a [01:09:00] preconceived notion of what you think the answer’s gonna be.

Josh: that’s why I’ve loved doing this podcast so much, Kendall. I’d like to think we’re kind of kindred spirits in that sense. Like, I, like to ask a lot of questions and it’s not because I’m, and, I think how you ask the question and the attitude and and the tone in which you ask, it has a big, a big part in how it’s perceived.

But like with you, I, get the sense that it’s like when you ask the question, it’s not, I’m not asking you this question because I think you’re stupid. Or I’m questioning your judgment. I’m just genuinely curious. I’m just genuinely curious. I’d like to know, no, why did you do that? Outweigh, because sometimes the answer to that is, well, shit, I don’t know.

Like I just, I pulled that one out of thin air. Or sometimes the answer is, I did a ton of research and here’s my research and this is my logic. I’m like, well, great. Then it sounds like you put in the effort. I love that. I didn’t understand that, and now I’m better informed because of that, and I, feel like that’s what I get [01:10:00] outta this podcast is like, I get to talk to you and I get to ask you questions like, what were you thinking when you were going fee free a knucklehead?

But like, my intention is no, I’m just genuinely curious, like, what were you thinking? Like I, I’d love to understand your thought process. I think that’s really a, cool thing to be able to do.

Kendall: and, the ability to to, have a, radical transparency culture, and to ask questions internally is, super helpful. because I, as CEO don’t really accomplish much with my own hands,

it, it is only through the best efforts of the people on my team that we accomplish our goal, whatever that goal might be.

you there will be oftentimes a vendor reach out to me and say, well, you, you need this product or this service. And it’s like, well, maybe. But I’m not the decision maker on that. I’m [01:11:00] not gonna, I’m not gonna talk about what our loan origination system is for, our mortgage banking unit.

I’m not the decision maker on that. Someone else is. and, it’s, it, is, an understanding that, my, my real job is to, remove the obstacles to success for the people on our team. I want them to be successful here. I want them to be happy here. I want them to be challenged here. and so my job is removing the obstacles to all of those things.

Josh: Oh yeah. again, I think that goes back to what we were talking about earlier too. Just like when we say those types of things out loud, you’re like, that makes all the sense in the world. But it’s amazing how, how sometimes we just don’t live it in practice. And so sometimes you almost have to change the perception of people.

we, I have a guy on my team, Kendall, who’s absolutely brilliant, and he’s a young guy and if you look at his, LinkedIn, it’s not gonna show huge resume. It’s not [01:12:00] gonna show huge title. And he’s one of our business development representatives, and we were looking at sourcing a product for that team to use, and the sales person just could not get it through their head.

Even when I straight bluntly told them, I was like, I may sign the contract, but I am not the decision maker. He’s the decision maker. Sell him. And they’re like, no, I gotta sell the title. I gotta sell the title. I gotta sell the title. And I was like, dude, I’m never gonna touch this thing.

Kendall: Right.

Josh: touch this thing daily.

So I want him to be happy with it. My job is just to remove that roadblock for him, and the roadblock is to provide him with the technology that he wants to do his job well. So I’ll sign the contract, but I’m not making the decision, whatever he comes to me with and says, barring it being like 10 x the budget, he’s gonna get it.

You know? But it’s just, it’s funny how people are like, well, no, organizations don’t really empower people to do that. I’m like, ah, actually some of ’em do.

Kendall: Some of them do.

Josh: And you’d be amazed at how [01:13:00] fast they can move and what they can accomplish when you do that. so, I want to close out the thought of, so, your, peer CEOs dunno what to do with you.

What about regulators? So you said you’ve got ’em in the office right now. How do they look at just kind of this non-traditional approach that you guys have taken?

Kendall: So, they’re, quite confused by the fact that we’re not a car loan credit union. and so they will look at our balance sheet and, will say that, you’ve got a concentration in one to four family real estate. Yeah. And, well, you’ve got interest rate risk. Yeah, but we’ve got a hedge, we’ve got derivatives on our balance sheet to hedge against rising or falling rates.

And, so we are putting, we’re, we are employing practices that aren’t routinely used in, credit union land. you know, we have this big off balance sheet asset called,servicing rights, capitalized Servicing rights. We’ve got hedges on that against rising or falling [01:14:00] interest rates. And so it, it has taken some time for them to, to understand our business and, and to be comfortable with it.

we’ve got, well, more commercial loans than most credit unions have on their balance sheet. And, commercial loans, risky they say, and it’s like, well, they can be, but if you understand credit and you monitor them properly. You, manage that risk. So, it’s been an educational experience.

we’ve been teaching them. So,

Josh: I was gonna say, it probably gets really interesting too, if you like build a relationship with a regulator over a couple of audits. And then you get a new one and you’re like, ah, crap, we gotta start this all

Kendall: start over with this guy. Yeah.

Josh: Yeah. man, I tell you what, it’s, again, I just, this is gonna sound so dorky and cheesy, but this is what I completely never expected the podcast to become, but I’m so thankful that it’s become, is this [01:15:00] opportunity to meet people like you that I don’t think I would’ve otherwise had the chance to meet.

And, it’s really cool to just, like we were saying earlier, like hear diverse thoughts, opinions, ways of going about it. Nobody’s ways perfect, right, wrong or indifferent. We kind of pick our own paths and I’m just curious to see what people picked and why and how they’re doing it. And honestly, Kendall, it’s really rad to see that you guys are just being really successful with making your own way and kind of challenging that status quo.

So kudos to you.

Kendall: Thank you. Thank you. It’s been, it’s been a, it’s been a wonderful ride here at Amplify and, I’m, really excited, as I said, to see what the next chapter is.

Josh: Well, and peers may call you crazy or not know what to do with you, but I tell you what, there’s one thing they can’t say and it’s, they definitely can’t say that you’re not passionate, and passionate about, I would say, the right things, which is the focus on the member. So I’m also just really excited to see people like you in this industry that again, are just unabashedly focused on, on that core principle.

[01:16:00] I’m here where I am because a credit union took that mindset on me, right? And so I wanna see more credit unions out there just killing the game, helping people’s financial lives, helping their futures, and that’s what you guys are doing. So again, kudos.

Kendall: well, thanks, and, as I say over and over again, member cares job one. So. That’s what we’re here for.

Josh: Well, before I let you go, I got two final questions for you, sir. So, first off, where do you go to get information? How do you stay up to date on what’s happening? How do you keep an eye on, the risks? What are your go-to sources? I.

Kendall: everything everywhere, all at once. and I am a, ravenous consumer of information. I start the day, of course, with American Banker, that is a must read. I read, of course the New York Times, Washington Post,south China Morning Post, the Guardian. and those are, those four are really my news sources.

But, I always have, CNBC humming, [01:17:00] in the background. so I can well on in a web browser. and I’m constantly, looking there. I keep the 10 year treasury. and I keep the two year treasury, up all the time. So I’m, constantly checking those. and, so it is just a general never ending quest for knowledge about, economics or what’s happening in our industry.

I’ve been focused a lot on payments recently because I think, payments are going to be highly disruptive, and, may be, and may, challenge interchange income in ways that we don’t yet understand and many people aren’t yet thinking about. that’s a subject of another long,discussion.

but what I do is I aggregate information that is relevant to the various segments of our business, and I email it to myself, and then at an appropriate hour of the day, I’ll send it on to the. to the right, to the right person. whether it’s [01:18:00] something about payments or whether it’s something about the commercial lending space or whatever it may be.

and, I wanna be respectful of people’s time, so you’re not gonna get, you’re not gonna get a 5:00 AM email from me, or you’re not gonna get a Saturday, at, four o’clock in the afternoon email from me, even though that may be the time that I’ve come across this information that might be relevant to our business.

So,

Josh: Hmm. I love it. well, if people want to connect with you or if they wanna learn more about your credit union, how can they do that?

Kendall: super easy. You can find out, lots about us@goamplify.com. I’m pretty easy guy to find on LinkedIn. and, so connect with me there. I’d, I’d love to get to know you and love to, to hear your story.

Josh: Sounds good. Well, Kendall, thank you again. This has been an absolute blast. I’ve really enjoyed this conversation. You’re just a fun guy to talk to. super insightful as well, and I, appreciate, again, kind of talking through the actual steps to action versus just talking about the concepts. so thanks for taking time and coming and being a guest on the Digital Banking podcast with [01:19:00] me.

Kendall: Well, I’m super glad to do it. It’s been great getting to know you and I’d like to maintain the connection.

Josh: Absolutely. Thank you, sir.

Kendall: right. ​