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Scott Budde
Name: Scott Budde
Title: Co-Founder, Incoming CEO and President, Maine Harvest Credit Union
Age: 59
Industry experience: 26 years
There is a $186 million financing gap among Maine farmer and food producers, according to Maine Farmland Trust. To fill this hole, a group of local stakeholders is launching the first ever credit union in the country to lend exclusively to farmers and food entrepreneurs. Maine Harvest Credit Union is seeking a state charter in order to provide specialized loans and mortgages to boost Maine’s growing agricultural economy, which consists of over 8,000 farms, $3.8 billion in sales and 24,000 jobs.
The agricultural sector is one of the largest in the state, with 40 percent of farmers currently age 34 or younger. Members of Maine Harvest will become part of the Maine Credit Union League and have access to shared branching and ATMs within its statewide network.
Just last month, the project reached a significant milestone when it hit its $2.4 million fundraising goal. Co-founder Scott Budde is planning to become president and CEO of the new credit union once it officially forms. He previously worked in the investment management arm of TIAA and would go on to create the first division of the bank focused on social and impact investing strategies. Banker & Tradesman caught up with the Bowdoin College alumni to learn more about Maine Harvest.
Q: How will the field of membership at Maine Harvest will be defined?
A: Maine Harvest’s field of membership will be – in full credit union lingo – a multiple associational common bond consisting of the membership of two statewide nonprofits: The Maine Organic Farmers and Gardeners Association (MOFGA) and Maine Farmland Trust (MFT). We are applying for a state charter and all lending will be within Maine, though deposits can come from any MFT or MOFGA member.
Q: What types of products will the credit union provide? Anything new that will be unique to the needs of farmers?
A: Importantly, we are planning on being a very specialized institution and we are not trying to be full service by any means. On the lending side, we will focus on business loans for small farm mortgages, equipment and general business expansion. On the deposit side, we will focus only on savings and longer-term CDs. While none of these products on their own are unique, we believe the focus on the $25,000 to $400,000 loan size is underserved.
Q: Research shows there is a $186 million financing gap among Maine farmers and producers. Why do you think this is?
A: This gap estimate is based on our own surveying of the proposed field of membership and then projecting it across the entire field of membership. This figure is specifically related to land access, both buying small farms and acquiring nearby land parcels. I think the gap is relatively large for many reasons, but one is that ag lending is considered a specialized form of lending and most community financial institutions don’t feel they have the expertise to do it effectively. In New England, where this type of small-scale, sustainable agriculture is being rebuilt, the demand is there but not at the scale to yet make it attractive to larger community or national banks.
Scott Budde, project director of Maine Harvest Credit Project, left, and Sam May, advisory board chairman, at Broadturn Farm in Scarborough. Photo courtesy of Tim Greenway
Q: Why haven’t farmers and producers been able to obtain financing from other financial institutions in Maine? What will make Maine Harvest uniquely situated to provide this credit?
A: This is a big topic but in general, community banks rarely want to do ag lending, regardless of risk. Most credit unions don’t do too much business lending, let alone ag lending. The Farm Credit System including Farm Credit East generally focuses on larger deals, and in Maine timber and industrial scale agriculture. Also, government programs, such as those from the USDA, are great but often with significant constraints that limit their effectiveness. Finally, loan funds are very important, but are also constrained on a number of fronts.
We hope Maine Harvest will be well-situated to provide this credit because of our specialization and focus on our field of membership, with a strong sense of mission that dovetails directly with those of MOFGA and MFT.
Budde’s Five Favorite Things About Working in Maine:
- My colleagues in Maine often have a very wide range of experience and are very resourceful.
- The Maine Credit Union League is incredibly helpful and innovative to our work.
- It has never taken me longer than 15 minutes to get to the Portland Airport; nor have I event spent more than three minutes in TSA screening.
- Dogs are very widely accepted at work and in every Maine financial institution I’ve visited.
- Even in some pretty remote areas, there are great independent coffee shops.
