Olden Lane

The Credit Union Strategic Advisor

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About Us

Many have asked about the origins of our firm’s name. Olden Lane is a small street in Princeton, New Jersey which comprised the majority of Albert Einstein’s daily stroll from his home on Mercer Street to the Institute of Advanced Study, where he served as a faculty member from 1933 until his death in 1955.

An inspirational figure to many, Einstein is considered the greatest physicist of all time and was named Time Magazine’s Person of the 20th Century. At the Institute, Einstein pursued the goal of providing a framework for a unified understanding of the basic laws of the physical universe.

At Olden Lane, we are inspired by Einstein’s insatiable curiosity and his tireless spirit for inquiry. We hope to bring just a bit of that enthusiasm to the work we do for our credit union clients.

We are grounded in a culture of creativity, operational excellence, and dedication to our credit union clients. We work diligently to understand each client’s unique circumstances and offer individualized service. We can devise customized solutions across a range of funding, investment and capital needs utilizing a wide range of capital markets expertise.

News

Six Topics for Planning Season

11/14/2022

With planning season in full swing, we highlight six topics that should be top of mind for credit unions in this dynamic market environment

For Discussion

The Tides They are a Changin'

July 2022

A writeup from the Olden Lane team discussing DTC Non-Member deposits and their importance given the recent tightening in market liquidity.

Thoughts

With Flying Colors: A Discussion of Subordinated Debt

August 2022

Olden Lane’s own Daniel Prezioso sits down with former NCUA Executive Director Mark Treichel to discuss the state of the credit union subordinated debt market.

News

Macchiarola Discusses Investment Strategies at NAFCU CFO Summit

September 22, 2022

Against a backdrop of inflationary pressures, tightening liquidity and increasing interest rates, Olden Lane’s CEO, Mike Macchiarola took part in a discussion on Investment Strategies at NAFCU’s CFO Summit in Annapolis, Maryland.

Our Team

We have gathered a highly qualified team of professionals focused on solving problems. Each member of our team brings a unique background and provides a different perspective and insight. As a boutique firm, we value each client and focus on nurturing relationships. We work every day to distinguish our firm by its delivery of compelling solutions and its superior service, consistently over time. Click on any of their pictures to learn more about our team.

Making the simple complicated is easy. Making the complicated simple is hard. That’s what we strive to do here at Olden Lane.

– Mike Macchiarola

Secondary Capital

Since 1996, the NCUA has authorized Low-Income Credits Unions (LICUs) to raise uninsured secondary capital in the form of subordinated debt. For a LICU, the capital counts directly towards the PCA Net Worth ratio, a powerful tool for credit unions to strengthen their institution in the face of adverse economic conditions and to invest in improvements to the member experience. Despite this significant regulatory relief, the mechanism was sparsely used during its first decade.

Prior to the 2008 Financial Crisis, when the US Treasury invested directly in credit union secondary capital as part of its Troubled Asset Relief Program (TARP), total outstanding credit union secondary capital remained below $30 million. It served primarily as a tool to aid struggling credit unions. The program also suffered from a non-transparent and inconsistent application process which left many applicants confused and disappointed. This began to change in 2018, as financial servicers like Olden Lane focused attention on the underserved nature of the credit union market and set out to improve the application process for participating credit unions.

From 2018 to year-end 2021, LICUs added more than $700 million in secondary capital to their balance sheets, with the team at Olden Lane raising more for clients than any other advisors. This growth followed Letter to Credit Unions 19-01 from the NCUA, which articulated the requirements for approval of a secondary capital plan. This letter, combined with the maturation of the market and a diversification in the use of secondary capital, led to the aggressive growth of secondary capital. No longer a lifeboat for struggling credit unions, financially sound credit unions began taking on secondary capital to support organic and inorganic growth strategies. The market began growing at such a rate that the NCUA adopted a new set of rules altogether in the beginning of 2022. In the process, the NCUA did away with the term secondary capital and, as of January 1, 2022, all credit unions now issue subordinated debt. The new name was the least significant change.

Subordinated Debt

With the transition to the new subordinated debt regime, the universe of credit unions capable of raising subordinated debt has increased dramatically. No longer limited to just low-income designated credit unions (who can still issue under the new rule, regardless of size), now all credit unions with greater than $500 million in assets (“complex credit unions”) can raise subordinated debt following the approval of an application to the NCUA. For complex credit unions, the subordinated debt counts towards their numerator in their Risk Based Capital ratio as opposed to low-income credit unions who see the debt count towards both their PCA and Risk Based Net Worth calculations. There were additional, nuanced changes to the rule that affect how credit unions must approach the process of raising further capital. 

As the market continues to grow, todays subordinated debt is commonly deployed to:

  •  Support organic growth for a credit union –  If asset growth outpaces retained earnings, the dilution can be harmful to an otherwise thriving credit union. This dilution can be offset with subordinated debt
  • Pursue an inorganic, acquisition-based growth strategy –  These strategies are typically dilutive to the capital ratios of the acquiring credit union. Subordinated debt can offset these negatives
  • Preparation for economic headwinds – Subordinated debt can bolster the balance sheet of a credit union, absorbing losses and helping the credit union through economically turbulent periods that would otherwise harm capital ratios

Regardless of the reason for your credit union pursuing approval to raise subordinated debt, Olden Lane can help. We can assist your team in crafting an application to submit to the NCUA. Upon approval, we help place your debt across our investor network. Our team has gained approval to raise more than $250 million in subordinated debt since the onset of the new rule in January 2022.

Reach out today to see if Olden Lane can help your credit union gain low-income status, outline a bank or credit union M&A strategy, or help your credit union apply for and raise subordinated debt.

We’ve taken our east-coast roots and spread nationally by building and maintaining strong relationships with our clients. Whether you’re based on the west coast, the south-east, or the mid-west, our team can help you grow.

Hedging Advisory

Olden Lane’s industry-leading work in arranging credit union subordinated debt and its related strategic dialogue with credit union leaders positions the firm to provide insight and thought leadership to these markets.

Our team brings decades of experience in derivatives, markets, and corporate finance to assist credit unions with hedging strategies and related derivative instruments, including:

  • Interest Rate Futures and related exchange traded options
  • Over the Counter derivative instruments such as interest rate swaps, swaptions, caps, and floors
  • TBAs
  • Other bespoke solutions

Olden Lane’s services can include all or portions of the following:

  • Development of best-in-class derivative and hedging policies and procedures
  • Educational materials and training for executives and board members
  • Evaluation of hedging strategies, including economic impact, accounting treatment and liquidity effects.
  • Negotiation of legal documents
  • Valuation Services and transaction/collateral management/monitoring
  • Monthly Management and Quarterly Board reports – The NCUA recently issued an Update to the Interest Rate Risk Supervisory Framework in response to the recent unprecedented movements in interest rates.

The NCUA signaled a sense of urgency, stating “[t]he level and source of IRR exposure will determine the degree of urgency in developing and implementing mitigation strategies.  When assessing how credit unions are proactively monitoring IRR and related issues, examiner oversight will increase until a credit union adopts an effective program, which includes safe and sound practices.”

The NCUA signaled that an effective IRR Program should include communication, action, and controls to evaluate impact of market risks, stating that “[e]xaminers will assess the experience, effectiveness, and actions taken by the credit union personnel who guide and supervise a credit union’s IRR management. This assessment speaks to the capability of a credit union’s leadership team, which is reflected in the Management (‘M’) CAMELS component rating”

While navigating the world of hedging can be daunting, Olden Lane’s multi-disciplinary team of experts is available to help. We have successfully implemented effective hedging programs for several clients since our effort began in this space a little over a year ago.

Please reach out to info@oldenlane.com to schedule a call with our team.

Non-Member Funding

It is critical for credit unions to avail themselves of reliable liquidity sources. DTC-eligible CDs can be an important part of that mix. The recent experience of the pandemic demonstrated the value of sourcing external liquidity in a “callable” format, as many credit unions were forced to retain FHLB borrowing during a period of excess liquidity. This predicament resulted in additional pressure on balance sheet and capital ratios that did not have a convenient remedy. DTC-eligible CDs are one of the most convenient and cost-effective methods to incorporate external funding in a callable format.


Considering the length of the low interest rate environment and the speed of its reversal, many credit unions are surprised by the pace at which their liquidity posture has reversed from surplus to scarcity.
In this environment, the availability of non-member funding is as important as it has ever been. Olden Lane’s non-member funding program is designed for operational efficiency and, in a dynamic market where levels are changing constantly, we distinguish ourselves by our level of client communication and our reliable service.

If you are interested in learning more about Olden Lane’s non-member funding program, please contact us at info@oldenlane.com to schedule a call with our team.

Contact Us

Talk to the team at Olden Lane today to find out how we can help your credit union face the challenges of today. Reach out to info@oldenlane.com or fill out the form below to get in touch.

Michael Kochmann, Partner and COO

Mike is a Partner of Olden Lane Inc. He oversees the firm’s operations, its financial models, and its Unit Investment Trust platform. Mike’s expertise is sought after by credit unions on issues ranging from balance sheet and funding strategies to risk-based capital, merger, and acquisition financing, and CFDI and LICU designation. His analysis and collaboration with credit unions has been foundational to some of the most significant funding and merger and acquisition activities in the credit union industry over the past several years.

Prior to founding Olden Lane, Mike was a Director at BlackRock, where he oversaw the establishment and maintenance of proprietary portfolios. He also served as Managing Director and Head of Unit Investment Trusts for Citigroup/Citi Smith Barney for more than ten years. In this role, he led strategic planning, operations, sales, marketing, investment management, and risk management for the organization’s Unit Investment Trust Department. Mike also coordinated UIT distribution through a global broker/dealer network. He was responsible for the underwriting and SEC registration of all UITs in compliance with the 1940 Act. Mike spent twenty years with Merrill Lynch, ultimately serving as Director and Head of Sales and Secondary Market, where he led the strategic planning, development, marketing, and sales throughout Merrill Lynch. Mike attended the State University of New York at Plattsburg, where he was an Economics major.

Michael Macchiarola, Partner and CEO

A trusted advisor to credit unions across the country, Mike is a seasoned transactional attorney and financial product structurer with significant experience in law and academia. As the CEO of Olden Lane Inc., Mike oversees the activities of the Firm’s broker dealer and registered investment advisor. Mike also coordinates the distribution efforts of Olden Lane’s subordinated debt transactions, having managed some of the industry’s largest and most complex deals over the last several years.

Prior to joining Olden Lane, Mike was a Managing Director for Product Development at Equinox Financial Solutions, where he designed and structured several first-of-their-kind products. Mike also served as a Distinguished Lecturer at City University of New York, with responsibilities at both the CUNY Law School and Queens College. Prior to his time as a professor, he was a Special Counsel at Cadwalader, representing broker-dealers, banks and large hedge funds and managing the registered shelf offerings of several large banks. Mike began his financial services career as a Vice President at Goldman Sachs & Co., where he traded equities, derivatives, and synthetics.

Mike earned his J.D. from New York University School of Law, his M.B.A. from Columbia Business School, and his A.B. from College of The Holy Cross. He has been an Adjunct Professor at Seton Hall Law School and St. Francis College, where he previously served as a member of the Board of Trustees. Mike speaks at credit union conferences and is a regular contributor to credit union trade journals. In addition, his academic writings have been published in some of the country’s leading legal and business journals, including the Cornell Journal of Law and Public Policy, University of Pennsylvania Law Review, University of Virginia Law and Business Review, and the Yale Journal on Regulation. Mike holds Series 3, 4, 7, 24, 52, 53 and 63 licenses.

Dan Prezioso, Partner

Dan’s advice and counsel is sought after by many of the country’s leading credit unions. Dan is a transactional attorney with significant experience on a wide range of financial products and investment vehicles. He is deeply involved in Olden Lane’s subordinated debt efforts, overseeing the preparation of regulatory submissions for the Firm’s credit union clients. Dan manages many of the Firm’s external relationships and interactions with regulators. He is also responsible for several of Olden Lane’s new ventures, including ongoing efforts to provide credit unions with highly customized assets and selective Fintech solutions.

Prior to joining Olden Lane, Dan was the Associate General Counsel at the Equinox Financial Group in Princeton, New Jersey, where he provided the primary legal coverage for the firm’s registered investment adviser and affiliated broker dealer and oversaw the legal and compliance needs of mutual funds and commodity pools with assets over $1.7 billion.

Prior to joining Equinox, Dan was an associate in the world-renowned Structured Products and Derivatives Group at Cadwalader, Wickersham & Taft LLP, where he worked extensively with bank issuers of structured notes and drafted a wide variety of trading and financing related documentation.

Dan received his J.D. magna cum laude from Seton Hall Law School and his B.A. cum laude from the University of Maryland. He holds the Series 3 and 7 licenses.

Peter Marquardt, Partner

Peter is a Partner of Olden Lane and has served as the firm’s Chief Compliance Officer since its inception. One of Olden Lane’s early investors is The LeoGroup, LLC, where Peter previously served as the Chief Operating Officer. Peter brings over 30 years of broad-based financial services experience managing many business aspects of both investment advisory and broker dealer firms. As CCO, Peter provides guidance to ensure proper operational and regulatory controls for the firm.

Prior to joining Olden Lane, Peter was the Chief Administrative and Compliance Officer for FCG Advisors, LLC and FCG Wealth Management, LLC. Peter also enjoyed 25 years managing multiple business lines for firms including Goldman Sachs, Charles Schwab and Spear, Leads & Kellogg.

​Peter received a B.A. from Lehigh University and a Masters Certificate in Management from Tulane University’s A.B. Freeman School of Business. He also holds the Certified Securities Compliance Professional (CSCP) designation from the National Society of Compliance Professionals and the Certified Anti-Money Laundering Specialist (CAMS) from the Association of Certified Anti-Money Laundering Specialists. Peter holds Series 4, 7, 63, 24, 79 and 99 licenses.

Larry Rascio, Head of Fixed Income Trading

Larry is the Head of Fixed Income Trading at Olden Lane. Before joining Olden Lane, Larry was the Head of Trading at Arq Advisors, a boutique brokerage firm offering advisory, investment banking, capital raising, and securities trading services to institutional clients. Larry joined Arq from XP Investments, where he served as a Managing Director and Co-Head of the US Fixed Income and Asset Management Divisions.

​Prior to his tenure at XP, Larry was a Co-Founding Principal and Portfolio Manager for STRM Capital Management, LLC, a commodity trading advisor. There, he served as Head of Trading and Lead Developer overseeing all front-office functions including execution, portfolio construction, platform optimization, and model design for a systematic managed futures fund. During his time at STRM Capital, Larry developed and executed a clear, disciplined, and sustainable investment process for the firm’s short-term multi-model systemic and blended portfolios. Between 2013-2018, his process produced returns of 109%.

​Larry earned a Bachelor of Science degree in Biochemistry, with a special focus on genome mapping, from Syracuse University in 1994. He holds the Series 7, 63, and 3 designations.

David Greenberg, Head of Advisory Solutions

David Greenberg is the Head of Advisory Services at Olden Lane. Before joining Olden Lane, David spearheaded the funding solutions practice at Lucid Management and Capital, an RIA providing short-term investment products and solutions to institutional clients. David joined Lucid from EA Markets, an independent investment bank, where he advised multiple clients on derivatives and risk management.

Prior to his tenure at EA, David was the founder and President of C-Suite Associates, a derivative and investment consulting firm. There, he provided hedging and related advisory services to specialty finance companies, major investment banks, and other institutions. David’s experience also includes senior roles at Pacific Global Advisors, Deutsche Bank Securities, JP Morgan and Barclays.

David received his MBA from Columbia Business School and his B.S. in Systems Engineering from the University of Virginia. David holds Series 3, 7, and 63 licenses.

John McHugh, Lead Financial Analyst

John manages the Firm’s financial analysis and modeling to support Olden Lane’s client services. Prior to joining Olden Lane, John worked at Goldman Sachs Group for over 20 years where he held various accounting and operations roles. Most recently, John acted in CFO/COO roles for various mortgage and credit related businesses at Goldman. Prior to joining Goldman Sachs, John was an audit manager at PriceWaterhouseCoopers in the firm’s Investment Management Services group. John holds the Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA) designations. He received his B.S. in Accounting from Fairfield University.

Eli Krahn, Associate

The most recent member of the Olden Lane team, Eli has significant input on the design and refinement of our financial models. Additionally, as the youngest member of the Olden Lane team, he serves as de facto head of IT. He previously interned in various roles within the private equity and investment banking space, focusing on middle-market M&A transactions, both buy-side and sell-side.

Eli received a Bachelor of Science in Engineering from Princeton University where he graduated with honors with a degree in Operations Research and Financial Engineering and a minor in Finance. He performed his thesis work on the impact of quantitative easing on fixed income markets in 2020 and 2021. He holds the Series 79 license.

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Eli Krahn, Associate

The most recent member of the Olden Lane team, Eli has significant input on the design and refinement of our financial models. He previously interned in various roles within the private equity and investment banking space.

 

Eli received a Bachelor of Science in Engineering from Princeton University where he graduated cum laude with a degree in Operations Research and Financial Engineering and a minor in Finance. He holds the Series 79 license.