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Lending operations support brings numerous benefits to credit unions wanting to improve and expand their lending programs

  • by Lee Easterwood
  • April 1, 2022

Credit unions tapping into lending operations support receive several key benefits– from handling after-hours underwriting to processing auto loans, and more.

These types of lending support services traditionally have been used to support business continuity plans, offer service after business hours and handle overflow. However, lenders now are turning to using lending operations support to reduce risk as they grow loans through expansion into new geographic areas or to bring new product offerings into the marketplace.

CU Direct Connect (CUDC) leverages the power of people, technology, and services to improve the speed of processing and funding for lenders. The result is a better borrower experience and enhanced auto dealer relationships.

CUDC’s lending operations support include indirect lending solutions, full-service loan underwriting, processing and funding, document processing automation, and call center services.

In addition to processing and underwriting indirect auto loans, CUDC recently introduced processing and underwriting of auto refinance loans sourced by third-party brokers, RV financing and leases.

The company’s lending services support credit unions of all asset sizes in two ways: staff augmentation and de-risking market expansion or new ventures.

Staff augmentation is what credit unions historically have used an outsourced provider for; overflow or possibly full-time service so they do not over-staff in the back office. However, clients are realizing the value of these services to also expand into new markets or offer new loan products without having to guess at how to ‘staff-up.’ If a credit union expands into a new market or offers a new product, it needs operations to support it.

A technology edge for lenders

CUDC provides lenders with workforce solutions powered by innovative technology and deep industry expertise—solutions that enable them to optimize lending operations, seize new opportunities and swiftly respond to shifting market dynamics.

A key marketplace edge for lenders is CUDC’s optical character recognition and artificial intelligence machine learning technology. The system automatically identifies and stacks documents with approximately a 98% success rate, which staff then reviews, saving time and increasing lending process efficiency.

The value of these lending services are reflective in the year-over-year growth CUDC has experienced in funded loans and transactions in 2021. Support services, such as stacking, letter processing and verification calls, all are experiencing double-digit growth. CUDC has expanded its client base by 15 percent through the first nine months of 2021. Lending operations support services have increased 40 percent YTD over 2020, while transactions through its platform have increased 63% year-over-year.

MECU Credit Union of Baltimore: the benefits of partnership

Thelma Matthews, assistant VP lending production for MECU Credit Union of Baltimore, said her credit union has a “great” partnership with CU Direct Connect for their indirect lending needs.

Matthews has been with MECU for 31 years. The credit union’s headquarters is in downtown Baltimore with nine total branches. It has $1.3 billion in assets, with approximately 115,000 members. Matthews said that keeping pace with all the credit union’s lending activity is best done through a third party.

Outsourcing its indirect auto lending program to CUDC has led to more than a 14 percent increase in funding, said Matthews, who outlined advantages of third-party assistance. She noted that the credit union added almost 1,300 members via the indirect channel this year through the first three quarters. According to Matthews, “that’s something we would not have had without this indirect program.”

Reduced Cost

 Matthews said moving to CUDC has reduced the credit union’s staffing costs, “You don’t need a full-time equivalent to address every single need you have with indirect lending. We have improved our efficiencies.”

“Prior to CU Direct Connect we had a loan officer who had to look at every application, contact the member, everything,” Matthews recalled. “Once we got with CU Direct Connect [CUDL Complete], we increased volume.” Staffing benefitted as well. One of the biggest benefits from the move, according to Matthews, is their staff doesn’t have to work late evenings and on holidays to meet the demands of dealers.

“We used to have people in on holidays and weekends because if you are not available to answer calls from the dealerships, you do not get the business,” Matthews said. “This reduced our overall costs.”

“Instead of cutting checks to the dealers, the dealers get paid faster, so they like us. That has been a great benefit,” Matthews added.

SmartFund helped MECU on quality control with the many loan documents. Matthews said the credit union has a list of the documents needed, and employees can see the documents in the system as they are labeled. If a specific document is needed for audit purposes, it can be retrieved quickly.

“Everything is much better than when we were doing it all ourselves,” concluded Matthews. “Working with CU Direct Connect has improved our operations, and it also has helped our dealer relationships. They have expanded the markets we have access to. To me, that is key.”

Lee Easterwood has been with CU Direct for 10 years and has over 30 years of experience in the banking and finance industry. Currently, Lee is the Vice President of Business Development for CU Direct’s CU Direct Connect (CUDC) brand. Lee was previously the Vice President of Origination Services and Customer Support for CU Direct and he was the Regional Director of credit union and dealer sales for Southern California. Prior to joining CU Direct, Lee was the vice president of consumer and mortgage lending for Visterra CU. In addition, Lee was the SVP of Loss Control for Bank of America. Lee has a degree in Banking and Finance from the University of Mississippi.
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