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For many credit unions, the days of member loyalty expressed in steady, dependable repayments seem to be narrowing. The situation mirrors the financial services industry as a whole. There are more delinquent accounts, more members whose past activities weren't predictive of this, an increased difficulty in communicating with members, and a decreased ability to cure accounts. All of these factors have led to increasing rates and charge-offs.
In this unstable environment, the ability of credit unions to take action now, using consistent portfolio reviews to monitor accounts, is crucial. In an economy, where many consumers are living paycheck to paycheck, it is even more critical for credit unions to focus on member-centric collection strategies and employ best practices. These strategies will provide the best opportunity for credit unions to retain members, educate them on fiscal responsibility, and in the long run, strengthen their loyalty to the credit union that saw them through a difficult time.
Whether or not credit unions have changed the name of their collections departments to be more "member friendly," evaluating and adjusting the processes and tools in this department is essential to success in a troubled environment. These key objectives are in play for most credit unions:
Once objectives are set, the following best practices should be utilized for a credit union's collections department in this dynamic environment:
Collections will continue to be a challenge in the industry for some time to come. Focusing resources and analytical approaches can contribute to the long-term success of the credit union, in turn, better serving members. Collections is not a bad word in this economy, but, instead, is part of an overall member-focused repayment plan and fiscal responsibility task. Credit unions should pause and review methods to strengthen this area of business and better serve members going forward.
This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.
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April 27, 2009
7/26/2012 04:08 PM
Where are we with getting the collectors.
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