For nearly a decade, Mountain America Credit Union ($4.6B, West Jordan, UT) has taken an approach to loan recapture that helps employees and borrowers alike understand the long-term impact of refinancing a high-priced loan at a lower rate or a shorter term.
Referred to internally as “rescue loans,” both the balances and the resulting savings from these efforts grow every year, says Nathan Anderson, the credit union’s executive vice president and chief operating officer. Year-to-date in 2015 alone, Mountain America has saved its members more than $35 million in interest.
From Sell To Save
Anderson began his career in consumer products before joining the credit union in 2004 to oversee its sales activity. Upon arrival, he found that although Mountain America staff members excelled in friendliness, they also had some misconceptions about the best ways to add value to a member’s financial life.
CU QUICK FACTS
Mountain America Credit Union
Data as of 03.31.15
HQ: West Jordan, UT
12-MO SHARE GROWTH: 14.18%
12-MO LOAN GROWTH: 26.30%
“The idea of good service had become synonymous with smiling and calling people by name, thanking them for coming in, and then sending them on their way,” Anderson says.
The credit union needed to refocus to prioritize member need, expand sales ownership, and give employees a methodology to broach the topic of loans held outside the institution.
“If a member has secured their loan elsewhere, we can’t unwind that decision,” Anderson says. “But we can still see if we can save them money by refinancing with us.”
To uncover opportunities, Mountain America implemented a three-step AAA process: assess the member’s needs, advise them of their options, and assist them with their choice.
People don’t care if they can take their rate from 10% to 8%, they care if they can take their monthly payment from $400 to $280.
The Tools Of The Trade
One important part of the rescue loan program is the credit union’s internally built Value Analyzer tool.
Fully integrated with the credit union’s Symitar core, the system allows any employee to easily and almost instantaneously determine the per month and total dollar amount a member could save were they to refinance an outside loan with the credit union.
Employees can also determine the potential reduction in the time it would take to repay a loan if the member used those monthly savings to make additional payments.
“It’s all about speaking the same language as your members,” Anderson says. “People don’t care if they can take their rate from 10% to 8%, they care if they can take their monthly payment from $400 to $280 or can pay off their loan sooner than they had planned.”
Lastly, this tool helps maintain a running tally for both the projected dollars members saved as well as the total loan balances Mountain American rescued. The credit union tracks this monthly by branch and employee.
“This is a shared effort across the organization, so it’s important everyone be able to identify and bring in these loans,” Anderson says. “The system may help, but it’s still up to every employee to listen and look for opportunities or pull up a credit report so they can start the conversation.”
A Lasting Legacy
Every year, Mountain America employees get better at identifying needs and reaching out, Anderson says.
“This year, our top-performing branch rescued $8 million worth of loans through July,” he says. “We’re constantly getting rescue loan stories from different departments, so it’s clear this program helps our people to love what they do.”
Another reason support continues to steadily swell is because the credit union has distinctly identified rescue loans as a cultural foundation rather than a one-off campaign or a flavor-of-the-month promotion.
“This isn’t an either/or approach; it’s an important supplement,”Anderson says.“We still use information from credit bureaus to target direct mail campaigns and originate new loans in many other ways. This approach ensures our portfolio diversifies and grows in many different areas, not just a few.”