Credit Unions Continue to Assist Members in Troubled Times

While delinquencies and charge-offs are rising, credit unions continue to help their communities by modifying mortgages for strapped borrowers.

 
 

At the end of the second quarter, total credit union delinquency was 0.97 percent. This industry delinquency rate remains manageable. Annualized net charge-offs, 0.69 percent at June 30, rose only 3 basis points over the previous quarter. By contrast, the aggregate data for all FDIC-insured institutions indicates continuing problems. Total delinquency for FDIC-insured institutions reached 2.04 percent and annualized net charge-offs rose to 1.16 percent.

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Credit unions participating in Callahan & Associates’ First Look program have reported that they have modified 1,905 real estate loans for a total of $409M modified real estate loans outstanding. The new account codes, added for the 3Q data cycle, will assist credit union industry leaders in modifying members’ loans. Individual credit unions, though, have been achieving success in a variety of ways prior to reporting requirements.

Credit Unions Continue to Help Members
Earlier this year, Ent Federal Credit Union decided to reposition their collections department as the Member Solutions Group. This team was charged with proactively reaching out to members who show early signs of potential loan payment challenges and begin a dialogue with them.

The department makes calls to members who are as little as seven days past due to try to figure out how they can assist them. In addition to the outgoing calls, Ent also opens the invitation for any member to call or email the department if they are having trouble making their loan payments. They advertise the department with a quick blurb on their website saying, "Are you having trouble making your Ent mortgage or vehicle payments? We can help." Ent has found that offering the option to talk to a representative by phone or email has helped members open up about their financial worries.  The hotline is receiving about 300 calls each month.

The Member Solutions Group has already made a positive impact. Since the program was implemented in March, Ent has put together workouts for 180 consumer loans and six first mortgage loans. A local newspaper featured Ent's Member Solution Group and how they were able to work with a member to help him avoid foreclosure. Not only is the program helping Ent's member base, but it has also kept the credit unions delinquency rate low. Only 0.60 percent of the credit unions' $1.79 billion loan portfolio is two months or more delinquent.

How are you helping members through difficult times? Post your comments below or email the author.

 

 

 

Nov. 17, 2008


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