No More “Wild West” in Loan Recapture

Loan recapture requires standards that assure all loans benefit both the institution and the member.


Go where the money is might be a popular philosophy, but it’s one easier said than done. Loan growth year-over-year down 0.70% as of second quarter 2010, but skillfully rendered recapture campaigns can encourage members to bring their outside loans to your credit union and save money in the process.

Whether you rely on outbound calling, direct mailing, email messaging, text offerings, or in-branch marketing, ask yourself:

1) Are you looking to bring in new members along with new loans or will you focus on cross-selling your existing membership? Mike Akers, director of sales for City County Credit Union ($279M, Ft. Lauderdale, FL), says the most significant ROI usually comes from internal marketing to existing membership. And remember, as much as 73% of cross-selling occurs within the first 90 days of membership, according to the direct marketing services company Harte-Hanks.

 2) What’s your appetite for risk with acquired loans, and who will you target? “Do you want to exclude members with ARMs? Do you care about reset dates?” asks Susan Hackett, a senior account executive for Experian. The more you define your recapture parameters, the more likely you are to reach your goals.

3) Marketing Customer Information File (MCIF) systems are a popular option for targeting specific segments of your membership (such as certain credit brackets or members without an auto loan at your institution) and can help guarantee the marketing materials you do send out reach those with the greatest chance of responding. Hudson Valley Federal Credit Union ($2.9B, Poughkeepsie, NY) utilized MCIF to target its 25,000 direct mailings, which was part of a campaign that resulted in a 51% growth in originations, according to Callahan’s Peer-To-Peer Software.

4) What internal resources do you already have? Does your staff have the capabilities to make outbound contact? Do you have an “approved, but not funded” list? “Within the industry, it’s not uncommon to have up to 60% of the applications to a credit union approved but funded at another institution,” Hackett says. Direct mailings and targeted outreach to this group can yield substantial results.