Manning's Responsible Debt-Relief Algorithm Under NCUA Review
"It's a slam dunk for credit unions," Manning said. "The program is well-designed in terms of algorithmic verification for auditors and concluding information regarding the fiduciary interest of the institution."
The algorithm is a better risk indicator than credit scores in a bust market, he said, because it tests a household's shock exposure to rising debt payments or lowered income, similar to the way financial managers shock test portfolios for interest rate risk.
Manning said Vice Chairman Rodney Hood, who hosted the risk summit, is "very enthusiastic" about the program, which includes borrower analysis software the Rochester, N.Y.-based researcher said he'll allow credit unions with less than $10 million in assets to use for free.
Cherie Umbel, NCUA spokeswoman, said, "Vice Chairman Hood is a proponent of proactive credit union lending, and he strongly supports effective enterprise risk management programs."
She added that the vice chairman encourages eligible credit unions to take part in Manning's pilot program, which will be implemented later this year by the California/Nevada Credit Union Leagues.
Manning's responsible debt relief program is popping up in other venues, including the American Debt Relief Challenge, a collaborative effort by four industry consultants that aims to save Americans $300 million in credit card interest by transferring balances to credit unions.
Strategic planning consultant Jamie Chase leads the challenge and said Manning is consulting with participating credit unions to provide additional expertise regarding the health of their credit card portfolios and underwriting methodology.
"What Manning provides is a national independent source of expertise that CNN and NPR are already tapping on a weekly basis," Chase said.
Manning, a Filene Research fellow, also recently completed a white paper for the think tank, prepared for the Michigan Credit Union League to study the factors contributing to the state's foreclosure statistics and suggest policy changes to effectively address the issue.
Manning's algorithm is also under consideration by consumer credit counseling organizations and major credit card issuers. He said he was recently invited to present his program at a recovery roundtable event next month in Orlando called by the nation's top 20 banks.
He said Citibank, who issued him the invitation, told him "they consider this the most promising debt collection innovation out there."