Performance Leads CUs to New Risk Management Tools
At one point in time, risk management was not as pressing as other operational concerns for credit unions. With the changing lending landscape, however, it has become priority No. 1 for many, particularly with regulators calling for more stringent monitoring.
Mike James, chief operating officer of Lending Insights, the flagship brand of CU Direct Corp., a vehicle lending and sales solutions provider, said risk management is among the top concerns credit unions are seeking guidance on these days. With that in mind, the CUSO recently launched a new range of consulting services to help credit unions better understand their lending programs, establish essential policies and procedures to meet regulatory requirements, and help advance their programs and improve overall lending performance.
To help rebuild those ties, Lending Insight’s Lending Performance Management System aims to track performance and trends against a credit union’s goals, as well as provide branch management tools. The system also offers drill-down capabilities to assess performance by portfolio segments, and market intelligence tools to benchmark the credit union’s performance against other lenders.
James said if he had to pinpoint it, the biggest concern credit unions have lately is ensuring that they are in compliance with industry regulations. It’s critical to have an amiable relationship with the NCUA, state regulators and other oversight agencies, he pointed out. Static pool analysis and concentration risk, for instance, are two areas that have been front and center given the economic downturn and its recovery attempts, he said. So far, the feedback from regulators has been strong on CUSOs like CUDL that work to ensure everyone is on the same compliance page, James said he heard from a handful of credit union clients that recently underwent exams and all came back with glowing reports.