One of the first things many credit unions may need to do when collecting on delinquent credit card accounts might be to resolve to simply start doing it.
"You would be surprised how many credit unions really don't apply concerted efforts to collecting on cards," said Karin Brown, vice president for collections at the Lending Solutions Consulting Inc., an Elgin, Ill.-based firm that specializes in helping credit unions streamline their loan programs.
Not putting a lot of resources into credit card collecting can seem logical, Brown added. When compared to banks, credit unions tend to use significantly more conservative underwriting on their credit cards and have lower delinquency and chargeoff rates, according to Brown. Credit card balances are also usually far lower than balances on car loans and mortgages. If a credit union believes it has limited staff for collections, it may make sense to put more resources toward the loans with the higher potential losses, she offered.
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