Technology May Be the Cure for MFOEL Migraines
Cloud-based computing and e-signatures are the aspirin to the multi-featured open ended lending headache credit unions have been suffering from since the NCUA first issued the rules back in 2009, said John Levy, executive vice president and co-founder for Integrated Media Management, a Linden, N.J.-based technology vendor.
According to a supervisory letter the NCUA released in July, credit unions can take a blended approach to multi-featured lending, retaining the open ended option of occasionally or routinely verifying a member’s credit standing still qualifies him or her for the current revolving credit limit. When a member requests a single-disbursement, non-replenishing closed-end sub-account, the credit union can pull fresh credit reports and confirm a members’ financial status, but must also provide the required disclosures.
Dan Murray, vice president of lending products for CUNA Mutual Group, agreed that technology is a good answer to the question of how to comply with a mix of providing both open ended and close ended loans. The company announced on Aug. 21 it had partnered with DocuSign, an e-signature provider to provide secure electronic signature solutions to credit unions so they can speed up the lending process and provide options for MFOEL.
According to CUNA Mutual, the partnership will help credit unions close loans faster so they can earn interest sooner, eliminate missing or incomplete documents and meet compliance requirements, all while improving member service.