<p>By JIM RUBENSTEIN CU Times Southwest Correspondent GREENSBORO, N.C. – Like many credit unions in areas hit hard by the recession, the $90 million Summit Credit Union here has known for months it had a staffing problem in fielding so many financial counseling calls of its members. “We had one person on my staff who was on the phone all the time taking debt and budget counseling calls, but we needed her to handle some other duties,” observed David Gray, vice president of lending. At the suggestion of a CU in nearby Winston-Salem, Summit CU hired a San Francisco counseling service, called Balance, which in recent months has been doing a brisk business from CUs across the country in bankruptcy prevention and personal finance education. Balance, founded five years ago and which today has 70 CU clients using its phone hotline services, is owned by Consumer Credit Counseling of San Francisco, an agency which is a member of the nonprofit National Foundation for Credit Counseling, headquartered in Silver Spring, Md. On its Web site, however, Balance says that because CCCS is not in its name, there is less of a “stigma” in CU members being referred to the firm. Indeed, many of Balance’s newest CU clients maintain they like the service because members feel comfortable talking to counselors at a distance rather than going through the face-to-face appointment procedure. “We really don’t like to put our members through that whole CCCS process of phones not getting answered or being put on hold for long periods to set up interviews,” contends Susan Blecha, senior collector at Anheuser-Busch Employees Credit Union in St. Louis. United Airlines Employees Credit Union in Elk Grove Village, Ill., which signed up with Balance in October, said it “never refers its members” to CCCS because of various problems over fee and payroll schedules which can put members in difficult situations with creditors when cycles are missed, explained Dona Svehla, supervisor of collections, titles and fraud. Other new signups for Balance include Digital Federal Credit Union, Marlborough, Mass. and Boeing Employees Credit Union, Seattle. Some of the biggest CU boosters of Balance say the program is definitely a factor in helping to reduce delinquency ratios and charge-offs. “Over five years, I’d say we’ve had 650 people go through Balance representing about $4.2 million in loans and we’ve had payoffs of $2.3 million, with our losses at 12%,” said Rob Lajoie, vice president of lending at the $435 million San Mateo Credit Union, in California, “Remember these are high risk members, and so without Balance, we would have had losses at 35-50%.” Lajoie said San Mateo CU currently has 250 members on Balance with balances of $1 million, or 0.5% of its portfolio. Also a strong booster of Balance has been the $8 billion State Employees’ Credit Union of Raleigh, which said the program has been “a great tool for us” in keeping a lid on bankruptcies. “Too many of us give lip service to the idea of really helping our members,” opined James C. Blaine, SECU’s president and CEO, on credit unions’ attitude on debt assistance. “Sometimes we simply tell them to go away for six months,” but come back later. While North Carolina CCCS has been useful in some areas, some offices are “limited in staff” or are not conveniently located to out-of-state State Employee members, said Blaine. A spokesman for the National Foundation in Maryland acknowledged that not all of its 1,300 CCCS members perform the same way or retain for-profit subsidiaries like CCCS’ Balance. There can be a “lack of consistency” said the spokesman. David Gray of Summit CU in Greensboro says that so far the Balance hotline program, which the CU joined last fall, has solved its most pressing personnel problem for his four-member lending team. The freed up employee can now devote time to insurance matters and other services. Balance says it provides weekly and monthly reports to CUs enabling them “to stay on top of activity and take action with past-due members who do not follow-up on your referral or who choose not to begin a debt management plan.” A major benefit of Balance, say users, are the hours it is available: six days a week (excluding Sunday) with 15 hour days. “No need for your credit union to maintain credit counselors on staff,” says Balance, noting also that “priority appointments mean less opportunity for your past-due member to call a bankruptcy attorney during the normal one-to three week wait for an appointment at other CCCS offices.” – [email protected]</p>

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