POUGHKEEPSIE, N.Y. - A new add-on to its core processing systemis allowing Hudson Valley Federal Credit Union to expand for thefirst time in 16 years the number of products for which members canreceive automatic line-of-credit (LOC) increases. The $1.8 billionCU is one of four of the 425 ULTRADATA users so far to deploy theAutomatic Line-of-Credit Increase & Solicitation Module thatwas part of the July update of the core platform from HarlandFinancial Solutions (HFS). Hudson Valley actually launched theservice in April for users of its unsecured LOC that also serves asoverdraft protection, says Gwenn Harnen, the CU's director ofconsumer lending. So far, 3,651 of the CU's 147,000 members havereceived the increases, which totaled $8 million. The outstandingbalances on the lines increased in three months by $1.5 million,compared with an increase of $400,000 in the same three months oflast year, Harnen says. The module provides about 40 controls forestablishing who gets the increases and how much, and then canproduce letters to notify members of the increase. Harnen says theCU opted to send the letters without an opt-out option, after theincrease was already granted, and less than 1% of the members toldthe CU they didn't want the increase. "In those few instances, wejust manually lowered the credit limit back to their originalamount," she says. Pamela Harris, product manager for HFS inPleasanton, Calif., says the application was created in response tocredit union customers who said they wanted "the ability toevaluate their existing loan portfolio and automatically andsystematically identity the best candidates for an increase onexisting loans and solicitation for a new line-of-credit loan."Hudson Valley was one of those. "Through our credit card processor,we have been able to periodically reward our credit-worthy memberswith automatic line increases on their credit cards," says Harnen,the CU's consumer lending director. "The last time we were able todo this on our other lines of credit was over 16 years ago." On thetechnical side, testing was the biggest issue faced in the productlaunch, Harnen says. "We maintain a separate test server that isupdated periodically with our live database," she says. "Thisenabled us to simulate the impact of the program in our liveenvironment and test as many different scenarios as needed."Testing in-house criteria, such as account history, was one thing.Testing credit and bankruptcy scoring from outside was another."This was more difficult to test as we could not pull live creditbureau information," Harnen says. "So we used Experian's testaccounts and manipulated the customer data field on the field sothat it coincided with a sampling of our selected membership database. This file was then posted to the accounts on our testserver." Satisfied, they then launched the service. "We worked veryclosely with Harland for over a year on the development of thisproduct," Harnen says. "The implementation went very smoothly." TheCU plans to periodically repeat the line increase and implement thesolicitation functions in the module on other loan products in thefuture, Harnen says. They'll have some choices. Harris at HFS saysthe application works "with all types of consumer loans, includingsignature loans, education, stock, secured and unsecured, creditcards and home equity." -


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