ORLANDO, Fla.–One of the panels that brought the most questions from Credit Union Times' conference attendees was CUNA Mutual's on non-interest income strategies and success stories.
Credit unions looking for a "truly a fee-based solution" might want to check out debt cancellation, an evolved version of credit insurance outlined by CUNA Mutual Lending Sales Specialist for National Accounts Terry Davis. "Debt cancellation offers great branding opportunities for your credit union," he said. "And because it's not regulated by the insurance commission, your employees don't have to be licensed to sell it." Ironically, he noted, the only state not permitting the product is Florida.
Davis said debt cancellation is a two-party loan protection contract between the lender and borrower in which the lender agrees to cancel or defer some or all of the debt if a specific life event occurs, such as disability or job loss. The credit union earns non-interest fee income from marking up the wholesale cost and charging the borrower a retail fee.
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USA Federal Credit Union CEO Tom Kane described himself as a debt cancellation "convert." He said the program "is a fee-income program you can tailor to your needs, which is what we did. We took a look at the margin, figured out what we should charge and started offering it to members." The credit unions had fee and other income to average assets well above its peers over the last few years.
CUNA Mutual Vice President of Consumer Segment Programs Heather Thiltgen added that insurance products not only bring non-interest income to the credit union but also deepen member relationships.
Jim Costello, executive vice president of NuUnion Credit Union, offers life, auto and home; accidental death and dismemberment; long-term care; and life insurance coverage through CUNA Mutual's MemberCONNECT. Costello said the product works for his credit union because "we really don't have to do much. The program provides the products directly to the members that they could get elsewhere, and we get the revenue."
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