Secure links to an FTP site are helping a young CUSO handle $1.5 million to $2 million a day in approved applications for student loans that credit unions can then keep on their own books.
The CUSO is Credit Union Student Choice, a Washington, D.C.-based turnkey lending operation for credit unions and college students.
CUSC booked about $30 million in loans last year for about 15 credit unions, a number that has jumped to 73 this year, with 10 more under contract, according to Mike Weber, CUSC's vice president of marketing.
During its first year, CUSC e-mailed encrypted reports and other documents to its credit union customers, a manual process that has now been replaced by a customer communications center operated by DigitalMailer of Herndon, Va.
DigitalMailer, itself a CUSO, provides CUSC's credit unions with secure links to an FTP site where they can access daily portfolio reports and other archived information.
"It's kind of like, 'You've got mail,'" Weber said. "Our system generates e-mail alerts when the new reports are there, and they simply access that secure FTP site and there they are."
"This kind of access is very important to our ability to work with our vendor-partners to deliver our turnkey approach to credit unions. Since the loan isn't technically sitting on their core operating systems, it's very important that we have good reporting capability so the credit unions are fully aware of all activity."
"That's critical to the credit unions for a lot of reasons, including helping them fund loans with appropriate timing, and it adds to their operational efficiencies. And right now is prime college lending season, so we're really busy."
Michelle Pezzulli agreed.
"With our client list growing quickly, the reporting process was becoming very labor-intensive, and it was very apparent we needed a better solution," said CUSC's vice president of operations.
"DigitalMailer's secure communication center has provided that solution, automating the process and saving a lot of time, which translates into significant cost savings that we can pass along to our credit unions," she said.
Ron Daly, founder of e-statement pioneer DigitalMailer, said CUSC is the first CUSO to use his company's communication center, originally created to give members of DigitalMailer's approximately 160 credit union customers "one-stop access to all their account statements, daily notices and other information online."
He added, "Now we're seeing interest for other CUSOs because it's a simple, secure way for them to get information into the hands of their own clients. If you have daily workflow that involves delivering reports across the Internet, the opportunity is here to park it and have your partners come look at it, rather than figure ways to send it out there and keep it secure."
Weber at CUSC added, "The security aspect is of huge importance to us. The fact that it's a secure mailbox where they can pick up data made doing this almost a no-brainer for us. DigitalMailer has nice technology that fits in well with what we're trying to do."
A long-term goal, Weber said, is for CUSC to be able to communicate electronically with the various core processing systems used by credit unions. The loans, while held and serviced by the credit unions, don't currently reside on their holders' host systems.
"There are quite a variety of core systems out there, and it can be hard to create something that necessarily will work for everybody," Weber said. "That's kind of on our priority list. We think the technology is there. It's just a matter of finding the time to get it all figured out."
Maybe the CUSO can draw on the brainpower of the six top-shelf graduate schools that are developing their own customized lending programs with local credit unions-including a few of CUSC's owner credit unions-as they join the undergraduate-dominated ranks of CUSC clients.
They include the Sloan School of Management at Massachusetts Institute of Technology, the Wharton School at the University of Pennsylvania, the Darden School of Business at the University of Virginia and business and other graduate programs at Harvard, Stanford and Emory universities, Weber said.
The CUSO's owners, meanwhile, are the $8.7 billion BECU of Tukwila, Wash.; the $1.4 billion Affinity Plus FCU of St. Paul, Minn.; the $4.2 billion Digital CU of Marlborough, Mass.; the $837 million NuUnion CU of Lansing, Mich.; the $913 million Eli Lilly FCU of Indianapolis; the $1 billion NASA FCU of Upper Marlboro, Md.; the $2.8 billion San Antonio FCU; the $4.6 billion Star One CU in Sunnyvale, Calif.; the $1.6 billion Wright-Patt FCU in Fairborn, Ohio; the $242 million MIT FCU in Cambridge, Mass.; the $5.8 billion Suncoast Schools FCU in Tampa, Fla.; Callahan & Associates; Callahan Credit Union Financial Services; and PSCU Financial Services.
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