ORLANDO, Fla. – Credit unions must reinvent their collections procedures to match the current economic conditions or risk seeing their losses climb sharply, according to a collections executive and consultant.
"The bottom line is that you will not be able to do collections the same way you did them ten years ago, five years ago or last year," Karin Brown, vice president for collections for Lending Solutions Incorporated, a nationwide CU consultant.
Brown urged credit union card executives attending a card management school offered by Card Analysis Solutions to work with their credit bureau processors to identify member behavior which indicates a member is in financial trouble even when they are not late on any credit union cards.
"How many people in the room have had bankruptcies from members who have never been late on any of your payments," Brown asked, as a number of hands shot up.
Brown advocated finding out early when a member is financially stressed so that the CU can step in with offers to help by restructuring loans, reorganizing payments and other measures before a member becomes even a little bit delinquent-and certainly if the member has actually started having late or missed payments.
"Collections is a sales position," Brown said. "Credit unions need to start seeing it as such."
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