Automation Helps CU Double Home Equity Loans

Register now

Home equity loan volume doubled in one year at a $25-million credit union here, thanks to an automated lending solution, according to Lisa Hansen, lending manager at First American FCU.

"Our loan turn-around time for processing and funding has been cut in half, down to one week, simply because of the lending tools," Hansen explained. "Turn-around used to take two weeks."

Faster loans have resulted in more loans, she continued.

"We were losing business because we weren't quick enough to get an approval," said Hansen. "With our manual process, a verbal approval took a day and a half. Now we can get it in 15 minutes."

The two-person loan department carries eight home equity loans representing $4 million, up from $3.4 million in 2005 and less than $2 million in 2004, Hansen said.

"Our board can't believe we've put that much on the books," she said.

"Even with just two employees in the loan department, we can carry the load," Hansen continued, adding that when loan officers are unavailable, members can apply online at the credit union website.

First American FCU started using the ARTA Lending Documentation System in 2002 for consumer loans, including auto, personal, consolidation, share secured and Visa credit card loans, as well as second trust deeds and home equity loans.

Provided by Wolters Kluwer Financial Services of St. Cloud, Minn., the Windows-based lending documentation software can automatically collect and transfer application data, generate ARM early disclosures and home equity early disclosures, pull credit reports, complete flood determinations, fulfill HMDA reporting functions, conduct HOEPA calculations, automate the decision process and populate and print closing documents.

Hansen said she no longer worries about loan compliance because the system automatically selects the appropriate documents for different loan types in each of the 40 states that the credit union serves.

"Now I know that every document I'm printing is in compliance, and it's quick to update the system with new documentation using a quarterly update disc," Hansen said. "We had a compliance audit last month and the auditor didn't have much to say about the loan documents.

"Previously, we were never sure if the forms and disclosures were up-to-date, and we always had to have someone check on it," she added.

Hansen is also able to complete second trust deeds "without being afraid I'm doing something wrong," she said.

The ARTA customer service desk takes Hansen step-by-step through the process of building the deed template, customized for any particular state, by automatically adding policies, early disclosures, applications and loan documents.

Even though ARTA is not yet interfaced to the credit union's new core processing system, Hansen said the third-party solution has more to offer than the automated lending platform provided by the core vendor.

"The core vendor's lending system is just no comparison to ARTA," she explained. "I have full confidence in ARTA's compliance features and the system is easy to use. The other system seemed random."


For info on this story:

* First American FCU at

* Wolters Kluwer Financial Services (formerly Bankers Systems) (c) 2006 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.

For reprint and licensing requests for this article, click here.