MADISON, Wis. — The current economic climate is only putting more pressure on credit union boards and management teams to have a clear, consistent philosophy toward collections. That includes integrating the function with other credit union departments, according to a new white paper issued by the CUNA Lending Council.
According to Dana Rawlings, SVP and COO at Smart Financial CU, Houston, and membership committee chair for the CUNA Lending Council, collections processes should be comprehensive, well documented and understood by staff, and customized to each credit union's market and membership. That's because, Rawlings said, while collections basics are standard, there's infinite variety in the details.
Philosophically, some credit unions focus on helping members while others concentrate on controlling numbers - their delinquency and charge-off rates. Rawlings believes strongly the collections function's objective should echo the credit union philosophy of people helping people: The goal must be to help members improve their financial situations. "If you're just working toward specific numbers, how can you be objective about doing everything you can to help members?" he asked.
The white paper was authored by Judy Dahl, a writer and editor specializing in business, credit unions and technology.
