SYRACUSE, N.Y.-The nearly 10% increase in consumer loan volume at Empower FCU this year was made possible by electronic documents and signatures over the web.
"When we went from open-end to closed-end lending at the end of last year, we knew there would be two or three process gaps we never could have humanly filled," explained Mark Baker, VP-loan operations at the $1-billion CU here.
"We had to start generating a closed-end set of documents for most loans," he continued. "If we were actually printing hard copies of everything, our paperwork probably would have quadrupled."
Instead, all consumer lending documents, barring home equity, can be presented electronically using data pulled from the core system, said Rebecca LeBlanc, Empower VP-IT and project management. And 50% of those documents are signed electronically.
Empower's secure electronic presentment and signatures are enabled by technology from Linden, N.J.-based Integrated Media Management (IMM).
"Electronic signatures have been incredible for members," said Kevin Peterson, VP-consumer lending at Empower. "They no longer have to sign two or three times on each document. Our members are spread across the East Coast, but they no longer have to leave home to sign loan documents."
Some Still Like Paper
Not all docs are signed electronically: some members and staff still like to sign on paper; sometimes a signature device doesn't work; or sometimes a lender has too many closings scheduled at the same time and has to print documents to allow members to sign them in a staging area, Peterson said.
Were it not for electronic document presentment and signing, staff would have to route each piece of paper manually, between one another and the borrower. Then each piece would need to be manually scanned, indexed and archived.
And with centralized booking and underwriting but distributed origination, the process becomes all the more cumbersome, Baker added.
With such a complex and extensive process, "we knew we had to move and sign electronic documents and archive them automatically," he said. "We had to become more efficient because we had to close more loans to drive the business."
Documents are automatically indexed and archived to the CU's imaging system, resulting in newfound accuracy, LeBlanc suggested. "When we look in the imaging system, we see all kinds of errors in the index for manually indexed documents. We don't see those errors for the newer, automatically indexed items."
And sometimes documents seemed to disappear from the imaging system because they were improperly indexed, added Peterson.
Some Bumps
Empower experienced some bumps as it deployed electronic presentment and signatures, Baker said. For example, each loan officer has to have suitable signature equipment at their desk, and it has to work properly all the time. "Otherwise, the officers get discouraged and will print the documents for signature."
In addition to signature pads, Empower recently began using Apple iPads to capture signatures.
And during an e-signature testing phase, the CU discovered that some documents lacked tags that trigger signatures. "The document would appear with nothing to sign," he said. "So we had IMM fix the tags."
Despite Empower Federal Credit Union's success with moving to a paperless environment, a river of paper still flows through the organization, mainly from mortgages and home equity loans, which are about 25% of the CU's documents, Baker said. "The legalities of mortgages have prevented us from going paperless."
Teller receipts and official checks are electronic, as are core processing reports and member enrollment, ACH, wire, IRA and HSA paperwork. Soon, Empower FCU will capture check images at the teller station using IMM technology.
