HARRISBURG, Penn. - With Pennsylvania the first state to mandate paperless vehicle titles for lien holders, one CU that shifted to the e-process 10 years ago wonders why some CUs waited until this year’s July 10 deadline to make the move, citing significant benefits from a program that may become a requirement in more states.
The $3.2-billion Pennsylvania State Employees CU says the Pennsylvania Department of Motor Vehicles Electronic Lien and Title system, or ELT, has saved the credit union time and money, and has reduced errors. “Our philosophy is to use technology whenever we can to automate a manual process,” said Patti Hockensmith, PSECU manager of consumer loan administration. “We currently have over 71,000 auto loans in our portfolio. Since the introduction of ELT in 1998, our auto loan volume has increased substantially. But we have not increased our personnel to manage title administration.”
The reason: ELT is simply more efficient than using paper, she said, adding, “we save a lot of keystrokes and we’re seeing a reduction in errors by having only one data entry point instead of three. There’s less chance of a person typing in a wrong name, address, or VIN number, and there’s a lot less time spent manually comparing title information with loan data for errors.”
Larry Highbloom, president of the Philadelphia-based VINtek, said the way it works is the CU goes online with a company like VINtek that provides an interface for financials to connect online with the DMV. The CU imports loan data into the interface, where it waits until the DMV sends in a title and the VIN numbers on the loan and title match up.
Once VINs “connect,” the CU is notified a title has come in, and the interface compares the loan data and title for discrepancies. When an error is spotted, such as last names that are not the same, the financial is alerted.
“So my job as a title clerk has changed and I don’t have to do those manual comparisons anymore,” Highbloom said. “Instead of opening all that mail with titles in them, I just look online at the ones that have problems and ignore the rest.”
Highbloom, whose company works with credit unions in all of the 14 states whose DMV offer ELT, said ELT and has allowed a number of the CUs to reduce staff to handle title administration and redeploy resources to areas of greater need.
While PSECU has not tracked savings from ELT, the value is clear, added Patrick Cosgrove, the CU’s director of credit services. In addition to time savings and error reduction, PSECU is not spending money on fireproof safes and storage space with titles kept electronically.
“We don’t have mailing costs once a lien is paid off,” Cosgrove said. “The title is sent to the member from the DMV. Members even get their title more quickly this way.” Cosgrove added that credit unions moving to ELT should explain to members that the CU no longer holds a paper title, “As some members still like to stop by in person to get their title,” he said.
The CU also reduces the chance it will have to pay a fee, often more than $60, for a duplicate title, if it loses a paper copy, Cosgrove said.
ELT is available in 14 states, how many DMV departments are considering making ELT a requirement for lenders? Highbloom said most states are taking a “wait-and-see approach,” watching Pennsylvania’s results. “It’s a big undertaking for the DMV,” Highbloom said. “They have to be ready to handle a very high volume of electronic transactions.”
According to Highbloom, Florida, Virginia, and California are showing the most interest in making ELT mandatory for lenders.
If a credit union changes to ELT, are there state compliance issues to meet and do staff undergo special training?
According PSECU and Highbloom, it’s a fairly simple process to institute.
“There are no compliance requirements from the state, and it’s somewhat like going from typing a letter to e-mail,” Highbloom offered. “Staff pick the system up fairly quickly, we have found.”(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
