AUSTIN, Texas-Imagine a lending program so decentralized and "disjointed" that a member could walk into one CU facility and be denied, then simply go to another and be approved.
That was the problem Amplify FCU sought to fix, and in the process created a new Best Practice.
"A few years ago, our loan origination system was incorporated in the host and a bit antiquated to say the least," said Pierre Cardenas, Amplify's SVP of retail. "We were a very traditional credit union. We had loan officers who were processing their own work; we didn't have Internet automatic approval. It was a very old-fashioned way of doing business-the way you would do it in the 1980s and I always say the only good thing about the '80s was the music. We were just hugely inefficient."
So the $465-million CU undertook a massive change and embraced multiple loan channels, including the Internet as well as the DealerTrack and RouteOne lending networks, which gave it better opportunities for growth in loan volume. Prior to the big change, Amplify's loan origination system did not have automatic decisioning capability and the credit union did not have an indirect lending program at all.
Amplify signed on with Teres Solutions, implementing the company's SAIL platform to integrate the lending into Amplify's core system. Today, instead of wildly inconsistent lending practices, up to half of the CU's loan applications are approved without the need for staff review.
In the past, when loan application volume increased, Amplify would simply throw more bodies at the problem and train a huge number of loan officers to process the applications. Now, origination and processing are totally separated leaving the sales personnel to take care of business in the front while just a handful of loan officers take care of the underwriting for any application that is not approved by the automated system.
"We were able to split that and remove the processing from the front to the back office," said Cardenas. "Now the people who are detaile oriented are putting the packages together. You take a loan application and break it into its components and move that through an assembly line and move it through the process. Overnight the efficiency level just took off."
Teres Solutions' CEO Tim Kelly lauded Amplify's productivity gains, emphasizing that the credit union has found inventive ways to stretch SAIL to its limits and get the maximum usage out of the product.
"They use the software very well, they use all aspect and features of the software," he said. That efficiency is especially needed in the current economic malaise.
"In times like these, credit being tight, there are going to be more denials," Kelly pointed out, adding credit unions have to "look at more loans with the same amount of people" to keep their loan volume up and crafting a hyper efficient loan origination and approval system is key to doing just that.
BEST PRACTICES
Amplify FCU, Austin, Texas.
Category: Lending Program
Provider: Teres Solutions
