It's one thing to approve loans, it's another to bring that money back in. For credit unions that manage an in-house collections operation, we understand the impact that regulation and delinquencies can have on leadership. Credit union lending solutions should be seamless and efficient from start to payoff. Among all the logistics and bureaucracy that go into managing a collection operation, we're sharing the top three things that should be implemented to maintain an efficient and compliant collections operation.
This advice, provided by CUInsight, comes from a collections provider that has years of experience and they have narrowed down their suggestions to these top three areas of importance:
1. A Clear and Concise Policies and Procedures Manual
The first step in getting - and remaining - compliant with the regulations surrounding collections (i.e. TCPA, FDCPA, FCRA, UDAAP, etc.) is to ensure you have a well-documented, formalized policies and procedures manual. A well-defined manual gives your collections staff a guide and reference for the expectations and guidelines you have for them. It should be organized, repeatable, and easily accessible to all necessary personnel.
Your manual can serve as your verification to regulators—in the event that your operation ever gets audited—showing that you’ve implemented the appropriate policies to ensure your operation is following local, state, and federal regulations.
2. Call Monitoring Software
Now, admittedly, monitoring your collections calls is not something that is mandated by regulators. However, the burden is on you to ensure your agents are not violating your credit union procedures and policies, as well as state and federal guidelines, putting your credit union at risk. To this end, SWBC strongly suggests that you make call monitoring a part of your in-house collection operation. A policies and procedures manual is only as effective as the amount of proof that you can provide that your staff is in fact following said procedures. Call monitoring gives you proof that your policies and procedures are being followed. Likewise, it allows you to recognize situations when employees are not properly following the guidelines, so that you can address and correct any issues or potential violations.
3. Autodialing Technology
Depending on the size of your loan portfolio, your member demographics, and the amount of risk your organization takes on, you could benefit tremendously from an autodialer. An autodialer allows your staff to make multiple call attempts to every one attempt that would be made on a traditional phone. For example, on average, an autodialer can make upwards of 100 calls per hour, compared to 40 to 50 per hour, at best, on a manual phone. Autodialing technology gives your collection operation the ability to be far more efficient and effective than you would be in a manual environment.
Lending to your members should be seamless and fast, and it doesn't have to include multiple third-parties to make it happen. Additionally, you should have access to collection information from within your credit union data processing system. There are credit union core systems that do not require a third-party or collection tracking from a spreadsheet. This should include collection automation and management that can be used to support your policies and procedures.