Skip to main content

Best Practices for Managing Delinquency in Uncertain Times



Source: Wendy Elieff, SVP, Client Service and Marketing, CU Recovery & The Loan Service Center
Now more than ever, the credit union philosophy of “people helping people” is critical to maintaining member loyalty and trust in their biggest time of need. While the COVID-19 pandemic has left us all experiencing disruption and uncertainty, credit unions are in a unique position to provide members with financial reassurance and support in navigating our new reality.
By employing some of these best practices for successful delinquency management, you can help your credit union build strong member relationships, both during this crisis and in the long term.
Prepare an Action Plan
Credit unions must first develop a crisis management strategy or response plan. Credit union leaders should begin by asking themselves the following questions:
  • What will our approach be regarding fee reversals, payment deferments, workout loans, etc.?
  • How much risk are we willing to take?
  • If we offer deferments for payments, how many months should they be deferred?
  • Are there other ways we can assist our members?
  • What regulations are we concerned with?
Maintain Effective Member Communication
Reinforce to members that your credit union is a trusted resource throughout this crisis by frequently providing helpful information and important updates that are easily accessible and digestible. Create a dedicated support page on your website and utilize all of your credit union’s communication channels (including email, social media, text messaging, push notifications, etc.) to direct your members to learn about available relief programs and ways they can request help.
When creating and implementing your external communications plan, consider various audiences and their relationship with your organization to tailor your information, as well as any compliance requirements.
Additionally, be proactive in offering financial counseling services to your members, and contact those who may be heading into delinquency. Be clear about the financial options that are available to them. When speaking with members over the phone, ask your staff to open conversations with, “How can we help you get through this?” and not “Here’s what we’ve got.” Actively listen to what they say, empathize with their concerns and communicate a plan based on the information provided. Showing your gratitude and appreciation for their loyalty and trust can also go a long way.
Now is the time for strong leadership, with less focus on process-driven decision-making by committee. In light of the unique circumstances, credit unions should make their C-level executives accessible to everyone – including customers, clients, and members.
Leverage Vendor Relationships
Reach out to your vendor partners to inquire about any hardship extension programs your credit union could implement at this time, including system settings, fee waivers, etc. Explore ways in which you can work together with your partners to assist your credit union and members.
Extraordinary times call for extraordinary measures, and your members are counting on your credit union more than usual. By delivering a high level of personal service and care, you can help ease your members’ financial strain and nurture thriving relationships into the future.
Wendy Elieff oversees the success of the Client Service and Marketing teams in CU Recovery and The Loan Service Center, a PSCU subsidiary. Wendy has worked for CU Recovery for the past 20 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness. She is also responsible for building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.

Some Helpful Links





Comments

Popular posts from this blog

NCOFCU Newsletter

The Bucket Coach is a financial advice book designed by Fire Services Credit Union, Tronto, Canada. and written exclusively for Fire Fighters It's a practical guide for household financial management, including investments, credit and mortgages, and retirement. Developed with contributions from Fire Fighters," NCOFCU Newsletter : " Kevin Connolly Chief Executive Officer    Fire Services Credit Union Phone: 416-440-1294 ext 301  Toll Free: 1-866-833-3285 E-mail:  kevin@firecreditunion.ca 1997 Avenue Rd Toronto, ON M5M 4A3 

CUNorthwest Todd A. Powell Award is SFCU CEO Gayle Furness.

Spokane Firefighters Credit Union Big Enough to Serve. Small Enough to Care. This year’s recipient of the CUNorthwest Todd A. Powell Award is SFCU CEO Gayle Furness. Like Todd, Gayle has been instrumental in the growth, as well as the safety and soundness, of the credit union. Congrats to Gayle for living up to the standard that Todd created for our organization and the greater credit union community. __ ________________________________ Check out NCOFCU's additional features: First Responder Credit Union Academy Podcasts YouTube Mini's Blog Job Board

The Shrinking Pool of Small Credit Unions: Why It Matters & What We Can Do About It. - Henry Meier, Esq.

  Henry Meier, Esq. Henry Meier is the former General Counsel of the New York Credit Union Association, where he authored the popular New York State of Mind blog. He now provides legal advice to credit unions on a broad range of legal, regulatory and legislative issues. He can be reached at (518) 223-5126 or via email at  henrymeieresq@outlook.com . For as long as I’ve been around the industry, I’ve heard concerns about the demise of the small credit union. But I’ve come to realize it’s a lot like the weather: Everyone talks about it, but no one does anything about it. This is unfortunate. We need credit unions of all shapes and sizes to survive, and if we don’t take action soon, it will be too late.  Fortunately, there are steps the industry can take to potentially decrease the rate at which small credit unions are disappearing by making it viable for credit unions to survive by getting larger credit unions interested in making the necessary investments to keep the sma...

What Are Your Plans -As Government Shutdown Continues, Credit Unions Expand Offers of Assistance

BILOXI, Miss.— With the federal government shutdown now entering its second week, an increasing number of credit unions across the country are offering relief and financial assistance. All indications are the shutdown is no closer to ending than it has been since it began on Oct. 1. While the House has passsed a continuing resolution (CR) to fund government operations in the short term, the Senate remains at an impasse, even as it has scheduled a vote for today. In addition to the earlier assistance reported by the CU Daily  here , the latest pledges to support members include: • In Biloxi, Miss., Keesler FCU said it is offering paycheck relief for all eligible federal employees affected by the shutdown and will advance the amount of direct deposit paychecks for eligible members during the shutdown for up to 90 days. There is no cost or fee to enroll in the program. • In Nebraska, Cobalt Credit Union is offering furloughed members loans of up to $5,000 with no fees or interest...

Sunday Reading - FIRE, 101 - “financial independence, retire early,”

  Retiring at 30     FIRE, 101 Most US workers aim to retire around age 65—but for many followers of the FIRE movement, which stands for “ financial independence, retire early ,” that’s not the case. FIRE followers, who range from low- to high-income workers, typically prioritize high savings rates, relatively frugal living, and aggressive investing strategies in an effort to work less and enjoy life more in the long-term ( see five distinct approaches ). While many proponents argue that the movement is more of a mindset about achieving financial freedom than any ...