The concept is to not only grow loans, but cultivate membership as well.
By Roy Urrico
CU Lending Cooperative announces a major lending program. A new San Diego-based CUSO called CU Lending Cooperative aims to provide credit unions with a national presence in major online lending programs, the first of which will be LendingTree. The way the loan production platform works is when someone applies for a personal loan on LendingTree, CULC software grabs the application and qualifies the person. Then in seconds, the software checks to see what member credit union matches and presents an offer. The concept is to not only grow loans, but cultivate membership as well. When it funds, the loan deposits into a share account at that credit union. The new member can access the money by signing up for online banking or waiting for their debit card.
CULC founder Michael Joplin, who also serves as president/CEO of CU Revest, an asset management CUSO formed in 2013, explained CULC utilizes empirical data gleaned from about seven-eight years of observing how marketplace lending behaves when they are not credit union people.
During the initial loan process, the applicant comes through the CULC system as a semi qualified lead to the CUSO’s decision engine via an API. Joplin said, “We use lots of non-FCRA information to pre-qualify the individual because LendingTree has already done a soft pull. We take the basic outline of the individual and then fill in the blanks.”
Joplin said within a second and a half they determine whether that person goes to the next step in which the CULC decision-engine produces a loan quote passed back to LendingTree via API. The quote instantly pops up on the searcher’s screen with a welcoming note and description of the nationwide cooperative group of credit unions, which are not-for-profit organizations.
CULC geolocates the person and forwards their application to the nearest CUSO member credit union. Because the big challenge for credit unions is converting indirect loans into an active member, after the loan documents receives approval, a button appears to the signer offering them a lower interest rate if they agree to an instant balance transfer from their existing financial institution.
The lending CUSO chose to open with LendingTree but is still searching for other partners. “Some of the credit bureaus, which shall remain nameless, are very much interested in becoming lead generators for CULC,” Joplin admitted.
CULC is a separate entity from its sister CUSO CU Revest, which it uses as part of the ecosystem for which they originate and service loans as well as provide a backup service.
CU Revest takes on defaulted off-balance sheet and chargeoff assets from credit unions after collection agencies have had their way with the members, Joplin explained. “We then have a rehabilitation program and a track and strategy that brings the members back to the credit unions and recovers the lost capital because of nonpayment of the debt.”
Joplin, who describes himself as a banker by trade reformed to the credit union movement, said the CU Revest model replaces any form of debt selling, debt buying or debt buyers, which are purchasing member accounts, outside of the credit union space, Joplin said, “We don’t believe that’s really the credit union way and we don’t think that those members have the ability or right to come back to a credit union after they’ve paid what they owe.”
Under its umbrella CU Revest totals about 85 credit unions. “We generate about $500,000 a month in cash collections from that half billion in paper.,” Joplin maintained.
The CURevest model used predictive analytics garnered from 21 years’ worth of tracking recoveries on a chargeoff accounts of all types. “We’ve had debt buying experience going back to the late eighties when we were buying assets as a management team from the RTC (Resolution Trust Corporation) and the FDIC,” Joplin noted.
Joplin found the credit union movement needed something like a CUSO that would step forward and monetize the off-balance sheet assets. “There are billions of dollars of assets like that in the credit union movement now that need to be monetized.”
Read the full article online at CUTimes.com.
Mike Joplin has over 35 years experience in commercial banking and consumer finance. As a founder, co-founder and CEO he has created and managed several successful companies and has founded two thrifts and an independent bank.