Posted by Ryan Schweizer, New Business Manager , OneDigital Health and Benefits on 7/11/2019

Have you ever facilitated a meeting with your team and asked for questions and comments about their thoughts… only to hear crickets chirping? Participation in these sessions is so important to gain valuable feedback and provide clarity around your objectives and goals.

If you are searching for advice on how to encourage your team to speak up, here are five tips that may help.

1) Start by asking a more direct question

It’s easy to get no response when you ask something like, “Does anyone have any questions or comments?” Instead, directly ask someone a question that requires more than a YES/NO answer: “What is the thing that made the most [or least] sense in this plan.” OR “What is one thing we could do to take this one step further?” Direct it to several individuals.

2) Appreciate initiative to ask the question, not just the question

Sometimes all it takes to open up a healthy discussion is one simple question. Appreciate the person who got the ball rolling. By acknowledging and appreciating the interest shown by your team, you reveal that their question matters. This will also help provide an atmosphere where they will feel compelled to bring up other questions that highlight some of the ideas or concerns they might have.

3) Don’t get thrown by an awkward or difficult question

It’s okay if you don’t have all the answers. In fact, not knowing the answer can be the beginning of a fantastic team discussion to solicit others' thoughts and opinions. Be honest and approach the discussion in the same spirit with which you wanted your own questions answered.

4) Encourage innovation - #Freshthinking

No question or idea is a stupid one. Even if the question provokes a few laughs, I’m sure there is at least one person in the room that is SO relieved that the question was asked. Or, if it’s an idea that’s outside the box, take time to seriously consider it. Even if it’s not a winning idea, it will open the door for others to contribute.

5) Lead by example

Sometimes we expect our leaders to have all the answers – that’s a common perception. If you take the time to talk to your team and ask them about their opinions and then demonstrate that you are taking that feedback seriously, you will begin to create a more open culture.

By creating an environment of curiosity and open dialog to gain unique insights and understandings, your business can continue to be a leader in the industry.

Categories: Business Partners, Education & Training, Employment & Staffing, Human Resources, Sales & Service, Strategic Planning & Consulting
Posted by Sarina Freedland, Senior Investment Officer, Catalyst Corporate FCU on 6/27/2019

2019 began where 2018 left off…waiting for a resolution to the growing trade dispute with China and wondering what the next interest rate move would be. The Federal Reserve closed out 2018 with a 25 basis point rate hike that became hotly debated as soon as it was executed. We rolled into 2019 in the midst of what would become the longest government shutdown in history. From the beginning, it seemed the odds were stacked against the economy, even as we came off the best growth in 13 years.  The one shining spot was a turnaround in the stock market, easily reaching new highs month-after-month. Conversely, bond yields began to move lower as the “R word” – recession – began to be tossed around. The unknowns that started the year are still in force as we approach the mid-point.

THE CONCERNS

Trade was front and center just about every month in 2019, with all the tension involved in an episode of Deal or No Deal. There was a constant barrage of comments out of Washington that kept the financial world on edge. Whether the news was about signing a trade deal, postponement of a trade deal or additional tariffs, the back-and-forth tweets and reports out of Washington created new highs and lows in stock prices and bond yields. The trade disputes were not limited to China, but spread to Mexico, Canada and the Euro region, threatening growth across the globe. By mid-year, a surprise tariff deal against Mexico was averted, as the dispute with China was intensifying. As negotiations continue between the U.S. and China, the threat of an additional 25 percent tariff on $300 billion of imported Chinese goods weighs heavy on U.S. companies and consumers.

The economy remains strong despite the trade wars. Consumer spending is back on track after a slow start to the year. The labor market continues to be healthy, with job gains well within the range of stable growth. The unemployment rate is at a 50-year low, signaling a tight labor market. The number of job openings exceeds the number of unemployed people by over one million, a record level since 2000. Wages are steadily improving, especially for lower paying jobs. The one area where trade uncertainty is most evident is business investment. Companies have begun delaying expansion plans and equipment purchasing simply as a precautionary measure against the outcome of the trade wars. Manufacturing has also slowed down, as many orders were processed earlier this year in advance of trade tariffs taking effect.

Inflation remains the one sticking point in the economy that is creating a lot of confusion among economists and Fed members. The Federal Reserve has set a target of two percent for inflation. While remaining committed to this level, the Fed has acknowledged it is taking longer than they expected to achieve this goal. The most recent measure of core PCE is 1.6 percent. The Fed has suggested low inflation is largely due to transitory effects that will soon disappear, namely falling energy prices and an unusual drop in apparel prices earlier in the year. However, month after month of low inflation indices is making it difficult to believe weak pricing is only temporary.

Aside from trade, the Federal Reserve was the most volatile force for the financial markets during the first six months of the year. After raising interest rates for the fourth time in 2018, the Fed did a 180-degree turn with several stops along the way. March was a turning point for the financial markets, when the Fed announced that patience was the new modus operandi. As trade tensions increased, it wasn’t much longer before the Fed took the next step and forecasted an end to raising interest rates in 2019. The Fed cited global economic weakness, the continued uncertainty of the trade tariff issue with China and stubbornly low inflation as some of the headwinds affecting the U.S. economy. The change in the Fed’s tone sent the stock and bond markets reeling for days. Treasury yields fell over 15 basis points in two days, and parts of the yield curve became inverted for the first time since 2007, as worries of an impending recession began to take hold. The fed funds future markets began to price in more than a 50 percent chance for a rate cut by September. The final change came at the June FOMC meeting. The Fed removed the word “patient” from their strategy and signaled closer monitoring was now warranted, as trade issues and global economic weakness were clouding the outlook for U.S. growth. The committee was not ready to cut interest rates quite yet, but many of the members believe a cut would be appropriate sooner rather than later. The anticipated drop in the benchmark lending rate quickly became labeled an “insurance cut” – better to lower rates now, before there is less room or less time to help the economy. The market quickly began to price in a 100 percent chance for a rate cut as soon as late July.

WHERE TO NOW?

Needless to say, the economic outlook and direction of interest rates have changed dramatically over the past six months. The 10-year Treasury note is more than 60 basis points lower, the trajectory is headed below two percent versus above three percent, and the stock market continues to reach new highs. The yield curve is close to the lowest level in 12 years. Mortgage rates are 50+ basis points lower from year end, while auto rates are close to unchanged. For the first time in seven years, the difference between a 60-month auto loan and a 15-year mortgage is close to zero. Maintaining a healthy net interest margin will be a challenge for credit unions, as the Fed is poised to take interest rates lower. However, the economy is still strong and projected to grow 2.5 percent. Lending should remain strong for credit unions as consumers continue to reap the benefit of low interest rates. 

Categories: Education & Training, Sales & Service, Strategic Planning & Consulting
Posted by Mr. Bill Meyer, Communications/Public Relations, Credit Union Direct Lending on 6/4/2019

When $930 million Amplify Credit Union, based in Austin, Texas, switched to the CUDL platform it was more than just a change of indirect auto lending portals, it represented a move up to the “CUDL way of life,” according to Tony Kountoupis.

Kountoupis, the credit union’s VP of consumer lending, said Amplify had been using two competitor platforms prior to making the upgrade to CUDL in June 2016 – and the positive change was quickly evident.

“Our staff quickly settled into the CUDL way of life,” Kountoupis said. “Being on the CUDL platform allows us to tap the expertise of analysts, who give us a better idea of the big picture. When we hired a new underwriter, and trained her on our systems, her feedback early and often was she much preferred working with the CUDL system.”

“With CUDL it was so easy,” recalled Kevin Garraway, Amplify’s Consumer Underwriting Manager. “On day one we noticed how much information was at our fingertips. Of course, it was new and some things were different, but the system was easy to learn. Because we are not looking at as many applications now as we were before, we can focus more on the dealer relationship aspect of lending. We encourage our people to reach out to the dealers to talk.”

When Amplify was still using its previous indirect lending platforms, Kountoupis said the management team felt the credit union was doing well from a production standpoint, but it was battling a host of inefficiencies.

“We struggled with reports and we had difficulty with dealer relationships,” he said. “Anyone who is going to operate in the indirect space knows dealer relationships are everything. We need thoughtfully-submitted applications. We wanted to expand outside the footprint of Austin and offer our program to dealers.”

Making the switch

Amplify CU has been involved in indirect auto lending for many years. Kountoupis noted most of that time it used two other platforms. “They are ok platforms… for some lenders,” he said. “For us, the relationships with dealers are so incredibly important, and with those previous platforms we were unable to maximize our dealer relationships.”

In 2015, the management team began a “serious conversation” about switching to the CUDL platform, Kountoupis continued. He said the VP of consumer lending at that time shared the “great experience” his previous credit union had using CUDL.

More booking, less fruitless looking

Amplify CU has seen multiple benefits from its switch to CUDL. Most significantly, the credit union has experienced an increase in the quality of applications, improved relationships with dealers and easier underwriting, due to the system’s use of electronic information. Kountoupis said another positive is getting away from the practice known as dealer “shot-gunning.”

“It’s a common practice for dealers to shotgun applications,” Kountoupis said. “On other platforms, a dealer might send an application to five or six places at once. However, they have no intention of sending the loan to some of those lenders. We felt we were getting an inordinate number of applications that were not going to make it to the finish line. The dealers were using us like a kid applying for college uses a safety school.”

Benefits of a CUSO partnership

Valarie Ivester, Amplify’s indirect relationship manager, said yet another benefit to upgrading to the CUDL platform is the credit union receives all the benefits of the company behind the technology.

“It is important to have a CU Direct representative working with us. Previously, we had difficulty holding a dealership accountable because we did not have good reports,” Ivester said. “I had a dealer tell me he had not worked with credit unions and never would. I told him the CUDL system was superior to other systems out there, and he needed to be open to doing more than just what he was used to doing. We worked with our CU Direct rep to sit down with this dealer -- and others -- to show them how easy the system is to use. Our rep really did the work, which is so important. We worked together to communicate with dealers to build relationships and eliminate hurdles.”

Faster funding

Ivester, Garraway and Kountoupis agreed Amplify has benefitted from CU Direct’s SmartFund program within CUDL, which allows easy electronic funding. They pointed to the obvious benefit of being able to underwrite and fund very quickly, because that makes the dealership feel good. Kountoupis said most dealers look at 15 minutes as the maximum time for a response from a potential lender.

“Really, you need to respond within 5 minutes,” Kountoupis said. “If a dealer knows you are going to respond quickly and then fund quickly, that is everything.”

Before Amplify implemented CUDL it was still using paper files for proof of income, insurance and title. This involved going through a huge stack of paper related to each application, which was “very clunky.” Kountoupis noted that the credit union likes to take advantage of technology when it is available, “and the electronic submission capabilities of the CUDL platform really works with our values. The dealers scan and upload everything, we can ask questions if there is an issue, and we typically can fund the same day. That is special.”

Building an indirect lending program does not happen overnight, Kountoupis noted. “There is effort required on the part of the financial institution. It took us about six months to get to the same production levels after bringing dealers over to CUDL. But once we reached that point, we began operating so much more efficiently. It was far less about an exponential increase in production than it was operating at an optimum level. We can put $10 million on the books in a month and it feels like a cakewalk. Previously it felt like a massive undertaking to reach that amount in a month.”

Growing relationships with dealers

With its previous lending platforms, Ivester and Kountoupis felt the best way to manage Amplify’s indirect lending program was to work mostly with 10 dealers, out of a network of approximately 45 to 50 dealers, and have those 10 send the credit union a large number of applications. They said that still can be a pretty effective strategy for some financial institutions, but expanding from 10 dealers to its present 110 has been “great” for Amplify. Kountoupis said this expansion has diversified both risk and geographic reach, and it allows the credit union to work with dealers in small towns that may only produce a few deals a month.

“We can have meaningful relationships with many dealers,” Kountoupis added. “Dealers are able to pull their own reserve statements, which is so huge.”

Garraway noted that some people would find expanding from 50 dealers on another platform to 110 on CUDL to be a little intimidating, but he said the program is very “user-friendly,” which makes it possible.

“I didn’t have to do much to coach up the underwriters after we switched, “Garraway recalled. “We have significantly cut the time needed for underwriting because all the necessary decisioning information is in one place. Once you start using CUDL, it is a seamless process. The number of deals we have to burn through is down significantly because we get better applications. Our look-to-book is way up.”

Today, Amplify receives approximately 1,300 to 1,400 applications per month. Previously, it could expect 2,600 applications per month, sometimes as many as 2,900. However, the credit union’s look-to-book was 13 percent to 14 percent; today it is 20 percent to 22 percent.

“We might even hit 25 percent in a good month,” Kountoupis said. “Keep in mind, underwriters are not robots, so it helps them by not having to see so many applications.”

In 2015, Amplify CU did $112 million in indirect auto loans. In 2018, it booked $125 million in indirect loans, and it did so while wading through less than half of the number of applications it did in the earlier time period.

All in all, Kountoupis said Amplify’s expectations of the CUDL Platform have been met and surpassed in some areas.

“We are never where we want to be, we want to keep expanding and improving, and with CUDL we can achieve this.”

 

Categories: Business Partners, Sales & Service, Strategic Planning & Consulting, Technology Consulting & Compliance
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