Posted by Mr. Bill Meyer, Communications/Public Relations, Credit Union Direct Lending on 11/13/2018

Lending is a credit union’s primary profit driver. Yes, investments also produce non-interest income, which is a big revenue source, but lending is where the rubber meets the road when it comes to people helping people.

As a lending executive, you know this is a big responsibility—stewarding your cooperative’s assets to produce strong revenue, while maintaining safety and soundness. That’s why it’s crucial to build and maintain your loan portfolio using the very best analytical research and tracking methods available.

It’s no wonder in this age of Big Data that analytics have become a critical tool for credit unions to drive portfolio growth.

Fintechs have leveraged Big Data in new and inventive ways. Thinking beyond traditional loan origination guidelines and risk attributes, such as credit score and job history, fintech financing companies are creating and defining new risk attributes and turning to social media, utility, and cell phone data as the new risk predictors.  From loan performance to transactional data, if done right, credit unions can leverage this data for proprietary data analytics and multi-decade insight that newbie startups would salivate over.

Through our Lending Insights loan portfolio management system, we’ve compiled a series of best practices to help credit unions get the most out of their data to build the very best loan portfolio possible. Here are five key tips that can put credit unions on the fast track to profitability.

      1.      Pricing

Too many credit unions still use a “follow the market approach” when it comes to pricing loan products. This can lead to areas in your portfolio that are unprofitable and drag down your yield. It is crucial that credit unions use a loan portfolio management system/analytics that can segment loans by credit score, rate, term and other components and track the profitability of each segment.

One credit union shared this insight: “We use this information to adjust our pricing to ensure larger margins, while at the same time staying competitive in the marketplace.”  The proof is in the data: credit unions on the Lending Insights platform, on average, see a 10% increase in funded loans year over year leading to an increase in net yield and profitability.

2.      Underwriting

Are you leaving money on the table? Using the right analytic tools can help determine if your underwriting criteria are too conservative. One of our credit union partners discovered that after lowering its auto loan approval cut off from a credit score of 700 down to 660, loans with scores from 660 to 699 performed almost identically to those with scores of 700 and above.

This discovery, coupled with other underwriting changes by the credit union, resulted in more approved loans, faster approval times for members and absolutely no additional risk to the portfolio. These underwriting tweaks fueled an annualized 3% growth in loans!

3.      Dealer management

Which auto dealers are driving the best performing loans to your institution? Our credit unions regularly monitor dealer performance, ranking them by profitability. One credit union, which monitors dealers quarterly, uses the information to spot opportunities to deepen relationships and increase incentives for good performers, while monitoring dealers that aren’t contributing to the health of the credit union.

4.      Marketing

While it’s important to monitor current borrowers’ credit scores for negative movement, you should also look for improvements and determine if those members qualify for additional loan products. You’ll find members building or repairing credit, and others that have paid off loans. Either way, these members will soon be in the market for a new car, home or credit line. Having the right data platform will give credit unions the ability to perform a drill-through function to create lists of potential borrowers for marketing campaigns.

5.      Product development

As fields of membership grow and change, your product lineup should also change accordingly. Those products shouldn’t be developed on a hunch or opinion. Instead, data should lead the way.

Relying on the right dynamic analytic solutions helps credit unions to first effectively analyze loan originations by age group, and then divide them further by loan type, term and origination amount.  As a result, credit unions better understand who their customers are and what they are buying, and can ensure they have products that are meeting their ever-changing needs.

Implementing strong data platforms and employing innovative tools— such as Lending Insights’ loan portfolio management system—to deliver continuous value to its members will put credit unions at the forefront of an ever-evolving and growing competitive landscape.  Every credit union holds the key to valuable data at their fingertips, and effectively harnessing that data to minimize risk and uncover new opportunities will be the difference maker.

(This article is by CU Direct's Adam Smith, Product Owner/Manager of Lending Insights) 


Categories: Business Partners, Strategic Planning & Consulting
Posted by Omar Mir, Marketing Communications Coordinator, FTSI on 11/6/2018

To say that investing in the Teller Cash Recycler is a worthwhile investment is an understatement. So what word or phrase effectively describes what a TCR can do for your financial institution? Simplification. We say simplification because of five key reasons; lowering your branch’s operational costs, managing your cash control more effectively, upgrading security for cash storage, increasing revenue at all of your branches, and the ability to create quality time between your tellers and your customers. So let’s get into the details of each of these five key reasons.

  1. Lowering Operational Costs

Lowering a branch’s operational cost is something that will interest any financial institution. Teller Cash Recyclers do this through a few different ways:

  • Eliminates the time consuming and tedious process for tellers to physically count cash
  • High accuracy in cash counting to balance at the end of a teller’s shift
  • Saved hours can be turned into other opportunities for tellers to cross train and cross sell
  1. Cash Management

TCR’s manage your cash management and cash security more effectively as well.  With up to 16,250 note dispense capacity and 12,000 note recyclable capacity the LTA-350 is one of the most efficient teller cash recyclers on the market. It is also capable of note counting/sorting and serial number tracking which most competing TCRs do not offer. But probably the most important cash control feature of the LTA-350 is its auto self-auditing feature that is not available on the vast majority of other TCRs. With a reject bin capacity of 300 notes, auto-retracting capability, overflow cassette, and cassette tampering indicators the LTA-350 is more than suited to manage cash in your branch.

  1. Improved Security

Replacing cash drawers with cash recyclers can improve security and allow for a more open branch layout. The ability to store cash in a secure machine improves on-site security. With features such as serial number tracking and cassette tamper indicators the LTA-350 provides a cost effective and secure solution.

  1. Increased Revenue and  5) Customer Face Time

Putting the focus back on your customers is essential for any financial institution. Creating quality time between tellers and customers is a great way to increase revenue. Tellers are an important part of your business and engage with customers face-to-face on a daily basis. The LTA-350 will reduce or eliminate the extra hours tellers spend manually performing the cash transfer including validating, counting and sorting cash. With the LTA-350 this process is cut down drastically.  You can reduce inefficient task repetition and reduce the resource drain that counting cash places on your branch’s tellers which opens up opportunities for face-to-face time with customers and cross-selling. If you want to simplify your branches operations then consider the LTA-350.

Categories: Education & Training
Posted by Ryan Schweizer, New Business Manager , OneDigital Health and Benefits on 11/6/2018

Does your benefits broker approach benefits as one-size-fits-all?

Today's labor pool is comprised of 5 distinct generations, each presenting unique challenges, and perspectives for employers that have not existed in the past for a singular workforce. Because each group possesses a very different approach to employment and employee benefits, having a fresh approach to your benefits strategy will not only keep you in the game within your industry but help you win high-performing talent over your competitors.

The 5 Generations Working Alongside Each Other in Today’s Workforce:


Baby Boomers

Generation X

Millennials or 
Generation Y

Centennials or Generation Z

~1925-1945 ~1946-1964 ~1965-1980 ~1981-1997 Since ~1998
Smallest percentage of workforce Third largest percentage of workforce Second largest percentage of workforce Largest percentage of workforce Second smallest percentage of workforce
Experienced; Dedicated; Loyal Service and team-oriented; Dedicated Adaptable; Independent; Creative Optimistic; Multi-task; Tech savvy Entrepreneurial; Cautious; Tech savvy

Based on their generation, workers often have particular characteristics and needs that employer should be mindful of when organizing their employees plan design and administration. Here are the top 5 benefits concerns to look out for in your multigenerational workforce:

  1. Health Reimbursement Arrangements (HRAs)

    Whether reviewing the results of an aging employee population and their spouses or taking into consideration younger employees who place less value on employer-provided health coverage, employers often find themselves in a position of seeking avenues to lower their healthcare spend. One solution that arises is to limit or forego a group health plan in favor of reimbursing employees, their spouses, or retirees for health coverage obtained through another source. The Affordable Care Act (ACA), however, prohibits an employer from reimbursing individual premiums, but exceptions are made in limited situations:

    • Spousal HRA: The employee must be covered on the spouse’s group health plan for the employer to reimburse the cost of being covered by the spouse’s plan.
    • Medicare HRA: For small employers for which the employer plays secondary to Medicare, the employer can reimburse all or part of the cost of Medicare-related coverage.
    • Retiree HRA: The employer can reimburse all or part of the individual or Medicare-related costs for former employees eligible as retirees.
    • Qualified Small Employer HRA: If the employer is not an applicable large employer (ALE) or ALE member and does not offer a health plan, it can reimburse individual premiums up to a limit.
  2. Value-Add Benefits

    To round out a total rewards strategy, employers may seek to implement certain value-add benefits intended to target specific aspects of a multigenerational workforce, such as telemedicine, employee assistance programs (EAP), wellness programs, and various supplemental or voluntary benefits. While these benefits may seem cost-effective and straightforward, it is important to remember that these plans often come with not-so-simple compliance obligations that are frequently overlooked. For example, many of these plans have to comply with ERISA, HIPAA, the ACA, COBRA, and IRS regulations for Health Savings Accounts (HSAs).

  3. Mid-Year Election Changes

    With each generation comes certain everyday life changes, such as marriage, divorce, the birth of a child, changes in employment, changes in dependent custody, and the opportunity to transition to other coverage such as Medicare or a spouse’s health plan. When an employer receives a request for a mid-year election change, it is essential to confirm that:

    • the event is covered under the employer’s Section 125 plan document;
    • the employee requests the change within the required notice period;
    • the change requested is consistent with the event that occurred; and
    • the employee provides documentation supporting the requested change.
  4. Medicare-Eligible Population

    The Medicare Secondary Payer rules outline certain protections for Medicare-eligible employees, the most stringent of which is the prohibition of financial and any other incentives for Medicare-eligible employees to forego the employer’s group health plan in favor of Medicare. If the employer is the primary payer, it should be mindful of common errors under the Medicare Secondary Payer rules, such as offering benefits or perks in exchange for Medicare-eligible employees foregoing the group health plan or offering and paying for a Medicare Supplement Plan.

  5. Nondiscrimination

    The most common benefits compliance issue to arise with a multigenerational workforce occurs when an employer seeks to vary its benefits for different groups of employees. Most notably, attempts to reward seniority may create nondiscrimination issues despite the employees being distinct groups of employees that are not similarly situated under HIPAA. Compliance with the HIPAA nondiscrimination rules does not guarantee compliance with other nondiscrimination requirements under Section 105(h) for self-insured plans and Section 125 for cafeteria plans.

Under the Section 105(h) and Section 125 nondiscrimination rules, an employer is prohibited from discriminating in favor of highly compensated individuals. Accordingly, when designing a plan with different eligibility provisions, benefits restrictions, or costs, it is critical to assess whether to plan design based on class differentiations complies with all benefits nondiscrimination rules.

Being aware of the unique generational differences, characteristics and needs of your employees is critical when creating a benefits plan. Make sure you’re aware of the challenges and compliance concerns when designing your plan to avoid headaches while ensuring your benefits are as valuable and applicable to your employees as possible. 

To learn more about tailoring you plan design to suite the needs of your multigenerational workforce contact Ryan Schweizer at or call 214-389-9661. 

Categories: Compliance, Education & Training, Employment & Staffing, Human Resources, Strategic Planning & Consulting, Technology Consulting & Compliance
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