May 2017: Samaha Associates’ CEO Sabeh Samaha Featured in CUES Article: Loan Zone: Setting the Credit Speedometer
Loan Zone: Setting the Credit Speedometer
May 2017 – Vol: 40 No. 5
by Richard H. Gamble
Everyone talks about swift payments, but what about swiftness in lending?
Gaining speed around providing credit is a different proposition from speedier payments. Fast credit focuses
critical but relatively infrequent front-end event of and approving loans. Once a mortgage or car loan has , borrowers like payment convenience but don’t care about they are delinquent. And a credit card linked to an approved line of credit generally provides a fast-enough way to buy something on credit.
The key these days to speedy lending is using mobile to reduce member friction and add value, observes CUES member Kris VanBeek, CCE, CIE, president/CEO of $1.25 billion USAlliance Financial, Rye, N.Y. USAlliance Financial members can use their ’ cameras to upload loan application documents; use to capture name and address information of a photo of a driver’s create virtual strong boxes to securely documents like birth certificates and tax filings that needed to attach to credit applications. They can also use their phones GPS features to validate location and support authentication.
For credit products, the need for speed is concentrated primarily front-end decision and implementation, explains
Sabeh F. Samaha, president/CEO of Samaha & Associates Inc., Chino Hills, Calif. Decisions should be fully automated or mimic full automation, he says. “All the pieces needed to make a decision should be pulled in real time, including those drawn from third-party systems,” . Then the onboarding should be automated and essentially instant, with full visibility of the status to the applicant. Once that , the need for speed is less urgent, but still needs to to processing delinquencies, and workouts, he adds. “It’s all about integration and seamless automation.”
For credit cards, instant issue is a very valuable feature. “Being able to hand a member his or her card right there in and show him how to use it and appeal to the member to make top of is a huge point of influence that can really pay the CU,” he points out. Once the card is in service, transaction speed will be a non-issue unless a processor blocks a
transaction because it looks like it could be fraudulent, he adds.
Among its credit products, $1.3 billion Evansville Teachers Federal Credit Union, Evansville, Ind., makes a lot of indirect automobile speedy approval is important. It uses auto- for about 15 percent of them, but even there the CU takes time to run it by a human underwriter. “Nothing can replace the judgment of a good ,” notes Sara Robinson, VP/consumer lending. “We’ve trained our underwriters to expedite their decisions.” On average, it now takes a staff member between six and
seven minutes to approve an indirect car loan, she estimates.
That’s not real time, but it’s faster than the industry standard. “We’re a dominant player in our market,” Robinson explains. “On occasion, we lose out to a lender that offers better rates or a larger reserve to the dealership, but we don’t lose a
loan simply due to speed.” Evansville Teachers FCU doesn’t do instant issue yet, but is considering it.
“Speed of issuance is important; however, rate and rewards are where we’re most competitive,” Robinson notes.
Speed is definitely an issue for mortgages, according to Annette Maier, Evansville Teachers FCU’s VP/real estate lending. “ time is definitely on our radar,” she notes. “We’ve studied our processes. Home buyers are excited to get into their new home and we want to help them achieve that as quickly as possible.”