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LEVERAGE is thrilled to announce an exciting partnership with Constant, a leading software provider that is revolutionizing the landscape of loan operations and member self-service. This collaboration is set to reshape how credit unions approach loan servicing and customer experience, offering unparalleled automation and empowerment. Constant's breakthrough technology is poised to liberate credit unions from the shackles of manual processes. Tedious workflows and repetitive tasks that have long weighed down loan operations are now a thing of the past. With Constant's pioneering solutions, credit unions can enhance operational excellence, reduce costs, and accelerate borrower assistance. Constant's unique value proposition lies in its ability to fully automate loan servicing, allowing members to seamlessly manage their loan-related requests within their online banking accounts. This intelligent system leverages insights from member actions to offer personalized product recommendations, elevating the overall member experience. Through this strategic partnership, LEVERAGE and Constant are charting a bold path toward a more streamlined, efficient, and member-centric credit union landscape. Financial institutions that embrace this collaboration are poised to unlock new avenues for growth and a remarkable member experience. For more information about LEVERAGE and Constant, visit www.myleverage.com or contact a LEVERAGE Business Development Consultant at consult@myleverage.com. | ||
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Staying ahead of pressing topics trending in the financial services industry is an essential practice for credit unions. Continuing this bi-weekly educational webinar series, we will be listening to leaders from LEVERAGE’s service companies as they host a discussion on issues and potential solutions within their specific service areas. Plan on spending 30 - 60 min with LEVERAGE beginning at 11:00 AM ET every 2nd and 4th Tuesday of the month in 2023. Here’s a preview of the content you can expect!
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By Emily Nadboralski, Director of Data & Analytics, and Vicki Potter, Analytics Consultant, TruStage™ In an era dominated by digital advancements, the credit union industry may face a new and intricate battle against predatory lending. Drawing insights from actual credit union data, our goal is to shed light on the specific segments of members who are most susceptible to these lenders. Once credit unions know which members are most vulnerable, they could intervene with tailored product offerings designed to help prevent members from entering a payday lender cycle. The surge of digital predatory lending without regulation The digital revolution is one of the causes of a surge in predatory lending. It has helped to create an environment where certain lenders might take advantage of gaps in regulation and consumer understanding. Practices such as high-interest payday loans, terms that could be confusing, and fees that aren't immediately apparent are among the methods employed by these lenders to attract borrowers. As an example, the annual percentage rate (APR) of a typical two-week payday loan with a $15 fee per $100 borrowed is 391%.¹ The situation has become so severe that some U.S. states have enacted a 36% interest rate cap for payday lenders and 12 states have banned them altogether.2 Payday lenders have expressed concern that the cap will not permit them to continue conducting business in Minnesota, as an example, which they claim will encourage prospective borrowers to pursue loans via unregulated online marketplaces.2 However, research indicates a substantial decrease in payday loans and borrowers pursuing online loans within regulated states.2 Additionally, more than 80% of borrowers have expressed they would be more cautious with their expenses if payday loans weren’t available.² Even with regulation in place, the magnitude of existing and estimated future payday lending growth is still prevalent. In 2021, the Payday Loans market had an estimated worth of approximately $33.5B and this is projected to increase to $42.6B by 2028.³ Shedding light on vulnerable segments With the shift to the digital realm, payday loan providers can now greatly expand their outreach, encompassing a wider range of consumers. It is more probable that low-income households and communities of color will be targeted by payday lenders.2 Vulnerable members may choose a payday loan over their credit union because they may feel embarrassed displaying their current financial situation. Beyond the emotional strain, members may turn to digital payday lenders because they feel it's their only option. Thankfully, data has emerged as a powerful tool in the fight against predatory lending. By leveraging data analytics and technology, credit unions can gain valuable insights into their members' financial behaviors, helping enable them to identify signs of susceptibility to predatory lending and take proactive measures. Strategies for supporting vulnerable members Credit unions can proactively identify members who could benefit from support by collaborating with them when they seek assistance. They can also explore opportunities by examining Automated Clearing House (ACH) deposits from payday lenders into members' accounts, with the members' consent. This isn't always one large deposit; it can be small deposits from multiple payday lenders. Once identified, credit unions can extend a helping hand by offering to help pay off the loans and get members into better financial security. Through this approach, credit unions achieve two benefits. First, by helping members improve their financial situation, they may cultivate a sense of loyalty among members who develop a strong trust in their credit union. Second, they may enhance their earnings through increased interest generated by loan repayment products. The path forward The digital transformation of the lending landscape has great benefits, but it has also opened the door to predatory lending practices. Credit unions, with their member-centric approach, are well-positioned to leverage data to help protect their members from falling victim to predatory loans. By harnessing the power of data, credit unions may help identify signs of predatory lending and take proactive steps to educate, intervene, and offer dignified financial services with members’ best interests in mind. 1 United States Federal Trade Commission, “What to Know About Payday and Car Title Loans”, July 2023 TruStage™ is the marketing name for TruStage Financial Group, Inc. its subsidiaries, and affiliates. Corporate Headquarters 5910 Mineral Point Road, Madison, WI 5370 | ||
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In today's rapidly evolving digital landscape, credit unions face a multitude of challenges when it comes to safeguarding sensitive information, ensuring financial stability, and maintaining their reputation. One of the most pressing concerns is the management of third-party risks, which can have far-reaching consequences for your institution. The Significance of Third-Party Risk Management Third-party risk management is no longer just an auxiliary aspect of cybersecurity; it's become a fundamental pillar for credit unions and financial institutions alike. But why is it so crucial? Imagine this scenario: Your credit union relies on a technology provider to maintain its essential operations, from online banking to member communication. Now, what happens if that technology provider experiences a security breach or a catastrophic system failure? The consequences can be devastating, leading to data breaches, financial losses, and damage to your credit union's reputation. The question is, are you prepared to handle such a crisis effectively? Proactive Preparedness is Key A proactive approach to third-party risk management can save your credit union both time and money. Instead of scrambling to respond to a crisis, you can identify potential risks in advance and take steps to mitigate them. This proactive stance not only enhances your security but also bolsters your institution's resilience in the face of unforeseen challenges. In today's digital landscape, vulnerabilities in software are continuously being discovered. These vulnerabilities can be exploited by malicious actors, putting your credit union's assets and reputation at risk. Therefore, keeping up with emerging threats is essential, but it can be a daunting task without the right tools and expertise. CUVM: Your Partner in Third-Party Risk Management Enter CUVM, your trusted partner in managing and mitigating third-party risks. CUVM is a comprehensive platform designed to help credit unions navigate the complexities of vendor management and cybersecurity. Here's how CUVM.org can assist you: 1. Risk Assessment: CUVM provides a robust risk assessment framework to evaluate your technology providers thoroughly. You can identify potential vulnerabilities, assess their impact, and prioritize risk mitigation strategies. 2. Incident Response Planning: In the unfortunate event of a data breach or technology failure, CUVM helps you develop and implement an effective incident response plan. This preparation ensures that your credit union can respond swiftly and minimize the damage. 3. Continuous Monitoring: CUVM offers continuous monitoring of your technology providers to stay ahead of emerging threats. Regular assessments and updates help you adapt your risk management strategies as the threat landscape evolves. 4. Resource Optimization: By streamlining your third-party risk management processes, CUVM allows you to allocate resources efficiently, saving both time and money. 5. OFAC Search: We check all third-party vendors through the Office of Foreign Assets Control (OFAC) so you don’t have to worry about sanctions. In a world where the stakes are high, and the digital landscape is constantly evolving, CUVM.org empowers your credit union to proactively manage third-party risks, safeguard member data, and maintain your institution's integrity. For more information on how CUVM can assist your credit union, please visit CUVM.org or contact our dedicated team at info@cuvm.org. | ||
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We're thrilled to introduce you to Tru Treasury, a game-changer in the world of treasury management. Our mission is simple: to empower credit unions and their business members across the United States with unprecedented treasury management capabilities and expertise. In today's financial landscape, the market for quality Treasury Management solutions has long been dominated by large national and regional banks. Credit unions and community banks have often faced challenges in competing for business deposits, lacking the scale, investment capabilities, or expertise to do so effectively. That's where Tru Treasury comes in, created by Credit Unions for Credit Unions to shift the paradigm. Our Singular Focus At Tru Treasury, our singular focus is equipping community financial providers with the tools, expertise, and products they need to deliver leading treasury solutions to the businesses they serve. We understand the unique challenges credit unions face, and we're here to help you overcome them. Our mission is clear: to provide credit unions with treasury management expertise and the scalability to grow. How Tru Treasury Can Help Your Credit Union Tru Treasury partners with credit unions to develop comprehensive Treasury Management programs that offer a multitude of benefits: 1. Additional Revenue Streams: We assist in implementing additional annuity revenue streams, helping your credit union diversify its income sources. 2. Risk Mitigation: Tru Treasury adopts an aggressive risk management approach to mitigate potential threats and enhance your institution's resilience. 3. Benchmarking: We help benchmark your processes and procedures against other financial institutions, ensuring that your credit union remains competitive. 4. Efficiency Improvements: Identify innovative efficiencies within your current product set to improve operational effectiveness. 5. Member Attraction and Retention: Our solutions help attract and retain business members by offering them the tailored services they need. 6. Competing with Banks: Tru Treasury empowers credit unions to compete effectively with banks, offering treasury management services that rival those of larger financial institutions. In essence, Tru Treasury is here to level the playing field, enabling credit unions to excel in treasury management and provide a valued service to their business members. We're excited about the possibilities, and we look forward to partnering with credit unions like yours to achieve new heights in the world of treasury management. If you'd like to learn more about how Tru Treasury can benefit your credit union, visit TruTreasury.com. Together, we can unlock the full potential of your treasury management capabilities. |
