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How Meritrust Credit Union Overhauled Its Lending And Automated Decisioning

Learn about how the Kansas credit union more than tripled its auto decisioning for direct and indirect loans.

For many years, Meritrust Credit Union’s consumer lending operations were considered successful in terms of application volumes and portfolio returns. Yet representatives at the Kansas credit union felt that the site-licensed loan origination system being used lacked a good deal of automation for decisioning, core system integration capabilities, and other important functionality such as electronic loan closings.

The previous system’s deficiencies led to a high level of manual steps, workarounds and other Band-Aids in the overall process. On the indirect side, alone, where Meritrust utilized a team of six underwriters to handle roughly 5,000 applications each month, automation hovered around 10%. That level of automation translated to a lot of time-consuming, manual reviews.

With what we were using, we were entering everything into the system as funders, and then they were re-entering everything in their core system to fund it, said Heather Gates, director of Direct Consumer Lending at Meritrust. So basically everything was being funded twice. Because we didn’t have a really robust upload to DNA, we essentially could have gone into our core system and funded whatever we wanted.

Founded in 1935 and headquartered in Wichita, Kan., Meritrust Credit Union is the state’s largest credit union. It has $1.3 billion in assets and serves more than 91,000 members across 17 counties.

Gates added that from a quality control standpoint, Meritrust’s quality assurance department had its hands full because the previous system allowed so many mistakes to occur. To remedy the main issues it was facing, the credit union sought a platform where logic could be written into the upload that would significantly reduce data-entry errors and processing rules to keep funders from funding things they otherwise shouldn’t.

The Meritrust team found that the CRIF ACTion Consumer loan origination system filled these needs and more. As far as auto decision, engines in the other systems didn’t offer the same functionality and customization for setting pricing, rates, and lending limits, Gates said. All of that is handled in ACTion through a variety of matrices and expert system rules.

Emily Stewart, special projects manager, Lending at Meritrust, said full integration with DocuSign solutions for eClosings really complemented the credit union’s goal for a centralized process that utilizes the latest technology for a better member experience such as a strong API for online applications.

The connectivity to portals such as Dealertrack and RouteOne was also huge for us on the indirect side since one of our goals was to find a system that significantly improved our ability to communicate with dealers, Stewart said. With ACTion, we can send faster communication, status updates, as well as custom delay and funding notifications. We felt that functionality would really help our ability to strengthen dealer relationships and ultimately our results.

Perhaps the next major difference, Gates said, that separated ACTion from the other systems considered was the CRIF team’s expertise and commitment to a true partnership. Unlike with some providers where the relationship pretty much stops as soon the platform is delivered, the ACTion team continues to be with us every step of the way, she said. We needed more of a consultative role to avoid simply building a new system that mirrored the previous one.

ACTion has enabled Meritrust to reduce human error, increase auto decisioning, and create a vastly streamlined lending process, Stewart explained. Auto decisioning has increased from approximately 10% for both direct and indirect to 31% for direct and 40% for indirect. Automation for unsecured loans, which Stewart estimated was next to nothing for the previous system, jumped to 41%.

The DocuSign integration has created a more consistent experience for our members, branch staff, and quality assurance representatives, Stewart said. Documents are now signed in the right place by the right people and automatically archived.

Because of the custom core interface the ACTion team was able to build for Meritrust, funding times were cut dramatically, previously relied upon manual steps were automated, and data entry errors were cut dramatically. Gates and Stewart agreed that an estimated 120 clicks were eliminated from the process.

For direct lending, this meant that branches can now close loans and upload them within minutes. This gives us quality controls we are comfortable with, all without inconveniencing the member, Stewart said. The monetary upload is our favorite feature.

Much like choosing ACTion to embrace eClosings was a step toward fully embracing the digital era, Gates said the fintech partnerships CRIF Lending Solutions continues to establish bring all the latest innovations without the strain of figuring out how to incorporate them to ACTion and their operations. We’re really excited about the forward-thinking culture at CRIF, she said. Without their willingness to partner with companies like SD Sharp, MoveCU, and Carvana, we couldn’t leverage certain technology today. They’re trying to be that bridge builder between us and other solutions.

The Meritrust team is also excited for the upcoming ACTion⁺ release, which delivers HTML5-formatting for responsive design on any mobile device as well as delivers back-end processing capabilities to create an untethered experience for both the member and Meritrust’s staff.

From a technical perspective, I’m excited about not being constrained to one version of Internet Explorer, Stewart said. We run everything through Citrix, so we’d sometimes experience issues like things getting bogged down since we’re all operating from the same Internet Explorer server. The ability to use Chrome and other browsers is huge from a technical standpoint for our IT department when it has to support us through those types of issues.

The tablet- and mobile-enabled processing for the back end is really opening doors for Meritrust, Stewart explained. For example, she described, Meritrust’s chief lending officer was recently in an all-day board meeting and needed to approve a very sizeable loan for an RV purchase. Previously, he’d have to go back to his desk or we’d have to be texting him, and it was running down to the wire, she said. With ACTion⁺, he’ll be able to sign in from the meeting and take of it right then and there.

Want to learn more about how ACTion⁺ can enhance your credit union’s decisioning and loan origination capabilities? The newly updated CRIF ACTion brochure includes more information on why ACTion⁺ is the industry’s most complete digital solution. To request a copy of this brochure, please click the button below.

This article is sponsored by a recognized solutions provider in the credit union industry. Callahan & Associates does not endorse vendors or the solutions they offer, and the views and opinions offered here might not reflect those of Callahan. If you are interested in contributing an article on CreditUnions.com, please contact the Callahan team at ads@creditunions.com or 1-800-446-7453.
October 30, 2017

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