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Best Practices for Managing Delinquency in Uncertain Times

By: Wendy Elieff, SVP, Client Service and Marketing, CU Recovery & The Loan Service Center

Now more than ever, the credit union philosophy of “people helping people” is critical to maintaining member loyalty and trust in their biggest time of need. While the COVID-19 pandemic has left us all experiencing disruption and uncertainty, credit unions are in a unique position to provide members with financial reassurance and support in navigating our new reality.

By employing some of these best practices for successful delinquency management, you can help your credit union build strong member relationships, both during this crisis and in the long term.

Prepare an Action Plan

Credit unions must first develop a crisis management strategy or response plan. Credit union leaders should begin by asking themselves the following questions:

  • What will our approach be regarding fee reversals, payment deferments, workout loans, etc.?
  • How much risk are we willing to take?
  • If we offer deferments for payments, how many months should they be deferred?
  • Are there other ways we can assist our members?
  • What regulations are we concerned with?

Maintain Effective Member Communication

Reinforce to members that your credit union is a trusted resource throughout this crisis by frequently providing helpful information and important updates that are easily accessible and digestible. Create a dedicated support page on your website and utilize all of your credit union’s communication channels (including email, social media, text messaging, push notifications, etc.) to direct your members to learn about available relief programs and ways they can request help.

When creating and implementing your external communications plan, consider various audiences and their relationship with your organization to tailor your information, as well as any compliance requirements.

Additionally, be proactive in offering financial counseling services to your members, and contact those who may be heading into delinquency. Be clear about financial options that are available to them. When speaking with members over the phone, ask your staff to open conversations with, “How can we help you get through this?” and not “Here’s what we’ve got.” Actively listen to what they say, empathize with their concerns and communicate a plan based on the information provided. Showing your gratitude and appreciation for their loyalty and trust can also go a long way.

Now is the time for strong leadership, with less focus on process-driven decision-making by committee. In light of the unique circumstances, credit unions should make their C-level executives accessible to everyone – including customers, clients and members.

Leverage Vendor Relationships

Reach out to your vendor partners to inquire about any hardship extension programs your credit union could implement at this time, including system settings, fee waivers, etc. Explore ways in which you can work together with your partners to assist your credit union and members.

Extraordinary times call for extraordinary measures, and your members are counting on your credit union more than usual. By delivering a high level of personal service and care, you can help ease your members’ financial strain and nurture thriving relationships into the future.

Wendy Elieff oversees the success of the Client Service and Marketing teams in CU Recovery and The Loan Service Center, a PSCU subsidiary. Wendy has worked for CU Recovery for the past 20 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness. She is also responsible for building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.