September 2012
Benefits of Performing Portfolio Reviews
Over the past few years, there has been a dramatic increase in the number of members served by credit unions across the country. With this increase, there are also more relationships to maintain and more diverse problems—such as risk—to manage. Many credit unions have turned to portfolio reviews, which are, essentially, snapshots of your portfolio. Portfolio reviews can help assess both overall portfolio risk and individual account-level risk and help you to address any issues head-on.
Better Risk Identification
Simply measuring the raw numbers of accounts that are 30, 60, or 90 days past due has limited predictive power, since this does not reveal the likelihood that accounts will further degrade or improve. In contrast, reviewing your portfolio gives you actionable data by providing insight on the risk residing in your portfolio.
Monitoring Trends in Risk
By conducting reviews on a monthly, quarterly, or semi-annual basis, you will be better able to identify changes and determine trends. For example, if a portfolio review runs today and then again in three months—and the second review reveals generally lower scores—this could signal several different scenarios. It could indicate a need for tighter approval guidelines, or it could simply be a result of external economic conditions on consumers in your portfolio.
Enhanced Account Management
When you consider the high cost of acquiring new members, the value of retaining your existing membership cannot be overstated. Relationships are essential in this increasingly competitive market and portfolio reviews can help you maintain relationships because they let you see beyond your own limited lending relationship with particular members and provide insight into each member’s overall profile.
Audit Assistance
Many regulators will suggest that batch portfolio reviews be run for the same reasons listed above. They may even ask about specific populations of your portfolio and reviews can help you answer those questions.
Ultimately, portfolio reviews can provide greater intelligence on customer credit profile changes to help you strengthen risk management decisions and take action to improve performance.
For more information on portfolio reviews, contact your Association Account Executive or visit transunion.com/portfolioreview.
CU PolicyPro Updates Recently Released
The second set of updates for 2012 have been released and were recently emailed to each credit union. This update includes three NEW policies, as well as 15 that have been revised.
One of the new policies is Loan Workouts and Nonaccrural Standards – Policy 3165 which includes the regulatory language from a recent NCUA ruling with a deadline of September 30.
This required policy contains several “Key Fields” so that it may be customized by each credit union: specifying who in the credit union will perform various functions, under what conditions your credit union will consider a loan workout and the maximum number of times closed-end loans may be extended, deferred, renewed, or rewritten.
For help in taking full advantage of CU PolicyPro, or for assistance in updating your manual with the new policies, contact PCUA Compliance & Operations Officer Elaine Royer at 800-932-0661, extension 5341, or by email at elaine.royer@pcua.org.
Compliance Q&A
Q: We are looking to reduce our mailing costs. How often are we required to send a statement to a member?
A: A statement must be provided to a member at least annually, unless an electronic fund transfer (EFT) occurs, in which case (under Reg E) a statement for each month in which an EFT has occurred must be provided, and at least annually if no transfer has occurred.
An EFT is any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account.
IRA Training Workshops: 2 Locations. 2 Days. Your Choice!
The Association’s IRA Training program puts you in the driver’s seat. Whether it’s getting new staff on board with the basics of IRAs or you need a more advanced training, the IRA Essentials & Beyond Essentials Training Sessions are the answer.
With training programs scheduled in Pittsburgh and Lancaster locations, and the option of attending just the IRA Essentials, Beyond Essentials or both, you can tailor the training for your needs. Your staff will leave confident and ready to provide the professional service your members are expecting.
For all the details, click here.
FREE WEBINARS from
NCUA and CMG
NCUA Supervisory Guidance
September 20, 2:30 p.m. EST
Loan Workouts, Nonaccruals and Regulatory Reporting of Troubled Debt Restructuring
NCUA experts and representatives of consultant Growe Horwath will discuss supervisory guidance recently issued to examination staff about implementing the final rule on loan workouts and nonaccrual policy and the regulatory reporting of troubled debt restructured loans.
Click here to register today.
CMG Discovery Online Conference
Tuesday, October 9
Attend this third annual virtual one day conference from the convenience of your computer. Participate in several sessions, network with other credit union professionals, and have a chance to win fabulous prizes. Discover how much you have to gain, with minimal investment of time and absolutely no cost.
OSCI Consulting Services
The Office of Small Credit Union Initiatives (OSCUI) recently switched to a semi-annual enrollment system for selecting credit unions that participate in their Consulting Program. The consulting services are provided through a team of Economic Development Specialists (EDS). Credit unions with a low-income designation or having assets less than $10 Million are eligible for EDS assistance.
• Nominations may come from either NCUA staff or credit unions requesting assistance
• NCUA will prorate consulting time with an EDS among the agency’s five regions based on the number of federally-insured credit unions in each region
• OSCUI and the regions will meet twice a year to identify, prioritize and enroll credit unions in OSCUI’s Consulting Program
• Credit unions enrolled will receive assistance during a six-month window
• At the end of each June and December, OSCUI will release enrolled credit unions to provide space for the next group of participants
For further information about OSCUI’s Consulting Program, please email OSUImail@ncua.gov
Pennsylvania Credit Union Association