Key Metrics for Analyzing Auto Loan Portfolios
Auto loans — especially those for used vehicles — have long been a staple of credit union loan portfolios, both via the direct and indirect route. Together, new- and used-vehicle loans comprise about one-third of all credit union loans, in terms of dollars, and 13% of all credit union members ha...
Dear Hilary – Multiple Collateral Pieces
Dear Hilary, Our institution has loans with multiple pieces of collateral. Sometimes a loan can have up to 10 pieces of collateral. Is that going to be okay? How would you like us to send over the data?
Implementing HELOC Reviews as Part of Your Loan Portfolio Management Process
One of the most critical components to your loan portfolio risk assessment is the ever challenging HELOC review. The challenges of successfully performing this review all lie in the fact that there are many moving parts and you may not have control or...
FAQ’s from Webinar: Is ‘Hot Money’ Hiding in Your Deposit Portfolio?
This year we are hosting monthly webinars on various analytics topics. These webinars are in-depth, educational, and overall well worth your time both from a product perspective and an industry perspective.
FAQ’s from Webinar: Are you effectively analyzing your loan application data?
This year we will be hosting monthly webinars on various analytics topics. These webinars will be in-depth, educational, and overall well worth your time both from a product perspective and an industry perspective.
Dear Hilary – Loss Given Default
Dear Hilary, I am looking at the loan detail for a specific loan, and I am wondering what loss given default is? How is the loss given default calculated for loans that don’t have collateral?
Fair Lending – Redlining and the Redlining Ratio
Redlining refers to the illegal practice of refusing to make loans or imposing more onerous terms on borrowers because of the racial, national origin, or other prohibited basis characteristics of the residents of a subject neighborhood.
Four Strategies to Grow Credit Union Membership
With a growing number of new competitors entering the financial services space combined with a bevy of new regulations and their subsequent compliance costs, credit unions are discovering that traditional membership growth strategies may not be enough for long-term sustainability.
Dear Hilary – Helping with Examiners
Dear Hilary, A few weeks ago, Derrick wrote about the “3 Best Practices to Prepare for Your Regulator Examination.” He made a suggestion for the minimum reports we should be running, but is there any way someone could help us get prepared for the examiners and help us run reports?
3 Risk Management Strategies Every Credit Union Should Employ
Trying to ensure safety and soundness is not as easy as it seems given the litany of risks that credit unions face on a daily basis. Regulators have stepped up their assessment of scenarios that can potentially bruise and even kill areas of operations. To help minimize risks, credit unions should...
Assessing Your Fair Lending Risk
In most things in life a complete and honest assessment of a situation is a good place to start. Businesses and others use SWOT analysis to identify their Strengths, Weaknesses, Opportunities, and Threats. The military uses a GRAT, a Ground Risk Assessment Tool, to aid decision making for ground...
How Member/Customer Analytics Can Impact Your Bottom Line
More so than other financial institutions, credit unions’ health depends on the choices made by consumers who use their products and services. Whereas banks can solicit supplemental capital freely, engage in speculative real estate deals, concentrate their holdings in business lending, and gen...
Producing Irresistible Reports in an Unsexy Industry. Loan Portfolio Reports For Management That Get Read!
For years, loan portfolio analysis was churned out using Excel features like vlookups and pivot tables, but that’s largely changed due to lenders needing more robust analytical software platforms.
Loan Portfolio Data: What to Look For in Your Analysis
Sometimes, to make sure you’re taking steps forward, it helps to look a long ways back. Consider this passage from an Office of the Comptroller of the Currency (OCC) guide on managing loan portfolios: “If a bank lacks adequate data on each loan or does not possess a system to ‘slice and dice’ th...
Dear Hilary – CRE Stress Testing
Dear Hilary, I noticed you have a CRE Stress Test report. What is required to ensure this report has good numbers?
Managing Lending Growth: 5 Strategic Investments Your Team Can’t Live Without
Fueled by a surge in auto, credit card and other unsecured loans, credit unions added $10.2 billion in loans in June, which reflects a 10.9% year-over-year increase — the fastest growth in history, according to CUNA Mutual Group.
Why Small & Mid-Sized Credit Unions Cannot Live Without Analytics
The examiner sat across the desk from me, polite but persistent. “How do you know?” was the question he kept asking. We were discussing our Allowance for Loan and Lease Loss (ALLL) account. “How do you know your balance is sufficient? How do you know your methodology is adequate? How do you know?...
7 Key Customer Analytics Metrics You Should Be Reporting On
What characteristics do our highly profitable and/or highly loyal customers share? That’s the question every organization needs to ask itself at every level of its operation, and at every juncture of its strategic planning process. Set your mission to both focus your attention on that existing c...
Be like Scott: How to Adopt a Risk Based Lending Model, Lessons from Scott Adkins CEO of SECUWA
Risk Based Lending is a tiered pricing model used to assign loan amounts, rates, and fees based upon borrower’s ability to repay within each tier level. Most lenders have their own methodology to determine each tier, using such factors as credit score, debt to income, job history, among other rep...
7 Unexpected Uses for Lending Analytics
Did you know that Play-Doh originated as a wallpaper cleaner, to remove the stains produced by coal-powered furnaces?
Dear Hilary – Determining Race in Fair Lending
Dear Hilary, I am trying to understand the Fair Lending reports. Can you clarify for me how exactly Visible Equity is able to determine the race of a borrower?
5 Loan Portfolio Metrics your Analysts are Missing by not Combining Your Data in One System
“Our lives are defined by opportunities–even the ones we miss,” Brad Pitt pronounces in The Curious Case of Benjamin Button, the 2008 movie in which he nails the peculiar lead role. There’s much truth in that statement, whether you place the focus on your personal or professional life.
Thinking of Making Changes to Your HELOC Portfolio? Read This First.
With house prices making a comeback across the United States, many borrowers are again seeking to extract equity from their homes through home equity lines of credit (HELOC’s). Consequently, many financial institutions have seen pronounced origination increases in their HELOC portfolios. These tr...
Six Things to Look For in Loan Management Solutions
Selecting the right loan management solution can be an imposing task. Maybe you’ve come to recognize the power of analytics, and decided to make the leap from a manual, paper-based system straight to a modern platform, but the complexities of that jump have proven paralyzing.
Using Application Analytics to Approve More Loans
Veteran salespeople will tell you that while it’s never easy to close a deal, the hard part is getting someone to even consider making the deal in the first place.
Financial Institutions See Growth in Mortgages Despite New CFPB Regulation
Financial Institutions have seen a surge of interest in their mortgage products in recent years. According to CUNA data reported by Credit Unions Online, credit unions have experienced a 34 percent increase in mortgage loan interest after years of posting anemic growth. The trend is supported by...
Dear Hilary – Saving Filter and Groups
Dear Hilary, What is the difference between a saved filter and a saved group?
Dear Hilary – Missing Webinars
Dear Hilary, I really enjoy your weekly webinars, and there are a few of us over here that watch them every week. I am having trouble seeing the schedule for the upcoming webinars. Can you tell me when it will be posted?
Dear Hilary – Data Changes
Dear Hilary, I loaded my files a couple of days ago, but it does not look as though any have loaded. I can see the files do not have an Implemented date nor does it have a check in the mapped column. When can I expect the data to be loaded?
How Analytics Helps MountainCrest Credit Union
Analytics are an important asset to any size financial institution, but are especially critical for smaller credit unions because they have to keep up with the big players in the credit union industry. They are expected to absorb the same costs, provide comparable credit risk reports, and manage...
How to Use Multi-Variate Linear Regression for Loan Analysis
Much has been written about the increasing importance of data analysis in lending. While it shouldn’t replace years of industry experience, such an approach can provide very useful insights when used in conjunction with prior knowledge for loan analysis.
Using Conjoint Analysis for Better Lending Decisions
Just as sports franchises have learned to use data analysis to assign values to skills that had been difficult to judge previously, financial institutions now can discern the most and least productive aspects of their loan portfolio, and act accordingly.
Dear Hilary – LTV Definitions and Calculations
Dear Hilary, Can you explain the new definitions of Loan to Value to me? I am also trying to validate the LTVs on some of my residential loans in Visible Equity to what I am calculating internally. How does Visible Equity calculate LTV?
How to Proactively Manage Risk of Credit Union Loans
Over the past few years, credit unions and other financial institutions have been hit with a number of new regulations targeted at managing risk within the loan portfolio. Among them, the Consumer Financial Protection Bureau’s revamp of mortgage rules, including how the loans are serviced and dis...
Using Loan Portfolio Analytics to Generate Revenue as a Financial Institution
Loan portfolio analytics offer financial institutions incredible capability to create organizational efficiency, mitigate risks, and avoid compliance snags. But just as important, a robust program can do wonders to generate revenue.
Q&A from – The CECL Model and your ALLL Webinar
This last week Visible Equity hosted a virtual webinar on CECL and how it affects your ALLL. We had a huge turnout and would like to thank everyone for attending. During the webinar there were many questions that did not get answered. The answers to most of the questions can be found below. If y...
Why Credit Risk Modeling is Critical to a Credit Union’s Success
Managing credit risk has always been one of the most challenging facets of directing a credit union, because of its complexity and the ripple effect a well or poorly handled portfolio casts throughout the organization.
The Importance of Deposit Analytics and How to Report Them
A long time ago, in a financial services environment far, far away, people once received measurable interest on their savings accounts — and often, even on their checking accounts.
Why Financial Institution Executives Who Adopt Analytics Will Win
It’s been a dozen years since renowned author Michael Lewis chronicled baseball executive Billy Beane’s revolutionary use of data analytics, and the volume of “Moneyball” spinoffs has grown into a cottage industry akin to the (Fill in the Subject) for Dummies series.
Are your Current Methods for Loan Portfolio Analysis and Customer Analysis Costing You Money?
Loan portfolio and customer analysis serve several purposes in order to protect a financial institution’s bottom line and generate revenue. Failing to have the right type of analytics strategy in place can have costly consequences.
Dear Hilary – Not Reported Credit Scores
Dear Hilary, I am looking at a Concentrations / Grading report and looking at the original credit score. My question is, why is the report showing some loans as “Not Reported”.
How to Build a Loan Portfolio That Drives Revenue and Mitigates Risk
Many people have reflected on the underlying psychological differences between those who prefer cooking over baking, and vice versa.
Customizing the Lending Experience for Your Customers Part 2 of 3
In the first part of this series we talked about how you can identify the right product for a customer by organizing your customers into financial states. In this article we focus on how to identify the right time to present offers to your customers.
6 Methods That are Helping Lending Institutions Across the Country Drive More Loan Volume
Not long ago, in the midst of a long conversation that could’ve taken us down a woe-is-me path about today’s difficult lending environment, a credit union leader sat back and smiled. “We can sit back here and crunch numbers all day,” he said. “But the fun stuff is figuring out how to frame loan...
Filling The Gap: What Examiners Really Need From Your Loan Portfolio Analysis
The full weight of the regulatory layers added since the financial crisis have been taking a toll on credit unions, say many industry leaders.
Optimizing Your Lending For Every Stage of the Loan Cycle
From application to loan servicing, sound decision making and speed are important considerations for credit unions no matter the size. With both revenue and profit margins being squeezed by competition and legislative reforms, each customer contact should produce the best possible return.
3 Tips to Avoid Being Overwhelmed by Big Data in Loan Portfolio Analytics
With the huge investments being made on big data throughout the business world — and the financial industry, in particular — it’s easy to see why organizations feel pressure to keep up with the Joneses.