How to Use Multiple 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.
Year in Review: Our 5 Most Popular Posts of 2015
Another year has come and gone, and we’ve compiled our five most popular posts of 2015 according to our readers! Whether we were discussing new credit union regulations, auto loans, or general lending institution advice, our blogs in 2015 were geared towards educating our readers. Below are...
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.
Dear Hilary – File Reconciliation
Dear Hilary, The webinar this week was great! During the webinar, you mentioned making sure we reconcile our files each month. Can you remind me where to go for that?
Nine Ways to Increase Auto Loans for Your Credit Union
Every month seems to bring a new headline about the continued surge in vehicle sales, even among segments that took a monumental beating during the recession just a few years ago. The latest, from the International Business Tribune: “May 2015 Sales Shatter Forecasts as Americans Flocked to Truck...
11 Ways to Target Millennials Using Social Media to Group Your Credit Union Membership
What does Malcolm X have to do with credit unions turning more millennials into members? Well, nothing, at least on a personal level. But consider a line the influential activist issued during a 1963 speech that some of you children of the ’80s might more easily recognize as the opening salvo of...
Dear Hilary – Determining Primary Borrower
Dear Hilary, I am wondering if you could tell me how the primary borrower is determined in Visible Equity? We have some loans that have multiple borrowers.
Understanding Demographics in Your Credit Union Membership
The first step toward successfully serving your customer is getting to know your customer, and few industries compare to credit unions when it comes to relationship-building. On a personal level, that is — which is why credit unions consistently rank at or near the top of cross-industry customer...
5 New Regulations That All Credit Unions Need to Be Aware of This Year
It’s never easy to overhaul a time-honored practice, even if that convention might be flawed and the solution promises to reduce paperwork for all parties involved. Case in point: The Consumer Financial Protection Bureau’s pending Integrated Disclosure Rule — a.k.a. “Know Before You Owe — which...
From Interest to Fees: Fresh Strategies to Drive Credit Union Revenue Using Analytics
The increasing reliance on analyzing large volumes of data is becoming more and more prevalent across a broad spectrum of verticals that seek to maximize profits and deliver better services to their customers.
Seven Keys to Sustain Credit Union Membership
Last summer, the credit union movement hit a major milestone, with more than 100 million memberships nationally. Credit unions regularly outperform banks on fees, rates, and service, according to well-respected national surveys. And the big banks’ reputations continue to suffer from their lack of...
Targeting Millennials in Your Lending
Who are millennials? That depends on who you ask, but generally they are classified as those born between 1977-1995. Currently, this group makes up approximately 24% of the population, they are heavy users of social media, are more diverse than any previous generation, make an average annual sala...
Five Ways to Increase Accuracy In Your Loan Portfolio Analysis
In order to properly manage their loan portfolio, financial institutions must have an accurate and effective system for loan portfolio analysis. For many organizations, this can be complicated due to lack of time, inaccurate or missing data, and lack of statistical know how.
How to Mitigate the Inherent Risk in C, D and E paper Lending
The ranks of the underbanked and unbanked grew considerably during the Great Recession, when the megabanks severely tightened access to credit for many who most needed it.
Dear Hilary – Seeking CECL
Dear Hilary, Just want to ask about Visible Equity’s plan regarding CECL. We would like to start gathering information as soon as possible so preparation and implementation will be less complicated. Please advise.
Dear Hilary – VE Conference
Dear Hilary, We were not able to attend the conference this last year. Is there going to be a National Conference in 2016?
Is Residential Real Estate Slowing?
According to S&P/Case-Shiller, nationwide home prices posted a 4.7% annual gain in November 2014, compared to a 10.7% annual gain in November 2013. In other words, while home prices continue to show gains, the rate at which they are in...
Peer Analysis: The Importance of Benchmarking Against Peers
Is your credit union successful? As successful as it should be? As successful as it can be? Sure, the balance sheet will tell you when things clearly aren’t going well. Similarly, you don’t need to be a CFO to figure out when you’re on a roll.
FASB’s Proposed Changes to Accounting for Credit Losses Won’t be That Big of a Deal
I may be the only one with this opinion, but I don’t think the changes the Financial Accounting Standard Board (FASB) is proposing to how financial institutions account for credit losses will be that big of a deal. Most prognosticators are predicting major disruptions in operations, massive incre...
Dear Hilary – WAIR Calculations
Dear Hilary. I came across the term “WAIR” in Visible Equity. Can you clarify what it stands for?
Dear Hilary – Grade Method Comparison Report
Dear Hilary, I’ve been working in the Visible Equity system for some time now and I find that I’m not certain what to make of the Grade Method Comparison report. Can you tell me how I might use this report?
Fair Lending Training – Laws and Prohibited Basis Groups
Fair lending is a hot topic among most financial institutions in particular those regulated by the CFPB, NCUA, OCC, & FDIC. Fair Lending poses new challenges for financial institutions not only in completely understanding the laws but also in knowing how to comply with each of the regulations. Th...
Customizing the Lending Experience for Your Customers, Part 1 of 3
“The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.” – John Russell, Harley Davidson
Dear Hilary – Fair Lending Interest
I need help interpreting the Fair Lending Pricing Discrimination report. When filtering to Consumer Credit Cards, it shows an Average Interest Rate of 5.34% and an Average Expected Interest Rate of 5.52% (Data Date of 12/31/2014) in the category of a certain ethnic group. Our actual credit cards...
Dear Hilary…Credit Score Definitions
Welcome to “Dear Hilary”. As we welcome in 2015, our team at Visible Equity is looking at ways we can make your life just a little bit easier. In fact, that is what my job is all about! One of the best parts of my job is that I get to interact with you, our clients.
What is Credit Risk Modeling?
The financial crisis triggered a paradigm shift in financial institutions’ assumptions about credit risk, centering around the manner in—and frequency at—which they monitor it, and the value they place on proactively influencing it
Dear Hilary – Data Cleanup
Dear Hilary, I was reviewing the “Loan Data Completeness” report. The report is great for identifying missing data, but unfortunately, we have a lot of cleanup to do. Do you have any suggestions for where we should start?
Dear Hilary – Racial Distribution
Dear Hilary, I have questions about the Fair Lending module, specifically the Pricing Discrimination Report. I believe the report is inaccurate in the racial distribution, as it is showing over half of our members are white, but in our area, we actually have mostly Hispanic or Brazilian members....
How to Prepare for a Fair Lending Risk Assessment
From changes to the Real Estate Settlement Procedures Act to updates within Regulation Z, credit unions have much more to comply with when it comes to their fair lending practices.
Six Ways To Expedite and Improve Loan Analysis
One of the most important functions in a financial institution is loan analysis. Historically, financial institutions were only able to analyze their loan portfolios through a series of databases and spreadsheets. This painstaking process could take months and had limited outputs.
Fair Lending Continues with CFPB Considering Changes to HMDA Data
Fair Lending and HMDA Data: Today the CFPB announced new information they are considering requiring lenders to collect for Home Mortgage Disclosure Act (HMDA) data. This announcement is one of many that the CFPB has released in regards to their increased focus on Fair Lending regulations. So what...
Painting a clearer picture – Insights on Data Visualization
Did you know that Twitter records 6,000 “tweets” every second? That equates to 350,000 tweets sent per minute, a whopping 500 million tweets per day and around 200 billion tweets per year. Did you know that Google instigates 40,000 search queries every second on average, le...