Prompt Collection Calls Lower Delinquencies at Florida CU

Space Coast Credit Union made a “quick” shift in its collections strategy, after starting off the year with an uptick in delinquencies, Gary Prager, vice president of consumer sales and investment services, told AFN.

The Palm Coast, Fla.-based credit union took note of increasing delinquencies industry-wide, Prager said, and when it started to see the same trend in its own portfolio, the CU took action.

“A lot of times in collections, you wait until the borrower gets to 30-days past due or beyond, and then you get really aggressive,” he said. “We looked at that and said, ‘That’s probably not the best philosophy.’”

Instead, the credit union, which had $1.6 billion in auto loan outstandings at yearend 2016, took a more proactive approach and instructed its collection team to consider different loan variables to determine which borrowers were more likely to default. Once borrowers were prioritized, Space Coast used its same dialer collection methods to “head them off at the path” before it was too late, Prager said.

“Most consumers are living from paycheck to paycheck, so if they get 60 days behind, how do they ever get caught up?” Prager said. “If we wait that long to even engage them, we’re doing a disservice to the customer. We’ve changed our approach, and we’ve really had remarkable results,” he said adding that the CU’s delinquencies are now more in line with its peers’ rates.