The Top 5 Biggest Lending Roadblocks for Credit Unions

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When your credit union processes a loan for a young family buying their first home or a retired couple downsizing for an empty nest, you want the process to go smoothly. Roadblocks can be major threats to that process and the long-term stability of your relationship with the borrower.

Left unaddressed, these threats can be the reason you become the blockbuster of the lending world, fading into memory instead of thriving in the digital era. With the right culture, people and technology in place, however, roadblocks can be overcome. Some may even serve as a catalyst for change and growth.

Eliminate Roadblocks While They Are Still Small

Have you heard things like this within your financial institution?

  • “Our process has always been like this.”
  • “That’s just how long it takes.”
  • “This is the way we’ve always done things.”

We’ve certainly heard them. Touring the country and speaking with hundreds of credit unions has exposed us to two kinds of lenders in the movement: those who simply accept the complex and slow-moving wheels of underwriting as a permanent reality, and those who believe it’s possible to transform that process for the digital world.
Whatever is slowing down your lending cycle needs to be eliminated, and fast. Chances are, those challenges are stopping you from competing in today’s dynamic lending environment.
Let’s dive into the five most common barriers holding back credit union lending teams, and explore what you can do to thrive in today’s ultra-competitive lending landscape.

1.  Document Management

Your members demand a wide range of loan options – from FHA to HELOC and everything in between. Each type of loan requires a mountain of paperwork made up of specific forms that change as regulation around consumer lending evolves. This often makes effective document management a daunting task for loan officers. As their frustration level rises, the credit union’s speed and efficiency decreases, potentially resulting in a poor experience for borrowers.

Managing Stress Through Automation in Credit Union Lending Technology

One click should be all your loan officers need to create a customized group of forms based on the loan type. This will reduce the amount of time loan officers need to devote to collecting the forms required for each loan, allowing them your lending team to concentrate on what is important: the premium, local service they provide to your members.

2. Required Approvals and Overrides at a Credit Union

Approvals and overrides from a manager are often a requirement dictated by internal procedures. In place to protect the integrity of the institution, the spirit of this step is solid. At the same time, it can create a roadblock in the process.

Remote Approvals and Overrides Provide Flexibility in the Lending Process

A remote approval or override feature, embedded as an option in your lending software, can keep the process flowing. A feature like this enables compliance while also maintaining the service levels borrowers expect.

3. Human Errors in the Lending Process

Errors are a reality in the lending industry, largely because humans are an integral part of the process. In fact, an MIT researcher who looked into the lending practices of a large credit union concluded “…one reason for bad loans is because loan officers are humans.”
Innovative lending software, electronic documents and e-signatures have simplified the process but there is still the potential a loan officer may miss certain information.

Automation Processing Makes Credit Union Lending Easy

The right lending technology allows lending management to designate certain fields as required. Doing so prevents a loan officer or lending team member from proceeding to the next step in the workflow until the required data has been entered. This addresses missing information in the moment so loan officers don’t have to discover the error later in the process, potentially derailing the timeline and inconveniencing the borrower. Having the right lending software in place ensures a first-class, seamless and speedy experience for both staff and borrowers.

4. Signature Requirements

Signatures have long been a roadblock in the lending process, and this roadblock has increased exponentially as the Internet and digital platforms have set new standards for how we communicate authorization. Borrowers expect flexible solutions that adapt to their schedules, not strictly to the lender’s.

E-Signatures and Mobile Security in Lending

Offering e-signatures for loan documents can completely eliminate one of the most time-consuming pieces of the loan process. Not only will your borrowers appreciate the respect for their time; loan officers will spend fewer hours chasing down borrowers to complete forms.

5. Slow Responses That Extend the Lending Process

Plain and simple, speed – or the lack thereof – is the biggest roadblock facing credit union lenders today. Digitizing the lending process has become an expectation from members. This is not only for quickness, but also convenience. As everything from buying groceries to paying bills becomes easier in a digital environment, financial consumers expect similar experiences from lenders.

The Need for Speed in Credit Union Lending

Speed, efficiency, security and convenience are the perfect ingredients for an exceptional member experience. The digital realm provides a unique catalyst for speed in today’s lending world. It’s may be just your credit union needs to maintain the local service your borrowers expect and deserve.

Multiple Roadblocks, One Solution: LenderClose

We know that as an incumbent lender in a fast-changing and increasingly competitive market, you are forever challenged to do more with less. Approvals, lightning fast document management, reduction of human errors, instant signatures and the speed to compete is what you will find when you integrate a platform like LenderClose into your lending process.

Ready to Clear Away Those Roadblocks?

If any of these roadblocks sound familiar, we would love to have you book a demo today. LenderClose will help you put these barriers in the rearview mirror. Borrowers in your community are right now searching for the perfect lender. Come talk with us about how you can become exactly what they are looking for and more.

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