How LOS Efficiency Helped Elevate Trailhead CU to New Heights
When Justin Olson joined Trailhead Credit Union in 2013 as vice president of member services, the credit union was facing an uphill climb.
With a loan-to-share ratio of just 59 percent and on a steady monthly decline, the $120M credit union was originating around $1 million per month in 2013. That wasn’t enough to improve that key measurement, and the Portland, Oregon credit union was losing business to lenders who were providing a better customer experience.
Trailhead had big plans to rebrand the credit union, recruit new members and grow loans. However, Olson said inefficient processes stood in the way of that growth and his team’s ability to provide excellent member service.
In particular, the loan process was extremely inefficient. Three different platforms were required for employees to take a loan from approval to funding. “They had to do the application on a worksheet, hand deliver it to an underwriter for approval, then go back to their desks, type all the loan docs by hand, print them out, get signatures and fund the loan by right clicking,” Olson recalled. “It was a very long process. If you were doing it start to finish, even as quickly as possible, it was 45 minutes to an hour.”
When Trailhead went shopping for a new loan origination system, Olson was disappointed to find that most solutions were too expensive for his shop. Then, the credit union’s CU Direct representative introduced him to Lending 360.
CU Direct’s LOS was a perfect match for the credit union’s growth goals. The biggest benefit has been Lending 360’s seamless integration with Trailhead’s Symitar core, which has drastically improved efficiencies. “Now, staff can click export and the loan is automatically onboarded onto our system,” Olson said. “No more manual entry. Not only is the process more efficient, it’s also cleaner. After all, the more steps involved, the more potential for errors.”
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Since implementing the system, Trailhead has increased loan originations by 79%, to nearly $2 million in new loans each month. And, the credit union’s LTS ratio has improved to 70%. As a result of Lending 360 and other process improvements, membership has climbed from 4,800 members to nearly 9,000 in just five years. Olson said he wasn’t necessarily thinking that the LOS would grow new members, but the system’s new account opening platform has made the new member process a more efficient experience.
It’s also made it a better experience, he said, because the efficiencies have allowed staff to take a breath while processing new members and their loans and allowed them to devote more time to delivering excellent service.
Trailhead employees also like the system’s layout. “We use Outlook and Microsoft, so Lending 360’s format is very familiar and consistent with everything we do,” he said.
The credit union has customized Lending 360’s workflows, automation, decision engine and cross selling. In fact, Trailhead has customized the system so much, it even uses the consumer loan platform to process real estate loans. The credit union uses the LOS to process 7-year balloon mortgages and 15-year fixed refinances.
The flexibility of the LOS has worked well with Trailhead’s local niche market: floating home loans. Floating homes are popular in the Pacific Northwest because they offer affordability and relief from urban space restrictions and rising sea levels. Floating homes aren’t the same thing as houseboats. They’re connected to city water and sewer systems, and even though they can be moved, they are permanently moored. That means they can be financed with traditional real estate loans.
From July 2015, just before launching Lending 360, through May of this year (2018), the credit union has grown its floating home loan portfolio $9 million.
About 23 percent of Trailhead’s outstanding loans are floating home loans. Another 14% of outstanding loans are 1st mortgages, with 20% in vehicle loans, 6% in HELOCs and the remaining in unsecured.
With such a strong emphasis on real estate lending, it was important for the sake of efficiency that Trailhead was able to utilize Lending 360 to process a significant percentage of its home loans.
With improved efficiencies in place, the credit union is not only lean, it’s also a force to be reckoned with in its market, even when going up against large lenders. “We don’t have all the layers of approval that bigger shops do, so we are actually more efficient,” Olson said. “We’ve received a lot of referrals because members liked how quickly we got back to them and processed the loan. And, because staff isn’t manually entering loan information into the system, they can provide more responsive service to our members.”
Olson also said he appreciates CU Direct’s CUSO structure, which creates a culture of partnership, rather than a typical vendor to customer relationship. Feedback from credit unions is welcomed and used to improve the system, he noted.
Today, the credit union is experiencing 73 percent loan-to-share ratio and has seen its assets grow from $95M in 2013 to $120M in 2018.
Now that Trailhead’s lending and new account process is more efficient, the credit union is reviewing its loan products with an eye toward streamlining its offerings to allow for expansion. Trailhead is also gearing up to implement online eDocs imaging, increase its indirect lending, revamp its HELOC program and launch a balloon auto loan program.
The success that Trailhead has had, and the growth expectations the credit union has for the future, exemplifies the role that the right LOS plays in improving lending programs. “Lending 360 has exceeded everyone’s expectations,” Olson concluded.