Deciding how to safeguard your credit union’s loan portfolio can seem like a complicated decision, and it can be tempting to go with the option that seems easiest on the surface. However, as with most things in life, there’s a lot more underneath it all than meets the eye.
Why a Tracked Portfolio Protection Program Is Better for Credit Unions
Lack of member insurance tracking has some risks that aren’t always obvious at first glance:
1. Increase in uninsured collateral and risk to the credit union. Tracked programs encourage non-compliant members to obtain their own insurance and the right kind of insurance—and to keep it in force. Considering that an average of 1 in 8 drivers in the U.S. is uninsured—reaching as high as 1 in 4 in some states—lenders whose programs don’t have a tracking component often find that the number of uninsured members within their portfolio increases because there is no mechanism to resolve deficiencies.
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