Municipal Credit Union is a $2.7B, 425,000-member credit union with a $350- million auto loan portfolio.  The credit union primarily serves city, state and federal government employees living or working in and around New York City, as well as healthcare and education employees in the NYC metro area.

A few years ago, its roughly 100 repossessions per month required the attention of four full-time employees. This group relied mostly on paper files, with very few digitized documents. Despite their best efforts, the process was cumbersome, inefficient and prone to human error.

“It required a lot of man hours, because we had to be perfectionists about the way things were handled,” said John Parrinello, the credit union’s vice president of collections and loss prevention. “That was for the sake of our members and the sake of the auditors. We knew we needed a paperless solution.”

Automating the Repossession Process

When Parrinello was approached by State National Companies, his current collateral protection insurance (CPI) provider, to pilot its new CARS (Claims Advocacy & Recovery Services) program, it sounded too good to be true. CARS promised a totally outsourced, totally digital solution for the management of the entire repossession process.

Greater Efficiency from Day One

“The efficiency we gained through our use of the CARS program is amazing,” said Parrinello. “I went from four employees handling repossessions – including things like attending auto auctions – to just one. And that person’s job is simply managing our end of the CARS program.”

Parrinello was quick to point out that he didn’t eliminate any staff. Instead, he was able to move the other three employees into new roles as collectors, where they can further benefit the credit union by helping reduce delinquencies.

“We’ve virtually eliminated paper because absolutely everything is online,” added Parrinello. “We never have to worry about a document being misfiled because it’s all right there at our fingertips. If an auditor asks for a document, we just click a button.”

Greater Efficiency Means Lower Costs

According to Parrinello, the increased efficiencies of the CARS program have resulted in substantial savings compared to the old, manual method. “Beyond the staff reduction, picking up cars is much faster, and selling repossessed vehicles is much faster,” said Parrinello. “I don’t have to waste time sending employees to auctions, and we find that the sale amount is higher. All that adds up a significant reduction in repossession costs.”

Municipal Credit Union also makes extensive use of the CARS online auction website, which is available to the public 24/7. “Anyone can go online in the middle of the night and make a bid if they want,” said Parrinello. If the bid meets the credit union’s minimum amount, the terms of the deal can be finalized with the new buyer the next business day. Parrinello added that the auction site is especially useful for disposing of high-end vehicles, because dealers from a broader geographical range often bid on highly sought-after vehicles.

The Best, Then the Rest

Parrinello said that since deploying the CARS program, he’s been approached by many vendors with competing solutions, and he’s looked at them all as a matter of due diligence. However, he has yet to find a solution that comes close to the CARS program in terms of efficiency and effectiveness. “The CARS program is simply better than all the others, by a long measure,” he concluded.

The CARS program is available to all State National CPI customers. With more than 40 years’ experience in all aspects of CPI – claims, repossessions, skips and all related insurance issues – State National is positioned to remain the leader in this field. The CARS program can be seamlessly integrated with any lender’s existing processes. For an expanded version of this case study, please email info@statenational.com.