Rescuing troubled loans

These credit unions are taking a warmer approach to collections to help struggling members get debt repayment back on track.

Petitioning delinquent debtors for payment is a tough business, but many credit unions see that as a last resort and look for friendly ways to help a struggling member.

“Remediation efforts are often successful and gratifying,” says Ashley Kemp, AVP/manager of lending and collections at $500 million Tucson Federal Credit Union, Tucson, Arizona. “We had one longtime member who had a mortgage and credit card with us,” she recalls. “He was regularly making his payments until he lost his job in 2016 and his household income was cut in half. It took him over a year to find a new job, and he started skipping payments.

“We noticed, investigated and opened continuous communication with our member through phone and email. We discovered that he also had a car loan, a title loan that was not on his credit report, so that added to the challenge,” she explains. “He really wanted to keep his house, so we delayed the foreclosure process.


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