Faster funding equals more loans, according to America First Credit Union. The credit union, based in Ogden, Utah, with $19.35 billion in assets and more than 1.3 million members, is strategically focused on funding dealer loans faster than the competition, and they have a goal of funding all loans within 48 hours or two business days of receipt. Document Processing Automation (DPA) has been key to this success, reducing funding times and allowing them to manage payroll expenses and overhead more efficiently. The technology has allowed the credit union to nearly double the number of loans it funds in one business day.
Today, 45% of America First’s credit packages are funded on the first day, compared to only 23% before DPA. This automation has also reduced the number of loans taking more than 48 hours to fund from more than a third down to just 7%. These efficiencies deliver faster processing times allowing America First Credit Union to grow lending volume while managing payroll costs and overhead. Automating the funding process increased loan volume, requiring fewer staff. As a result, the credit union used normal attrition to reduce staff by 25%, from 28 to 21 full-time employees.
What is Document Processing Automation?
DPA leverages automated intelligence to apply a series of preset business rules, as well as some lender-specific rules, to evaluate data in the funding package submitted by the dealers. Once that process is complete, the system presents a clean, easy-to-read package to the loan funder, which expedites their functions and reduces the amount of time needed to fund each package. Additionally, DPA enhances accuracy by minimizing human errors that can occur during manual processing. This improved accuracy ensures that the data is consistently reliable, which is crucial for making informed lending decisions. DPA also fulfills quality control functions by identifying forms or documentation that might be missing and alerting lenders to potential discrepancies in the submission package. By catching these issues early, DPA helps prevent costly mistakes and ensures a smoother, more efficient loan processing workflow.
Megan Olsen, indirect lending manager at America First Credit Union, explains that the credit union funds dealer-originated loans across six states, creating a challenge because each state and dealer want to do things a little differently. Reshuffling the document stacking order of each file can be tedious and time-consuming. Olsen says that it is much faster and far less frustrating when every loan package contains documents that are stacked in the same order and, importantly, in the same direction or orientation. America’s First also set up rules in DPA to isolate the borrower’s income verification from the rest of the package. This promotes efficient review and resolution of any income discrepancies. The benefits of automation include the ability to identify errors up-front and provide a consistent evaluation of underwriting packages. At the same time, they uncovered internal inconsistencies within their own workflow, creating additional friction they weren’t even aware of at the time. By implementing DPA, they inadvertently identified this friction and streamlined their workflow, creating added efficiencies within their processes and among their team.
The efficiencies realized by the adoption of DPA aren't unique to America First Credit Union. Their counterparts at Utah Community Credit Union attribute a 30% reduction in processing time to DPA. Meanwhile, in neighboring Washington, Sound Credit Union has reduced the average loan processing time from 30 minutes to 15 minutes, a full 50% increase in efficiency. These efficiency gains—faster turn times and lower headcounts—are real and measurable. It is harder to quantify, but just as real are the positive effects on credit union staff morale. Credit unions that incorporate DPA in their funding process report significant improvement in their loan department job satisfaction and enjoyment of their jobs.
Document Processing Automation delivers big wins for credit union lending at a time when every minute counts. Speed and efficiency are the most obvious benefits, eliminating the need for mundane and repetitive tasks such as restacking files. The consistency of the loan funding process gives credit unions peace of mind, knowing they are reducing the risk of human error and uncontrolled variables while delivering a faster, more uniform, and further positive experience for the auto dealer that responds with loyalty and repeat business. For more information about Document Processing Automation, credit unions can contact Origence.
