BIRMINGHAM, Ala.-Thanks to the recession, credit unions are now much better mangers of bankruptcies, while underwriting is even more sound.

That's the observation of Dennis Dollar, principal at Dollar Associates, who sees CUs now having more well-trained underwriters and sometimes expanded underwriting staff, which bodes well for the future of the industry, he believes. "We even see more credit unions using third parties to validate their underwriting."

But an even bigger benefit of the recessions, suggested Dollar, is that numerous credit unions have learned to manage bankruptcies as a book of business. "Banks have always done this, but credit unions tend to view bankruptcies as a loss and are thankful for whatever recoveries they get."

Over the last few years Dollar has become aware of a number of credit unions outsourcing bankruptcy management and are seeing dramatic improvement in recoveries. "These third-party companies can handle bankruptcies more efficiently, plus they know the courts, the lawyers, and all their proclivities. They get results."

Dollar added that many times credit unions face tracking down a member that's out of state and therefore lack the resources to reach beyond their own borders. "These third-party companies often have resources across the country."

Subscribe Now

Authoritative analysis and perspective for every segment of the credit union industry

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.