Credit Union Service Alliance Group helped local credit union with collections.
By Fred
Tuesday, November 24, 2009
"Cusag" Credit Union Service Alliance Group helped Northern Lights Credit Union with their collection services.
Northern Lights originally contracted with a collection agency on a one-third contingency payment basis. In search of a lower cost solution, St. Arnauld then hired Cusag LLC, in which Northern has since invested. What's different about Cusag, based in Langdon, N.H., is that collection services are charged by the hour. "You might think the hourly rate is more expensive than a contingency fee, but it's not," says St. Arnauld.
Before contracting with Cusag, delinquencies at Northern Lights were 0.85%. Current delinquencies are 0.54%. "The numbers speak for themselves," St. Arnauld says.
Cusag charges $35 an hour including mailings and an 800 number. Calls from members are answered with the credit union's name.
Cusag handles collections for four credit unions, adding a new client every 45 days, says Cusag CEO John R. Revilla. The firm does not use a dialer, but taps into the credit union's computer system to access account information. Monthly reports are generated on the status of delinquent accounts and projections, along with recommendations on workout situations and charge-offs. "The key is to control costs," Revilla says.
Though outsourcing may be picking up steam among small credit unions, the big players aren't necessarily ready to change their collections formula.