Teachers Credit Union learns about automated processing

Teachers, like their students, get the bulk of the summer off work, but the credit unions that process their loans aren’t so lucky.

They may have to work much harder, in fact, since the summer is a peak spending period for teachers, says Beryl Roberto, president and CEO of Hamilton, Ont.-based

Teachers Credit Union (TCU).

“In the summer, teachers have two months off,” she says. “The ones that aren’t travelling might be doing home renovations.”

Faced with a cumbersome and time-consuming approval process, Teachers Credit Union went looking for a software package that would streamline loan approval and make for a less-harried lending officer during those peak periods. TCU manages approximately $250 million in assets held by 14,000 members.

Aiming to install the system in September or October, Roberto hopes to replace an increasingly outmoded process. “Right now we have a manual process that is absolutely horrendous,” Roberto says.

Ultimately, TCU, a credit union that has been serving educational employees in Hamilton and Brantford for 65 years, chose ProLender, a web-based loan origination solution from Toronto-based HomeBank Technologies Inc. (HTI). This, along with a recent sale to Milton, Ont.-based Prosperity One Credit Union, has brought the number of sales of ProLender to 75 across Canada.

HTI has made serving credit unions a specialty — a market of 600 institutions that hold up to $60 billion in assets and constitute 10 per cent of the Canadian banking market.

Credit unions are especially popular in British Columbia where HTI CEO Brian McCaw estimates as much as 40 per cent of Canada’s Credit unions reside, including HTI customer Envision Financial which, with assets of $2.2 billion, is Canada’s third largest credit union.

Even though they perform the same function of larger financial institutions, credit unions must operate on much tighter budgets. “Credit unions need to compete with banks in the marketplace,” says McCaw. “Yet they don’t have the same sort of financial resources when it comes to IT.”

And significant resources are required to master loan origination, a complex bureaucratic process involving numerous third parties including insurance companies, credit scoring, credit bureaus, lien registries and others. HTI’s solution has been to develop a single product that can then be sold to multiple institutions. “Therefore they can have the same kind of sophisticated tools the big banks have, at a fraction of the cost,” McCaw says.

Where in the past, manual processes or numerous programs were required to process a loan, ProLender unifies the procedure. Web-based, ProLender uses XML technology to interface with the numerous third parties required to process a loan. “With our system you enter the information once and it flows through to all the third party providers,” McCaw says. “There’s no need for re-keying and it minimizes the chances for mistakes.”

Based on three-tier architecture, ProLender requires little in the way of infrastructure to set up, McCaw says. “All the credit union needs is some security certificates and a standard browser to use it.”

Having made a significant foray into the Canadian market, HTI is looking at markets abroad, including the United States and Australia. The company has also initiated a credit risk services division to sell loan decisioning software to help credit unions make better lending decisions.

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