Why the Easy Path Isn't Always the Wise Path
Written by: Lance Teinert
In early 2018 I joined CURevl
as its founding Chief Executive Officer. I came to CURevl with nearly 30 years
of education and consumer finance experience and a passion for helping students
and families improve their lives through the most affordable higher education experience
possible. As a credit union service organization (CUSO), CURevl works directly
with credit unions across the nation to develop products that are positive
yielding to the credit union and low-cost to the borrower.
In order to grow CURevl into
the CUSO it has become, we diversified our product offering very early in order
to build a foundation of credit union clients. One such product offering
included a referral program for both education finance and refinance loan
products. While we found success in attracting new credit union clients, we
also found that both CURevl and its clientele were losing control of the
application process and approval percentages. In some cases, we were not able
to obtain the identity of credit union members applying for these loans.
Just over a year ago we made
a strategic decision to no longer offer new referral programs to credit unions.
Instead, we offer full-service program that combines loan origination, loan
servicing and capital markets support that allows credit unions to sell their
loans before going into repayment. This lender experience is unique,
cloud-based, and highly turnkey for our clients.
Today, well over 1,000 credit
unions are under referral program arrangements that offer private student loans
to their members. The primary reason so many credit unions have signed up for
these programs is simple: it's the easy path. By signing up for a referral
program, the credit union essentially "checks the box" on student loans then
moves on. However, choosing the easy path does have its pitfalls.
Pitfall #1: The credit union
may literally be turning over its member to a third party that may sell
Pitfall #2: The credit union
may have no control over the underwriting of its members' private student loan
Pitfall #3: The credit union
may be giving up significant revenue opportunities by signing up for a referral
Before taking the easy path,
we invite you to re-think your potential offering and consider a full-service
solution in partnership with CURevl. Our team of experienced professionals are
highly skilled in product development, program administration and portfolio
management. And our commitment extends beyond just managing your program. We
also buy loans directly from your balance sheet, enabling you to manage
liquidity and mitigate credit risk.
For more information about
us, please check out www.curevl.com.