New Loan Origination Technology Helps Vantage West Drive Speed and Efficiency Across the Entire Lending Process

The $2 billion Vantage West Credit Union is one of Arizona’s largest financial institutions, serving nearly 157,000 members. Lending has driven its strong and steady growth; according to NCUA financial reports, Vantage West’s key financial measures show it has led its peers in nearly every lending category, even through the Great Recession.

In fact, in 2010 when other credit unions were still recovering from recession losses, Vantage West was focused on the future, participating as a beta tester for CU Direct’s revolutionary Lending 360 consumer loan origination system.

“Our previous platform had peaked out and was limiting our ability to grow our lending portfolios,” said VP of Consumer Lending, James Waskin. “We needed a system that could move us into the next generation of lending.”

Specifically, Vantage West was looking for a multi-institutional and multi-user platform that could integrate with other partners, such as the Mountain West Credit Union Association.
“Our short-term goal was to have both our direct and indirect departments using the same LOS,” Waskin recalled.

The credit union’s long-term conversion goals were to take advantage of tools the new LOS had to offer that could increase its loan volume, improve its profitability and offer its members first class loan products.

After a successful beta test, the credit union met its short-term goal when it took its direct lending channel live on Lending 360 in October 2012. Vantage West was already surpassing peer averages in lending at that time, with a 95.25% loan-to-share ratio, 6.29% average loan yield, 1.40% ROAA and 13.15% annualized loan growth. However, to maintain that level of success, the credit union turned to Lending 360 to improve its processing speed, efficiency and consistency across the entire lending process.

The consumer LOS’ robust auto decisioning, which allows Vantage West to set its own criteria, provided the biggest boost. Waskin observed that system decisioning and automation have allowed the credit union to improve turnaround times and approve deals after hours. Specifically, on Mondays or days that followed a holiday, turnaround time was improved by 50% thanks to auto decisioning because there were fewer applications pending.

And, when Vantage West set decisioning parameters for high FICO and low FICO applications, auto decisioning and automation improved underwriting speed and consistency. That freed up time for underwriters to evaluate applications that were in the middle of the spectrum, which allowed them to make even more consistent and higher quality loan decisions.

Higher loan volume and better underwriting had a quantifiable effect on results, producing lower losses and increased profitability for the credit union. “In the last 12 months, we have experienced a decline in our net charge off rate of approximately 20 basis points,” Waskin noted.

Lending 360 also allowed Vantage West to achieve other operational efficiency goals. “On the direct side, we have been able to centralize our funding back office versus at the branches. This allows us to provide a better member experience through consistency, and allows our financial representatives more time to focus on providing members with the full array of financial services we offer,” Waskin said.

Vantage West recently completed a system optimization review in the first quarter of 2019, he added. The credit union used review data to enhance direct loan auto decision rules in March and immediately increased the percentage of loans decisioned by the system from 6% to 32%, further driving increased efficiencies in direct lending.

The credit union found that the member experience has also been improved with the use of the system’s online loan application and the ability to keep members up to date on their loan application and funding status via email.

The LOS also allowed Vantage West to create its own version of CUDL’s SmartFund program, which allows auto dealers to digitally transmit all loan documentation to participating CUDL credit unions, simplifying the loan process and speeding up loan funding.

For dealers that don’t upload loan documents digitally and still send the credit union contract packages, Vantage West has created a process in Lending 360 that allows employees to quickly scan the contract and “SmartFund ourselves,” Waskin said, making the process quicker and more efficient for both the credit union and those dealers.

In fact, despite all the efficiencies gained through automation, Waskin notes that the system’s flexibility was the aspect he finds most appealing. The LOS has allowed Vantage West to customize application workflows, queues and decision rules to match the various loan products it offers members. And, the LOS is so user friendly, Vantage West is able to modify the system using an in-house administrator, without having to rely solely on CU Direct for system enhancements.

The learning curve wasn’t just minimal for IT employees; operational users also took quickly to the LOS. “The onsite training was extremely helpful in transitioning,” Waskin recalled. Benefits were achieved almost immediately, he continued. That created a positive reaction to the change, which he added was really more of a mental adjustment than a learning curve. Since the conversion, new employees who have joined Vantage West from other financial institutions have also been able to quickly learn the system.

Lending 360’s reporting capabilities have also defended Vantage West’s market position as one of Arizona’s top lenders, creating valuable trend reports it uses on a daily basis to adapt to current market environments.

Vantage West has doubled its assets since it first became a system beta tester in 2010, and as of March 31, 2019, reported more than $900 million in secured consumer loans, representing nearly 60% of its current loan portfolio. Financial reports reveal a profitable credit union that is growing market share and compares favorably to peers across the board.

“In today’s current environment, Lending 360 continues to meet our expectations and allows us to make changes to our loan products, decision criteria and process flows to meet our members’ needs,” Waskin concluded.