3 minutes
At $94 million Campco Federal Credit Union, Gillette, Wyo., we searched for many years for the perfect loan scorecard to track lending trends. Since resources were too limited to outsource the task of developing a scorecard to a third party, our credit union set out to create it internally.
The loan scorecard started with basic, limited categories, such as credit grade, number of new loans per month and total loan balances. The goal was to create a visual aid to simplify complex data to present to everyone in our organization. Our team agreed that creating and continually upgrading a loan scorecard was a useful means of supporting development of a long-term lending strategy. By doing so, we could better track trends and member demographics and reveal the strengths and weaknesses of our lending products and processes.
Over the years, Campco FCU has molded the loan scorecard to be much more complex and multifaceted. (A recent version of it is available on CUES Members Share.
Data is retrieved and updated on a monthly basis to keep the scorecard as current as possible. The toughest part has been deciding what to include. Currently, metrics found on our scorecard include credit score, loan volume, portfolio loan types, new loans per month, run-off, delinquency and loan balance. This information is distributed to the board of directors, supervisory committee, senior management and frontline staff. Ultimately, everyone plays a role in our lending success, so we want to keep everyone posted on our progress.
We’ve discovered the most effective way of using the scorecard is by incorporating visual depictions, allowing all members of our team, across varying levels of financial know-how and lending experience, to understand the data trends. It has also been beneficial to include ratios, which makes it easier to compare to peers.
Before we launched the scorecard, we recognized there was a communication disconnect between management and frontline staff. Sharing this information on our lending business has increased transparency and buy-in. Now managers can more effectively educate staff about the long-term vision and the impact of day-to-day operations. At the end of each month, our staff can readily see what they contribute as a team. That is quite powerful.
Recently managers have noticed our lending team taking relationship building with members to the highest level. This is because they have learned to step out of their comfort zone and avoid being “order takers.” Instead, loan officers focus on daily, monthly and yearly goals that help them proactively seek out opportunities to increase cross-selling. Management also uses the scorecard to educate the board of directors and supervisory committee on the importance of strong lending practices and growth opportunities.
As membership demographics change, it is essential that we gather current data to forecast potential areas of growth and mitigate risk. Tracking member demographics also allows us to make innovative decisions and justify types of products that will benefit our specific type of membership. With the success of implementing a loan scorecard, our team at Campco FCU is excited to create and use additional scorecards throughout the credit union.
Jesse Jacobs is employee relations specialist and project manager with $94 million Campco Federal Credit Union,
