Is Your Credit Union Interested in a Third Party Loan Origination System?


CUSO Magazine: We are joined by Pete Winninger, Vice President of Professional Services for Lender*VP, a division of CUSO CU*Answers, to learn more about how his teams works with credit unions looking at integrating third-party loan origination systems (LOS). Pete, can you give us a little background first on how CU*Answers has approached loan origination?  

Pete: Absolutely. CU*BASE, the flagship core processing platform from CU*Answers is a suite solution product. No additional add on modules or outside vendors are necessary from a lending perspective to effectively facilitate our fully customizable native loan origination system (LOS). The system supports every phase of the initial application request to servicing or cradle to grave the process could be equated to.

Historically, CU*Answers clients did not have a choice when it came to LOS providers aside from what CU*BASE offered. This slowly began to change when we opened the door to indirect lenders. This essentially allowed non-member applications to enter the system. From there it remained a wholly contained process in CU*BASE.

But in 2018 we began to take a different view of the LOS world. Understanding there are diverse lenders, we recognize you may have a desire to work with an additional LOS vendor. We allowed the first vendor access to our system. This meant a credit union was using another vendor, a competitor of sorts in some eyes, to initiate and underwrite loans. Fast forward to 2021 and we now have multiple full LOS integrations available along with a full pipeline of projects booked this year with clients moving to additional LOS solutions. We are also constantly vetting new potential vendors based on client requests.

CUSO Magazine: So credit unions now have more options when it comes to their lending tools? 

Pete: Yes, but there are some important things to consider. It is a decision that requires careful thought, though clients are not standing on their own. We now complete these projects on a regular basis; we are the experts when it comes to this.

Not only will CU*Answers not try to deter a credit union from another LOS relationship, we have a full-time staff member dedicated to facilitate a smooth and successful project and implementation.

The first step I suggest is to review the CU*Answers online store page to gain more information surrounding the vendors we work with today. From there, if there’s a vendor the credit union wants to learn more about, they can just let us know. We will facilitate a demonstration of their product and show you how it will work within CU*BASE. If you do not see a vendor listed that you are interested in working with we are happy to explore a potential integration and partnership with them.

Navigating your LOS options with an advocate at your side while selecting an LOS is a vital step in ensuring your credit union has the ability to connect to your members’ lending needs quickly and with ease. CU*Answers is pleased to offer our expertise when it comes to the technical resources and the expertise needed to successfully integrate with a third-party.

CUSO Magazine: Say the credit union has an idea of how they want to manage their loans. What’s next? 

Pete: The first step is communicating everything you want to achieve. With the assistance of Lender*VP, we will design a strategy and set measurable goals to successfully lay the foundation for the system of your choice. Whether you choose to stay in-house with our native solution, utilize a third-party vendor, or implement some combination, Lender*VP is here to assist every step of the way.

As mentioned earlier, we have several vendors we work with as LOS providers today. As such, the foundational work has already been laid in those cases and can be reused to shorten build and implementation time–not to mention lower costs. CU*Answers also has an open-door policy for talking to any vendor you might be interested in working with for your credit union’s LOS needs.

When considering whether to remain a strictly CU*BASE LOS user or design a custom fully integrated solution using a third-party vendor, there are a few critical points to consider. While not an exhaustive list, keeping certain aspects of your project in mind as you begin the journey will help to ease the process and ensure your expectations are met. Defining your relationships, forms, account opening, loan disbursement, credit report data, and online banking are all things to consider.

CUSO Magazine: Can you explain more about how forms might work? 

Pete: Loan forms can originate from your third-party LOS, CU*BASE, or both. This aspect of the integration can become complicated quickly with many moving parts. For example, eSign, document retrieval from CU*BASE for staff, presentation of images to members online, and all the channels for working with members to complete documents and close loans are part of the experience for members and staff. You also need to get your forms safely to your archive where you can ultimately apply retention schedules. By mapping out the process together we will be effective in designing your custom solution. We make recommendations based on your specific needs.

CUSO Magazine: What happens if an application comes through for an individual that’s not an existing member? 

Pete: Today, when the loan applications are imported from the LOS to CU*BASE, whether the individual is a member or non-member is determined. The next step in CU*BASE is to create the loan account based on the approved application exported from the vendor system. Some third-party LOS vendors offer an integrated account opening experience. To meet this request additional programming at CU*Answers would be necessary to build this feature into your overall package. Lender*VP will assist you in connecting the appropriate teams to your vendor, making this development a reality.

CUSO Magazine: How do credit pulls factor into the relationship? 

Pete: The lifecycle of a credit report is important to the overall success of any lending program. From the ability to retrieve, analyze, and govern the data, credit reports are one of the major data sources used to make decisions for your credit union and your members. Designing your approach may be one of the most critical factors for your LOS project decisions. Here are a few considerations:

  • Credit reports will be retained by the vendor: be sure access is allowed. If not, what is the solution?
  • Credit report details will not be imported to CU*BASE: be sure access to the details is allowed over the life of the loan. If not, what is the solution?
  • Are there any reports or dashboards you can use to review credit report data inside of the new LOS? If so, will those be impacted?

Your Lender*VP coordinator can help you obtain a thorough understanding of how your LOS decisions may impact you.

CUSO Magazine: Lastly, what about the interfacing with online banking? 

Pete: Members today expect that their information is accessible. Understanding how your LOS vendor will establish a means for your members to access their loan information will be a vital step in ensuring your members are happy with the lending experience you have offered.

CUSO Magazine: Thank you, Pete! Any last thoughts? 

Pete: As a wrap up, know that CU*Answers is 100% behind a credit union’s decision to partner with a third-party LOS. We will be here to help ensure the process is smooth, details are not overlooked, and you are happy with your end result.


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