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Lending & Credit Risk Loan Origination System

Dover FCU Saves At Least a Month’s Time Annually with Abrigo LOS

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Dover Federal Credit Union (DFCU), using Abrigo’s loan origination system (LOS):

  • Increased MBL portfolio 45% without adding staff
  • Provided members a better, faster experience
  • Cut turnaround time for loans under $50,000 to 1-2 days from 3-4 days
  • Sped up credit spreads by two to three hours per loan
  • Slashed an estimated 153 hours of work last year on tickler tracking alone
  • Saved another 40 hours of work tied to new loans for existing MBL borrowers.
  • Satisfied regulators while avoiding having to outsource property tax payment tracking
  • Eliminated a day’s work on HMDA reporting
All the way around, with the modules we’re using, [Abrigo] just makes our lives more efficient. And a lot easier.
Debbie Bather, Director of Business Services

MBL Portfolio Up 45% With No Staff Added

A principal goal for Debbie Bather, Amber Startt, and the others in Dover Federal Credit Union’s Business Services Department is to serve community businesses by providing member business loans (MBLs). DFCU’s growth shows
it is doing just that. It increased the member business lending (MBL) portfolio 45% last year to about $70 million, including close to $9 million in Paycheck Protection Program loans. This year’s goal is another $28 million
in new loans, according to Bather, DFCU’s Director of Business Services. “We push the pipeline because that affects the bottom line and loan reviews,” she said.

“We have been able to handle the volume increase without adding staff,” thanks to staff effort and using Abrigo’s loan origination system (LOS), noted Startt, Senior Credit Analyst. “The efficiencies using the software most definitely helped us to stay on track and manage the loan process efficiently and in a timely manner,” she said. 

Before: Paper-Based, Manual Processes Slowed Staff and Turnaround

Efficiency wasn’t always this widespread in the credit union’s lending and credit operations. Historically, DFCU processed paper applications requiring substantial clerical-type work for DFCU’s business relationship manager and others. The business relationship manager would “spend a lot of time sitting with members, copying their tax returns, filling out their application, getting their signatures,” Bather said. “And then all of that had to be scanned in.”

Paper-based applications and manually tracking everything through Excel created unintended bottlenecks and extra work for the staff. They often had to walk across the hall or make phone calls to relay that a step was completed so the application could move to the next phase of the decision process. “It would be, ‘OK, is it ready for me to work?’ or ‘I’m waiting on Amber to do this,’” Startt said.

To manage ticklers or to see which loans needed an annual review meant working between multiple spreadsheets and loan files, manually generating document requests, then tracking receipt. “We were running a spreadsheet for all different tracking purposes, and the NCUA [National Credit Union Administration] was like, ‘You need a better system,’” said Bather. Furthermore, when staff or a member wanted to check a loan status, Bather and others had to dig through the loan file or a loan presentation.

Paper applications also meant more work for existing MBL borrowers when they wanted a new loan, for example, to buy another investment property or replace a truck. A new loan required the member to complete a brand
new application, and staff would enter the data and add documents all over again.

“Our loans under $50,000, which we primarily do through [Abrigo’s] Loan Decisioning, can be completed in one to two days”

Amber Startt, Senior Credit Analyst

DFCU Streamlines Lending, Credit Analysis With Abrigo

In 2018, Dover Federal Credit Union implemented Abrigo’s fully integrated lending and credit solutions and has streamlined the entire origination process -- from loan application to credit underwriting to loan administration. Using the web-based loan origination system (LOS), the credit union has automated MBL lending on one platform, eliminating inefficiencies and bringing together data previously held in siloed systems. As a result, DFCU makes faster loan decisions and provides better member experiences.

After: Faster, Better For Members

Now, credit union staff launch MBL applications with the click of a button instead of a flurry of paperwork and staff activity. With a link to the credit union’s online loan application (customized for its branding and credit standards) and the secure portal, members complete the MBL application at their convenience and sign it electronically, even after business hours. They can upload any tax returns, financial statements, or other required documents as they track them down, even if it’s one-by-one over several days. Conducting business online has been especially important during the pandemic, when phone calls and video conferences replaced branch visits and virtually all face-to-face meetings for members and staff.

“The loan application process is a lot easier,” Bather said. DFCU’s business relationship manager now spends a
lot less time producing applications, asking members for documents, and scanning paper files into the system.

Startt agreed. “It allows us to process things faster, because they can just upload it to the portal, and I get an email notification in the portal saying that it’s there,” she said. “I love that.”

DFCU provides members with a better, faster experience. They see what’s needed to move forward, motivating them to complete applications and upload all documents to start the decisioning clock. Small loans are handled especially quickly.

“Our loans under $50,000, which we primarily do through [Abrigo's] Loan Decisioning can be completed within one to two days," compared with a previous turnaround of between three and four days, Startt said. 

DFCU Business Relationship Manager Timothy O’Connor especially likes how a borrower’s information is automatically ported over when a new loan application for them is created. “If they come back and say I need to buy another three properties, we’ve got everything in Sageworks,” O’Connor said. That speeds up the process dramatically.

“It’s a selling point for me,” he added. “I go in there and tell them….once we get you in the system, if you want to buy another truck, it’s just putting in the details of the collateral and updated financials. It helps with referrals for us.”

It also saves the lender a lot of time. Based on the number of repeat-borrower loans DFCU did last year, O’Connor says Abrigo’s streamlined process saved him a combined 40 days of work.

“It allows us more time to work on annual renewals, collecting documents, making phone calls out to clients – just all of the different things we have to do,” he said. “I think it’s a big reason we were able to do a lot of loans last year, because it makes us more efficient.”

Even with credit and lending staff rotating between the office and working remotely during the pandemic, DFCU hasn’t missed a beat processing its pipeline. Key to this efficiency is the Sageworks Workflow product from Abrigo, which notifies staff when a loan is ready for the next step. 

The Workflow is what keeps us organized. Everyone knows what’s next.
Debbie Bather, Director of Business Services

Spreads Are 2-3 Hours Quicker

“The Workflow is what keeps us organized,” Bather said. “Everyone knows what’s next.”

Startt agreed. “I know when it’s time for me to do a cash flow. I know because once it is, a notification hits, so I’m not like, ‘OK, well, it hasn’t gotten to my workflow yet,’” she said. “The Workflow has added to the efficiency and allows us to stay on track. And we have the convenience of being able to look [online] and see exactly where a loan is within the pipeline” when a member seeks an update.

Startt had spent two to three hours manually spreading financials and calculating ratios for each loan. Sageworks Credit Analysis from Abrigo does it all automatically, and the Electronic Tax Return Reader (ETRR) technology automates uploading of returns. “Just with not having to complete
all the spreads manually for the cash flow, that saves an average of two to three hours, depending on the complexity of the loan/relationship,” she said.

DFCU’s risk ratings are more self-explanatory than they were before, too, which makes them easier to apply consistently. “The risk ratings are a lot better,” Bather said. “Abrigo was instrumental in helping us get all of that set up.”

Tickler Tracking Saves 150+ Hours

DFCU also automated manual tracking of tax returns, insurance, and periodic loan reviews. Based on its
MBL portfolio, that saves an estimated 153 hours of work – the equivalent of nearly a month of staff time annually. Sageworks Loan Administration, part of Abrigo’s end-to-end loan solution, centralizes tickler information online to provide a list of what’s due when for each loan, replacing the need to repeatedly consult separate systems, spreadsheets, or loan files, or to send multiple document requests. Now, Startt said, “I can just click on that button that says request information, then I choose the document that I need and send it over to [members] with the link, and I can get it uploaded and I can get it signed, It saves us probably about 30 minutes per member. It also has given the members more convenience and security to upload their own documents to the portal.”

With each MBL loan requiring at least a tickler for tax returns annually, DFCU has avoided a month’s worth of work on ticklers alone, based on its MBL loan volume. Add in saving up to three hours on each MBL requiring a credit spread, and the efficiency is impressive.

Loan reviews are also more consistent when staff are automatically notified by the software that one is due. “That’s been our saving grace with annual reviews, because it was just horrible on that spreadsheet,” Bather said.

Once the tickler is received or a loan review is completed, the solution clears the item and advances it to the next due date. Bather said DFCU had always struggled to track annual property tax payments on collateral. Regulators didn’t like its manual process. “This has allowed us to better track the property taxes, and it allowed us to do it in-house, so we didn’t have to go out to a third party,” she said. Regulators are happier, too. “The tickler system is just amazing.”

Easier Reporting

Abrigo LOS

Lastly, DFCU is more efficient with routine reporting using Abrigo’s life-of-loan solution. Abrigo “has given us the opportunity to pull reports very easily,” Bather said. It also enabled the automation of a time-consuming report required annually.

Staff can automatically generate and export required Home Mortgage Disclosure Act (HMDA) data in the correct format so it can be easily added to results from the consumer side for an institution-wide report. The process used to take about a day. “It was such a tedious task,” Bather said. “We will never have to manually do that again. That’s enormous.”

It’s just another way Abrigo’s loan management software has streamlined Dover’s lending and credit operations.

“All the way around, with the modules we’re using, it just makes our lives more efficient,” Bather said. “And a lot easier.”

'Really Close Partnership'

Abrigo’s customer focus has made transitioning to the streamlined loan origination process much easier, according to Dover Federal Credit Union’s staff.

Indeed, Abrigo earned top scores in Aite Group’s recently released report on client satisfaction. The report, “Lenders’ Perspectives: Commercial Loan Origination Automation,” compiled vendor ratings based on client interviews regarding lender satisfaction with their commercial loan origination software provider.

Before the pandemic, when Bather was attending conferences, she would run into DFCU’s account executive from Abrigo. “He remembers me like he’s my best friend,” she said. “Every time I see [him] or come across an email, he’s like 'Hey Debbie, how’s it going? Is there anything I can help you with?’” 

“We love Abrigo’s products. I can’t say enough,” O’Connor said. “But it’s Abrigo’s support and people that really make it for us. We’ve had such good support. We call, we get a live body.”

Startt agreed. “They’re always very, very helpful,” she said. “I even got a card once from support, thanking me for calling in and being part of the Sageworks partnership. I was like, ‘I got a card for calling in to ask them to help me with something!’”