Second Quarter 2006
CRS offers collections assistance in hurricane zone
Sheila O’Leary, Collection Manager, Creditors Resource Service (CRS), recently returned from her second trip to New Orleans to meet with credit unions impacted by Hurricane Katrina. Her goal was to find out first hand the challenges these credit unions face and to offer collections assistance.
“The devastation is so widespread it is overwhelming. There is so much to do, finding a place to begin is difficult. Then once you get started, you discover you’re in uncharted territory,” said O’Leary. For example, credit unions received insurance pay-offs for car loans, but the car title was unavailable because it was destroyed in the flood, so the title couldn’t be sent to the member. The secretary of state had to develop an affidavit system for the credit unions to complete so the members could get the titles to their cars.
Since thousands of people were displaced by the hurricane, one of the biggest immediate challenges facing the area credit unions is finding their members. “The 60 to 90 day grace periods which were extended to people who lived in the hurricane region have expired, so now delinquencies are starting to surface,” said O’Leary. CRS can help credit unions locate members across the nation through its Skip Tracing Service.
O’Leary said car loans are a concern for the credit unions. Once delinquent members are located, the next issue is finding the car, which could be located anywhere in the country. “Some credit union managers are concerned that they’ll have to ship a car from someplace like Salt Lake City to New Orleans and the cost will be prohibitive.” CRS can assist the credit unions with its nation-wide network of repossessors who can handle everything from locating the vehicle to selling it.
“Credit unions in general have low delinquency rates, so having to collect on loans is new for some of these credit unions, especially the smaller ones. It’s something they’ve never done,” said O’Leary. As a result, she will provide collections training for credit unions in New Orleans.
“We will work with the credit unions to find out what assistance they need, then we’ll see which services we offer match those needs. If they need something we don’t offer, we’ll help them find it. Our goal is to figure out ways to help the credit unions,” said O’Leary.
During her most recent trip, some of that assistance was provided by spending the day with UNO Credit Union re-writing their collection procedures, making phone calls, and offering other help with getting better organized. O’Leary also spent one-on-one time with Sewage and Water Board EFCU and Tulane Loyola FCU. The visit was capped off by speaking at a joint chapter meeting where 80
“CRS isn’t a typical collections agency,” she added. “We work exclusively with credit unions and are sensitive to helping credit unions maintain a relationship with their members. We want to make the credit union ‘whole’ while simultaneously making the debtor feel ‘whole.’”