Washington, DC - CU Times - In his experience, Dr. Robert Manning said credit unions aren’t as flexible as banks when it comes to negotiating debt with struggling consumers. “Credit unions are living in a time warp, where they think their members should pay them first and stiff their bank creditors,” Manning said. Those that stick to an all-or-nothing collections strategy not only “leave money on the table,” he said, but they bully members into paying nothing at all.
“Most credit unions don’t realize members are stiffing them because they know they can’t get any more credit there,” he said. “Maybe back in the old days, that could have worked, but now the average credit union member has multiple lines of credit and will do whatever it takes to keep food on the table.”
Although federal regulations require a total write-off in many situations, Manning said credit unions could still accept partial payments and funnel them through loan loss reserve accounts, preserving the member relationship.