Does anyone really still believe manual underwriting is the best and most efficient way to move into the future of lending?


I can’t believe that I still talk to C-Suite-level senior management, and even board members, who insist that “automated underwriting” can’t work for their institution – when just about every online lender, and most point-of-sale lenders, make instant credit decision for even unsecured loans of $5,000-$25,000. See for yourself. Apply for a credit card from any of the major providers, or through one of the airlines, hotels, Best Buy, Home Depot, COSTCO, you name it. If you have decent credit and income, you’ll get an instant approval.

I just got back from speaking at a credit union strategic lending conference where a major theme of my presentation was how, through collaboration and aggregation, every credit union, regardless of size or field of membership, can and should compete in every channel available. However, I still get all kinds of pushback and reasons (excuses) why they can’t!

We discussed that credit union (CUSO) owned FinTech (Financial Technology) does exist to improve your loan underwriting delivery, as well as consistency, efficiency, and, overall profitability. Yes, as a CUSO, we have an agenda – to save charters by helping credit unions of all sizes and fields of membership compete. We’re a CUSO, credit union owned and operated. Why would we not want to serve the movement as well as our owner credit unions?

What’s the solution – what are the options?

  1. Do nothing. While you may not be planning on having your charter merged out of existence, neither do the 200+ charters that we lose each year.

  2. Keep doing what you are doing. If what you are not doing is not working and you keep doing it anyway, expecting different results, well…we all know what that’s the definition of.

  3. Build and maintain your own system. If you think it’s easy or even fun being a software designer, developer, and maintainer, and you have the resources and time, building your own system is an option. However, you likely have other immediate and long-term strategic priorities, combined with limited resources, so for most institutions, developing and maintaining a proprietary system on your own just isn’t a viable option.

  4. Find a trusted, proven provider. I suspect you knew that’s where I was going with this. Doing your research on a couple of providers is a lot faster to market and easier than building, and it gets you out of the rut of continuing to do it the same way. It at least puts you on a track for some kind of change that will further enhance and develop your process. It gets you on the path and going in the right direction.

  5. Get a money-back guarantee. If any provider is as good as they say they are, why don’t they provide a guarantee? If you are willing to spend $10,000 – $100,000 for deployment of a system, and it still doesn’t do what it was sold to you for, why should you pay for it? Why hang on to it?

LOS software is much more affordable and effective today than even a few years ago. Those of you that invested huge dollars and time over the last 5-10 years in your middleware are reluctant to change. You think, “Our system didn’t do all that it promised. Why should a new system be any different?” Here’s the simple answer: Our new system is different and much more reliable in the underwriting of quality of loans. (There’s also the fact that most current systems are already antiquated).

There’s not enough room in this article to get into all the details of aggregating lenders and how turn-key processes provide huge savings. What I will say is that the savings and efficiency gains are exponential.

Calculate your own savings. What would saving 10%, 20% 30% or more on your underwriting LOS and loan packaging save you? Imagine staff not wasting time on DECLINES. Imagine the savings on credit pulls, and if you are using DealerTrack and RouteOne, Lending Tree, and other aggregators, the savings on per-application and funding costs are substantial.

You can easily avoid the high cost and inconsistency of manual underwriting and processing on the majority of your consumer loan approvals by implementing automation into your operation.

  • Be a multi-channel lender – Capture loans at origination
  • Automate approvals. Direct, indirect, and 24/7 online instantly
  • Recapture loans through ongoing refinance campaigns
  • Automate 40-60% of your underwriting approvals
  • Instantly risk-price on 100%+ of your approvals
  • Make manual underwriting easier, faster, and more consistent
  • Automate 50% of your back-end processing
  • Aggregation minimizes extraneous costs like credit pulls and per-app fees
  • Outsource and utilize turn-key functions and processes that reduce fixed-cost

Most credit unions, even many of the smaller ones, have the resources and liquidity to implement automated technology. You simply need to get past your biases and/or get over the fact that you made and continue to make huge investments in something that is no longer working well for you.

CU Sol offers a completely turn-key solution through CU Lending Edge. If you have read this far, you owe it to yourself and your institution to take the opportunity to be aware that there is new technology and proven, cost-effective systems and platforms, with $Money-Back performance guarantees!

If your strategic or tactical plans for this year or the next include research or implementation of any aspects of automation of your lending process, include us in the list of providers – you’ll be glad you did.

To comment, or for more information, reach out to Walt Agius at, or call CU Sol, LLC at 505-342-8910