Helping CFE Federal Credit Union Understand Collections P&L

From its modest roots as a credit union for 23 teachers in 1937, CFE Federal Credit Union has grown to over 121,000 members and $1.3 billion in assets today. As with any such meteoric growth however, business challenges have arrived in tandem, so it has been fortunate that CFE and Advisors Plus have forged a close working relationship to meet them.

One such challenge was CFE's need to understand and improve its collection practices. As a first step, Advisors Plus spent time onsite at CFE, gathering data for a comprehensive collections review. The review looked at delinquency and charge-off rates versus industry averages, CFE underwriting practices, and unique segmentation, demographic, and portfolio factors that CFE faced in its central Florida market.

Based on several proprietary vintage analyses, Advisors Plus identified certain subprime segments of the account base that were negatively impacting the entire portfolio. Advisors Plus recommended segregating the accounts into a secured portfolio that could be more closely managed, and changing underwriting criteria going forward.