Financial institutions have always wrestled with one main issue when it comes to tracking insurance on their loan collateral: staying properly protected at an affordable price. Since uninsured losses are rare, especially large losses, lenders try to spend as few dollars as possible on staff tasked with keeping track of insurance. However, the risk of a large uninsured loss and the regulations dictating that loans be properly tracked, lead to costs that are much higher than desired, as well as negative customer interactions, all of which could be avoided.
A Vendor Single Interest (VSI) policy protects a financial institution, reduces administrative workloads and improves examinations.
How is your institution protected against uninsured losses to your equipment portfolio? If you’re tracking customer insurance on these types of loans—and spending a lot of time doing it—there’s a solution available that eliminates all tracking and force-placing of expensive premiums altogether. It’s called a Blanket Equipment policy.
GAP coverage, also known as, Guaranteed Asset Protection or Guaranteed Auto Protection, has been a popular loan protection product since the early 1990’s. However, there has never been another time when it’s benefit to consumers and lender has been as essential as it is today. While obtaining GAP is an elective insurance--or waiver of residual loan balance in most states—there are many reasons why loan officers can and should make a persuasive purchasing argument to the buyer in today’s lending environment.
Track in House, Outsourced Tracking, or Blanket Coverage? Which is better?
While most lenders want to focus on lending, not insurance, those who service loans have a necessary but annoying issue to deal with. The insurance on the collateral you hold for security on the loan, along with the paper and correspondence that goes along with it, creates a lot of work and decisions. With so many vendors claiming to have the ultimate solution for you (and they claim that their other solutions, which may be less profitable for them, aren’t the answer for you), how do you decide what solution is best for your institution? There are positives and negatives to each solution that have to be evaluated properly to make the right decision.
Dodd-Frank reform will impact lenders in a major way, but it won’t be easy to change or implement as it is comprised of more than 400 separate regulations overseen by several regulatory agencies. If you or your institution is in the business of lending money, it may be a good idea to keep up with you the Dodd-Frank Reform currently under consideration by the United States Congress.
Below is a list of the resources to help you keep up with the latest details.
Based on their current trajectory, the country’s largest retail banking institutions are expected to achieve a substantial lead in overall customer satisfaction vs. Midsize and Regional banks by 2020,” said Jim Miller, senior director of banking at J.D. Power.
Businesses of every shape and size tout the top shelf customer service they provide. Words like reliability, friendly, personal, dependable, and proven are used. Every representative of their firm says that their company has "great customer service".