Pandemic Lending Lessons Put Into Play

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EDITOR'S NOTE: Lending was interesting and challenging in 2020 amidst the COVID pandemic. Below are excerpts from two recent articles in in which representatives from Star One CU and Clark County CU shared their experiences and lessons they have learned throughout this time.


For decades, Star One CU has modified the interest rate and monthly payments on active loans in good standing upon request, driving loyalty among members. All in all, the credit union’s real estate modification program boasts a process that is easier and more member-friendly than a refinance, says Victoria Tabler, Star One’s vice president of real estate lending. And there’s no limit on the number of times a member can modify.

Historically, Star One has not marketed its mortgage modification program. Instead, members learned about it through word of mouth or independent research. But along with nearly every facet of life, that changed when the novel coronavirus hit in March 2020.

Star One immediately instituted a robust mortgage deferral program and secured regulatory approval for drive-by appraisals. It also worked with its legal department to rethink documentation practices and reduce health risks, Tabler says.

Still, by mid-year 2020, the credit union started to see members, tempted by low rates, refinance their mortgages with other lenders. That’s when it decided to fully leverage its real estate modification program.

Across the industry, refinancing became a tool for lenders to expand their portfolios. As rates steadily decreased, the interest in refinancing steadily increased. Star One, however, retained its commitment to a five-day turnaround for modifications. The cooperative, after all, didn’t have to re-originate the loan, it just had to change the rate and payment. Competition did force the credit union to reduce its program fee to a flat $500, and for a time it even ran a promotional rate.

Star One started marketing its modification program first to members whose mortgage rates were higher than the current market rate. It also leveraged analytics to develop a trigger campaign that scored members based on the probability they’d move their loans. It called members likely to move—based on information such as pay-offs to other institutions or credit pulls—to retain the relationship before losing the loan to another lender.

A Bright Performance During A Dark Year

To accommodate the increased volume in modifications, Star One expanded its mortgage servicing team and provided additional training to branch staff. By the end of the year, it had processed more than 3,800 modifications totaling more than $1.8 billion—a record year for both, Tabler says.

"Retention is smart lending."

The credit union also set records in 2020 for new originations—2,800 for $1.3 billion.

Looking forward, Tabler expects member interest in mortgage modifications to continue, although she acknowledges the market will play a role. If rates continue to drop, she says, members will be likely to request modifications.

Regardless of future demand, modification activity in 2020 pushed the mortgage department at Star One to cultivate team relationships and enhance service skills. It also highlighted how important the department’s servicing arm is to the credit union.

And that won’t change any time soon.

“You can turn your focus toward originating new loans and driving growth, but if you can’t keep those loans, you’re wasting time, money, and resources,” Tabler says. “Retention, on the other hand, is smart lending.”


Lenders from five credit unions, including Clark County CU, spoke with in June 2020 about lessons brought about from COVID-19. Now entering the second year of the pandemic, these once again offered insights on what they’ve learned and how they’ve put those learnings into action. Here’s the excerpt from Clark County CU.

Josh Haldeman has been with Clark County Credit Union ($980.4M, Las Vegas, NV) since September 2014 and has been its chief lending officer since May 2018.

What have you learned in the past year that you’re building on in 2021?

One of the biggest things we have learned is that a credit union is a vital part of the community and genuinely helps people stay in their home and or car. I’ve also learned it’s better coming into a challenging economic environment with a strong balance sheet. We’re fortunate to have strong capital that has allowed us to help our members. CCCU also has a diverse borrowing base with strong commercial lending, mortgage lending, and consumer lending. Despite the increase in unemployment in our region, we approved more consumer loans in 2020 than we did the previous year.

Unfortunately, we also learned we need to stay diligent with verification of income and underwriting practices, especially during tumultuous times. If I could turn back the clock and do things again, I would have changed the way we offered our loan deferrals. Making interest-only payments keeps members more engaged and committed to paying their loans.

What are the biggest challenges and opportunities in your market for loan products?

The challenge any credit union faces in lending is finding the balance between offering members value-driven rates while mitigating overall interest rate risk to protect the cooperative.

This past year was a challenging year for our community. There was and continues to be a lot of uncertainty around employment, which can naturally cause lenders to become more constrictive in their lending practices.

These market conditions drove us to examine our lending practices. Although we were at times cautious in our approach, it was important to us to stand up for our members and continue to lend during these unprecedented times. We expect the challenges of 2020 will reverberate throughout the first half of 2021. In spite of those challenges, we maintain our commitment to meeting market demand.

We’ve also been able to seize the opportunity to grow our commercial lending portfolio. While a lot of the banks have run for cover, we’ve been able to find businesses that are profitable with good collateral, and we’re helping them meet their needs.

Bonus question: What impact has your work during the pandemic had on members?

I believe CCCU made a big impact in our local community of Southern Nevada with our COVID response and agile lending policies. Between March and December, we offered skip payments on 2,899 loans totaling 6,503 loan skips. We waived $4,354,751.07 in total payments during that time. We also waived more than $160,000 in loan skip fees.

We also maintained our charitable giving strategy, even while nonprofits had to greatly modify their fundraising efforts. CCCU also reached out to our members with some assistance during the holidays, paying up to $1,500 off credit card purchases for five lucky winners. The winners sent us messages of thanks and we learned many had fallen on hard times. Selecting our winners randomly led us to a member whose spouse had lost their job and a member who was facing expenses for a family member’s funeral.

We’ve also heard from our members grateful that our lobbies have remained open at all of our branches while other financial institutions have dramatically limited their hours or locations.

These articles appeared originally on and is the intellectual property of CALLAHAN & ASSOCIATES. No part may be reproduced, transmitted, distributed, published, or otherwise com­municated without the express written permission of CALLAHAN & ASSOCIATES. To read the Star One CU article, click here.  To read the Clark County CU article, click here

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