A new strategic partnership between the New York Credit Union Association and the San Francisco-based fintech company SimplyCredit aims to help New York’s credit unions combat online disruption and accelerate lending growth.
Through the partnership, SimplyCredit will enable consumers to refinance high-APR credit card balances with participating New York credit unions using a mobile and web interface.
“Credit card debt amounts to about $1 trillion and most of it is expected to revolve,” NYCUA President/CEO William J. Mellin said. “SimplyCredit encourages New Yorkers to turn to credit unions to pay down their debts, while also helping the state’s credit unions as they look to grow loans and memberships.”
SimplyCredit’s online tools enable members to not only apply for personal lines, but also enroll credit cards and schedule balance transfers and line payments. As a result, many members are saving $2,000 or more in interest payments a year, according to the tech firm. Combined with this service are sophisticated analytics and marketing support that helped credit unions achieve application rates of nearly 6% from marketing campaigns.
According to Karthik Sethuraman, CEO of SimplyCredit, a small number of online lenders with a collective history of less than 30 years are now originating more consumer loans than all credit unions combined.
“Fintech disruption started with card consolidations, but the disruption is expanding into other lending categories,” Sethuraman said. “We’re leveling the playing field for credit unions by providing the same tools, prescreen analytics and marketing support that have made online lenders so successful in such a short time.”
“We are big fans of SimplyCredit and our members love the convenience of the program,” Thomas J. Powers Jr., president/CEO of the $52 million, Mohegan Lake, N.Y.-based Hudson River Financial Federal Credit Union, said. “We encourage our members to use any reward-driven cards they choose. However, if a member has to leave a balance on those cards, SimplyCredit is a great one-stop, one-payment solution that helps them avoid the high-interest charges that come with many rewards cards.”
Powers also touted the other benefits of the program, including SimplyCredit’s data science-based recommendations, the credit union’s increased engagement with inactive accounts and the ability to retain underwriting control.
