Case Studies

Currently, the credit union is working to increase its 54% loan-to-share ratio, and the platform helps in that effort, says Stevens. The online tool also provides the framework the credit union needs for profitability analysis, peer-to-peer comparisons, credit risk management, implementation of the Financial Accounting Standards Board’s current expected credit loss (CECL) standard, and more.

“The platform continues to evolve and improve as new functionality is added,” says Stevens. “The new tool allows better access to the analytics 2020 provides. Furthermore, as we move toward CECL implementation, we can use the tools previously developed by 2020 along with the modeling scenarios for our CECL modeling.”

Specifically, the credit union’s CECL model focuses on probability of default methodology, although it’s also running static pool for comparison, as a basis for the historical components of its methodology. “I like the additional features that have been added, where we can shock our portfolio for unemployment and changes in collateral values, plus throw in interest-rate shocks,” says Stevens. “And 2020 has been very responsive to any suggestions I’ve had, and has implemented the good ones.”

The new platform allows credit unions to extract data to plain text CSV and Excel formats, and builds on Twenty Twenty Analytics’ credit risk model to provide credit unions with interactive visualizations so they can:

• Evaluate credit risk and concentrations of risk
• Analyze loan type and risk ratings’ contributions to the bottom line
• Drill down within visualizations based on parameters relevant to the credit union
• View and download individual loans or pools of loans

The new platform gives credit unions peer analytics functionality — the ability to see how the organization stacks up against others in their peer group. Credit unions can create peer
groups based on NCUA region and/or asset size, and then dynamically set risk-based price tiers to match the credit union’s underwriting parameters. From there, the credit union can evaluate factors such as:

• Portfolio composition by loan type and FICO tier
• Concentration of risk as a percentage of net worth by loan type and FICO tier
• Interest rates by loan type, risk-based pricing tier, and origination date, among other factors

2020 Analytics is constantly adapting its services to meet the needs of an evolving industry, both from a regulatory and an operating standpoint. Services also include:

• Consumer loan portfolio risk analysis and collateral valuation: Multidimensional solutions that provide a “credit quality grade” at an individual loan level, based on the current characteristics of each borrower and the borrower’s
  collateral. This risk-based approach is widely accepted by NCUA in reviews of credit union loan portfolios.
• Proactive credit card credit line management solutions: Credit unions can evaluate their credit card loan portfolios to identify members who may be candidates
  for proactive credit line increases. This is a full-service, customizable solution including FICO scores, debt-to-income, and total income estimates from TransUnion.