November 24, 2022
  • November 24, 2022

Connecticut League offers loan participation tool

By on June 23, 2022 0
Source: Shutterstock.

An affiliate of the Credit Union League of Connecticut has launched software to help credit unions buy and sell more loan equity — an area where smaller credit unions have fallen significantly behind.

The subsidiary, League Services Corporation, offers Aluvy, an online loan participation platform designed to give small credit unions greater access to affordable loan participation.

“Aluvy’s development is a game-changer for credit union sustainability,” said league President and CEO Bruce Adams. “Aluvy delivers efficiencies to sellers and creates huge buying opportunities for credit unions…new to stakes.”

A CU time analysis of NCUA data shows loan participation sales grew faster than loan growth for credit unions with $1 billion or more in assets from Q1 2021 to Q1 2022 , while sales fell by 56% for the smaller ones even as production increased by 5%.

graph showing loan participations falling for small credit unions.

The country’s 4,591 small credit unions — those with assets under $1 billion — accounted for 21% of loans issued in the three months ending March 31, but just 13% of loan participation sales. and only 11% of purchases.

Aluvy, software as a service (SaaS), uses proprietary one-to-many equity automation and payment services to enable small credit unions to access appropriately sized loan equity. For larger or more experienced sellers, it’s designed to reach a greater volume of buyers with more diverse buying appetites.

In partnership with Virtual StrongBox, Aluvy is equipped with secure digital storage, a participation marketplace, automated payment processing, and tools to help credit unions manage their sold and bought pools.