Arbitration Helps CUs Address Delinquencies While Preserving Member Relationships, Credit Union Times

Rich Lee provided an article for Credit Union Times discussing arbitration’s role in helping credit union leaders address delinquencies.

“Late payments can pose significant challenges for credit unions, straining cash flow and disrupting operations,” Rich writes. “When members fall behind on their obligations under business or consumer loans, credit union leaders must find the best way to recover outstanding debts and minimize charge-offs. Given the importance of maintaining strong relationships with valued members, credit unions must handle these efforts carefully.”

For many loan types, Rich notes, arbitration is a compelling alternative dispute resolution, providing a streamlined, private method of collecting late payments while safeguarding the crucial member relationships essential to their success.

“The confidentiality of arbitration also preserves a member’s reputation by not being publicly named in a lawsuit,” Rich points out. “By proactively incorporating arbitration clauses into loan agreements, credit unions and their members alike enjoy a structured and predictable dispute resolution framework.”

Read Rich’s column in Credit Union Times here.