SOUTHLAKE, Texas — Lender Compliance Technologies has launched a new credit union service organization aimed at helping credit unions automate the cancellation and refund process for GAP coverage, service contracts and other finance and insurance products.
LCT CUSO is a partnership involving Lender Compliance Technologies, One Washington Financial, SWBC and Jay Mossman, CEO of AKUVO, according to Lender Compliance Technologies, or LCT.
One Washington Financial is a CUSO wholly owned by Washington State Employees Credit Union. Mossman is investing personally through NRT Holdings LLC.
LCT said the new CUSO will make its cloud-based compliance technology more widely available to credit unions seeking to manage refunds when borrowers cancel voluntary protection products or when loans are paid off early.
Supports Nearly 30 Credit Unions
The company’s Refund Control platform currently processes more than 100,000 cancellations a month and supports nearly 30 credit unions serving more than 5 million members, according to LCT.
“We are excited to build upon our successful credit union partnerships to deliver simplified compliance solutions that will help more CUs protect their bottom line and their members,” LCT CEO Glenn Munro said in the announcement.
Munro said the CUSO is intended to give credit unions control over the F&I product cancellation and refund process while creating an audit-ready record of the transactions.
Automating a Complex Refund Process
LCT, founded in 2021, provides technology to banks, credit unions and auto finance companies for managing cancellations and refunds involving products such as guaranteed asset protection, or GAP, and vehicle service contracts.
Those refunds can become an operational and compliance issue when a borrower pays off a vehicle loan early, refinances it or otherwise becomes entitled to a refund for the unused portion of a product.
LCT said lenders that lack technology to control the process can face delayed member refunds, missed recoveries and increased regulatory risk.
Refund Control is designed to replace multiple manual or outsourced processes with a single system of record.
Available Via Platform
According to LCT, the platform provides credit unions with:
- Credit union-controlled workflows rather than outsourced business-process models.
- Direct connections to more than 800 providers for refund quotes.
- Real-time tracking and reporting designed to provide an audit trail.
- Automation that LCT said can reduce workloads by as much as 90%.
The company said its platform provides end-to-end automation intended to allow lenders to track cancellations, calculate or obtain refunds and monitor the process through completion.
WSECU CUSO Among Partners
One Washington Financial CEO Paul Kirkbride said the investment reflects credit unions’ continuing search for technology that can improve efficiency while enhancing members’ digital experience.
“By leveraging LCT’s extensive finance and technology expertise, LCT CUSO will empower credit unions to modernize and simplify complex processes and improve recoveries, so more resources go toward their true mission — helping their members,” Kirkbride said.
One Washington Financial, based in Olympia, Wash., is WSECU’s CUSO holding company and invests in companies developing products and services for credit unions.
SWBC, a San Antonio-based diversified financial services company, also is participating in the new CUSO.
Mark Hein, CEO of SWBC’s Financial Institution Group, said collecting refunds from outside providers can create operational complexity for financial institutions.
“This partnership with LCT’s innovative technology helps simplify that process by reducing the operational burden on financial institutions while making it easier for them to effectively support their borrowers,” Hein said.
AKUVO CEO Invests Personally
Mossman said his experience with LCT through AKUVO led him to invest in the new CUSO through NRT Holdings.
“Through AKUVO’s collaboration with LCT, I recognized right away the sheer advantage of LCT and its breakthrough technologies in helping credit unions solve real operational challenges and deliver better member experiences,” Mossman said.
LCT said the CUSO is intended to expand access to automated compliance technology as regulatory scrutiny of refunds associated with vehicle finance products continues.
The company said Refund Control is designed to help credit unions manage the process internally while maintaining records necessary to demonstrate that members received refunds to which they were entitled.
