Connecticut League Offers Loan Participation Tool
Software targets small credit unions, which NCUA data shows have lagged in purchases and sales.
A subsidiary of the Credit Union League of Connecticut has launched software to help credit unions buy and sell more loan participations — an area where smaller credit unions have significantly lagged.
The subsidiary, League Services Corporation, is offering Aluvy, an online loan participation platform designed to give smaller credit unions better access to loan participations at an affordable price.
“The development of Aluvy is a game changer for credit union sustainability,” League President/CEO Bruce Adams said. “Aluvy delivers efficiencies to sellers and creates tremendous buying opportunities for credit unions … new to participations.”
A CU Times analysis of NCUA data showed that sales of loan participations rose faster than loan origination growth for credit unions with $1 billion or more in assets from the first quarter of 2021 to the first quarter of 2022, while sales fell by 56% for smaller ones even as originations rose 5%.
The nation’s 4,591 small credit unions — those with under $1 billion in assets — accounted for 21% of loan originations in the three months ending March 31, but only 13% of loan participation sales and 11% of purchases.
Aluvy, Software as a Service (SaaS), uses proprietary automation of one-to-many participations and payment servicing to enable smaller credit unions to access right-sized loan participations. For larger or more experienced sellers, it is designed to reach a greater volume of buyers with more diverse purchasing appetites.
In partnership with Virtual StrongBox, Aluvy is equipped with secure digital storage, participation marketplace, automated payment processing and tools to help credit unions manage their sold and purchased pools.