Providing a Positive ROI for Your Dues Investment Electronic Lien & Titling (ELT)
By: David Frankil, NJCUL President/CEO

Back at my first NJCUL Annual Convention in 2016, we promised you a League that was focused on your needs, providing compelling value and a solid ROI for your dues investment. We’ve spent the last 15 months living up to that promise.

It can be difficult to estimate benefits from legislation, which often only have indirect benefits on our operating environment. But ELT gives us a chance to attach some numbers to a standard business process.

ELT legislation was signed into law by Governor Christie this week, and it requires the NJ Department of Motor Vehicles to determine within 60 days whether it can create its own ELT system within a year, or to outsource it.

We did a back-of-the envelope estimate a few weeks ago, but let’s dig deeper into the analysis. What would ELT save a typical credit union in New Jersey?

Let’s start with an estimate of the additional internal cost of manually processing lien and titles. Assume a typical employee involved in this process is paid a $35k salary plus benefits. Manual processing includes storage, recording/perfecting title, replacing lost titles (if applicable, and this is an additional cost to the CU), releasing the title, and mailing the title (footnoting in internal systems – core/LOS).

Let’s assume this all chews up on average 30 minutes per title, which translates into a cost of $12 per title. And then let’s figure an additional $1.00 per title savings by not having to mail the physical title and additional paperwork or store it.

That gets us to $13 in savings per title - so for a credit union with

  • 100 auto loans per year, the savings are $1,300
  • 500 auto loans per year, the savings are $6,500
  • 1,000 auto loans per year, the savings are $13,000
  • 2,000 loans, the savings are $26,000, and so on.

These estimates are if everything runs 100% perfectly as intended, and doesn’t even consider the extra costs when your credit union might need to replace a lost title, which is a fee of $60. Even with being conservative, that would be a solid ROI on dues for most NJCUL members right there – but go one step further, and include the benefits from reducing fraud and manual errors, which both require mitigation. This is going to differ significantly from credit union to credit union, and we can’t estimate it unless we know your fraud losses and incidence of errors.

For example, this category of costs addresses issues where the lien wasn’t placed correctly, resulting in no lien; or the borrower not making good on the loan, with the lender stuck with no recourse and/or duplicate loans on one vehicle. 

So if we assume a combined 0.1% fraud and error mitigation rate, depending on the cost of the car involved, we could be looking at anywhere between $15k-$60k per year for a credit union doing 1,000 car loans per year. In other words, the cost of a single fraudulent car loan or a single error that require mitigation.

So for credit union doing 1,000 car loans per year, the total estimated benefit from ELT is somewhere between $28,000-$73,000.

Email me at if you’d like the spreadsheet to plug in your own numbers!

Political & Legislative
Tell Senators Menendez & Booker to Support Common Sense Regulatory Relief Bill
By: Chris Abeel, Vice President, Corporate & Governmental Affairs

So it looks like 2018 is off to a fast start!

Today we issued our first Call to Action for the New Year in an effort to advance a regulatory relief bill in the U.S. Senate as early as possible in 2018.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155) was reported favorably from the Senate Banking Committee in December. The bi-partisan legislation includes several provisions that would improve the operating environment for credit unions and enhance their ability to better serve their members.

Among other things, the legislation provides credit unions parity with banks by reclassifying 1-4 unit, non-owner occupied residential property loans, affords relief of QM rule requirements for certain lenders, and changes to HMDA’s reporting threshold requirement.

We’re urging credit union professionals, volunteers, and members to use CUNA’s Grassroots Action Center to encourage Senator Robert Menendez (D-NJ) and Senator Cory Booker (D-NJ) to support the legislation. If this is your first time using the grassroots Web site, you’ll need to type in your address information to display the correct message. But don’t worry, it won’t let you send the wrong email!

Successfully protecting the credit union tax status during tax reform is proof positive that when credit unions mobilize good things happen. We’ve gained some significant traction on the regulatory relief front and need to maintain that momentum.


Political & Legislative
When Will We Know Who Could Be A Heartbeat Away in NJ?

Something is happening in New Jersey for just the third time in our history - our gubernatorial candidates will have running mates.

Before 2009 New Jersey was one of only a few states that didn’t have a lieutenant governor to succeed to the governorship in the event of a vacancy. Only two individuals had previously held the title, both in the Colonial times.

For most of the state's history, a vacancy in the position of governor was filled by the president of the State Senate.

After episodes where the state had multiple "acting governors" in the span of a few years following the resignations of Governor Christie Whitman in 2001 and Governor Jim McGreevey in 2004, pressure mounted for a better solution to gubernatorial succession. After all, the senate president/acting governor, or “SPAG” as it became known, was inherently a violation of the separation of powers doctrine. 

In 2006 a referendum was put before the voters to amend the state's constitution to provide for a lieutenant governor to be elected on a ticket with the governor to serve a concurrent a four-year term. Incumbent lieutenant governor and current GOP gubernatorial nominee Kim Guadagno was elected the state’s first lieutenant governor on a ticket with Governor Chris Christie in 2009, and re-elected with him in 2013.

New Jersey doesn’t have the equivalent of the national conventions where party standard-bearers and their running mates are formally nominated. Here in New Jersey voters select their party’s nominee in a statewide primary election and the nominees select who they want to be their running mate. 

So when might New Jersey voters know who’ll be running for lieutenant governor?

The answer rests on two factors; when the primary election results are officially certified, and when the candidates feel they can get the most political bang for their buck.

Officially, a nominee has thirty days to name their running mate once the Division of Elections certifies the primary results.  Because that can take about two months, the June 6 primary results might be certified as late as say mid-August. That would leave the potential window for announcing a running mate open until mid-September. 

Timing of any announcement is critical, to maximize exposure and momentum. For practical purposes, Labor Day weekend is the traditional start of political campaign season in the state.  Unless one of the candidates can do something wildly attention-getting with their pick, it’s going to be hard to get any attention before the end of the summer season. In fact, I’d argue that few other than reporters, pundits and outright political junkies are more than slightly aware there’s even a gubernatorial election this year

I’m betting we won’t know who might be a heartbeat away in New Jersey until after Labor Day. But, in the words of Yogi Berra, “It's tough to make predictions, especially about the future.”

Political & Legislative
Four Years to Uncover a Title Fraud Ring?
By: Chris Abeel, Vice President, Corporate & Governmental Affairs

Every so often, a story comes across the wire that just makes you shake your head. In this case, a tale of fraud that is not only easily preventable but would not occur in any state in the nation that has implemented electronic lien and titling (ELT) technology.

Unfortunately, New Jersey is not one of those states.

NJ Attorney General Christopher Porrino recently announced the indictment of five individuals on various first-degree charges for a scheme in which they financed car purchases and then resold the vehicles after fraudulently removing the liens.

The five enterprising individuals, now defendants, apparently purchased or had others purchase vehicles on credit. They then forged letters purporting to be from the lender stating that the loan had been satisfied, and used those letters to get clear titles from the MVC. The vehicles were subsequently flipped for cash, involving at least 25 vehicles over a four-year period “with a total value of well over half a million dollars.”

Who does this hurt the most? Whose pocket did that half a million dollars come out of? The poor consumers who now “own” cars without proper title, and are on the hook for the lien. I doubt the MVC is going to make lenders or unsuspecting consumers whole. And, of course, taxpayers have to pay for the investigation, a trial, and presumably future lodging with the Department of Corrections.

If this doesn’t make the case for ELT, I don’t know what does, and you can bet we’re telling Trenton lawmakers at every turn.

What I find most ironic is that our state regulators are saying all the right things. “This investigation reaffirms the value of motor vehicle documents and the need for the MVC to maintain the security and integrity of its operations,” MVC Chairman and Chief Administrator Raymond Martinez was quoted in the attorney general’s press release announcing the indictments. “Complacency is not an option, which is why we continue to invest in technology, training and internal controls that help us to identify and crack down on criminal activity.” 

The current investment in “technology, training and internal controls” allowed this fraud to run for some four years. So may we respectfully suggest implementing ELT, something we began asking for more than five years ago.   

ELT can significantly reduce if not eliminate altogether this type of fraud. ELT is a closed looped system, meaning only the lienholder can issue a release through the system, and access is controlled by a user authentication protocol. Is it perfect? No. But it sure is a lot harder to beat than simply cutting and pasting a letterhead!

Apart from fraud prevention, ELT benefits consumers who would no longer have to worry about lost titles, or delays in issuing a title, or getting a lien released. ELT benefits lenders because it helps reduce the cost and time associated with paper liens and titles, including filing, handling, mailing, and, perhaps most cumbersome, going physically to MVC offices with batches of paper forms to be processed.

And, ELT can be outsourced and implemented at no extra cost to the state. 

Because the MVC has refused to move forward on an administrative level, we’ve been actively supporting legislation (A1943/S2968) that would mandate ELT and we’re grateful to the sponsors, Senators Joe Vitale (D-19) and Linda Greenstein (D-14), and Assemblymen Craig Coughlin (D-19) and John Wisniewski (D-19), for their support and leadership on this issue.

Political & Legislative
Two Calls to Action in Two Weeks is a New Record for Me!
By: Chris Abeel, Vice President, Corporate & Governmental Affairs

The Financial CHOICE Act (H.R. 10) and other potential regulatory relief measures have been center stage for most of us in the credit union movement since the new administration took office. But two congressional appropriations issues related to community development funding surfaced requiring our attention, hence the back-to-back alerts.

Political & Legislative
Foreclosure Filing Surcharge Bill Moving in New Jersey
By: Chris Abeel, Vice President, Corporate & Governmental Affairs

As if foreclosures aren’t already costly enough here in New Jersey, buckle your seat belt because some lawmakers want to tack on an $800 surcharge for each filing, at least for the foreseeable future.

Legislation (A2036; S2344) has begun to move in Trenton to create a Foreclosure Prevention and Neighborhood Stabilization Trust Fund.

Political & Legislative
One Step Closer to Bringing Electronic Lien and Titling to New Jersey
By: Chris Abeel, NJCUL Vice President, Corporate and Governmental Affairs

Almost everything we do today—from paying for a cup of coffee to hailing a “cab” to booking a flight or hotel—has gone digital. These processes are quick and simple. No paperwork, no paper receipts—or statements even.

Political & Legislative