Case Study: E-Signatures in Lending at a Small CU

Fingers choosing the sign button on a keyboard
By Joseph Lao

4 minutes

Auto-Owners Associates CU realizes increased goodwill with members and expanded loan volume.

Sponsored by eDOC Innovations 

With just over 3,000 members, Auto-Owners Associates Credit Union is one of many small credit unions nationwide navigating the daily labyrinth of membership and loan growth, budgeting, compliance and all the other variables that come with operating a small business in today’s world. Auto-Owners Associates CU has disrupted the “small credit union” mold by making some big changes in the way they serve their members.

Based in Lansing, Michigan, $36 million Auto-Owners Associates CU serves associates of Auto-Owners Insurance Company. Given the geographic landscape of its member owners, the CU closes loans across 26 states. Historically, the organization mailed loan documents to borrowers, incurring significant mailing costs and increased time to closure waiting for documents to be shipped and returned. 

Under the direction of enterprising leadership, Auto-Owners Associates CU recognized the need not only to mitigate mailing expenses and time to closure in the short term, but also to prepare for the technology-centered mentality of younger generations now entering the workforce. 

“We were using a signature pad to close loans for in-branch signing, which was only convenient for local members,” says General Manager Patty Fox. “We knew that we had to be forward-thinking in our efforts to accommodate all members and prepare for the future generation.” 

In June 2016, Auto-Owners Associates CU decided to adopt eDOCSignature®, the automated solution for managing all paper-based business processes from form creation to sending documents for e-signatures from CUES Supplier member eDOC Innovations based in Middlebury, Vermont. Coupled with the adoption of It’s Me 247 online banking with CU*Answers, Grand Rapids, Michigan, the CU positioned itself to reach its members in a more convenient, mobile environment.


Aside from the strategy to implement an e-signature solution alongside online banking capabilities, the credit union’s culture and member relationship made all the difference. 

“Every employee and member was on board with our desire to go digital,” Fox explains. “When we made the switch, internal adoption was easy because everyone was able to visualize the benefit this would have in our daily operations, as well as for our members. Because we are so small, the members told us very specifically, ‘we want these capabilities.’” 

By March 2017, 100% of loan closings for Auto-Owners Associates CU were done electronically. The new user interface eliminated the need to print and mail physical copies of loan forms and, through the online banking platform, links to digital versions of loan applications were made available to members. By digitalizing the loan application process, significant time was saved for the credit union and its members. 

Compliance Considerations 

For small credit unions, compliance can become a substantial pain point when significant change is considered. With fewer than 10 employees, each wearing multiple hats, Auto-Owners Associates CU found the potential auditing nightmares that digital solutions could bring to be very real. “For a credit union our size, we are concerned about being compliant. Switching to an electronic environment raised a lot of questions for us as we sifted through the idea of going digital,” Fox says.

After working closely with eDOC Innovations and CU*Answers on the implementation of its new digital solutions, those concerns were completely alleviated. 

“Compliance efforts with eDOC and CU*Answers were absolutely seamless,” Fox adds. “Their level of regulatory preparation on our behalf eased the burden we felt.” Compliant with rules and guidlines from AICPA and the Federal Financial Institutions Examination Council, the e-signing and mobile banking solutions provided by eDOC and CU*Answers proved to be an exceptional choice for this CU and its members.

Sustainable Benefits

The effort exerted in member relations as well as a willingness to invest in the future has led to immediate benefits. Aside from the goodwill that has been garnered within the member base, Auto-Owners Associates CU has seen total loan closings increase significantly in just a year’s time. In Q1 2018, it closed $1.3 million in loans, an uptick of more than $475,000 closed in Q1 of 2017 (a 58% increase). 

Just nine months after fully implementing the digital environment, the credit union was able to see maintained membership. 

“We are happy with this, as previous years, we have been seeing a decline in our member base,” Fox says. “I feel that the new products introduced last year helped to maintain membership.”

With more than 30 years of experience in the financial services industry, Joseph Lao is manager of sales and business development for CUES Supplier member eDOC Innovations,  Middlebury, Vermont. He firmly believes in the use of technology in facilitating financial transactions to better serve credit union members, clients and industry partners.

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