ERIE, Penn.–The CEO of one credit union here was featured as part of a Wall Street Journal article on how times have gotten tough for repo men.
The article highlighted how many borrowers have been able to keep the repo man at bay by using stimulus checks or by having been given a reprieve by their lender—including Erie Federal Credit Union.
“The usual playbook doesn’t work here,” Brian Waugaman, chief executive of Erie Federal, told the publication.
The Journal reported Erie FCU granted payment deferrals to 16,000 borrowers in April to avoid a sea of loan defaults.
The Journal reported that after Pennsylvania Gov. Tom Wolf declared a business shutdown in March, Waugaman “mustered his staff” to discuss the CU’s $335 million in loans outstanding, about 40% of which was auto loans.
“The auto book was a little scary,” Waugaman told the Journal
At the end of 2019, the Journal noted just 44 of the $588-million credit union’s 11,222 car borrowers were behind by more than two months. In March of 2020, a “default wave was on the horizon. Mr. Waugaman asked his team to restructure loans, but transportation bureaus had closed and they couldn’t file the necessary paperwork.”
Increase in Allowances
“Instead, Erie Federal Credit offered one-month deferrals to 16,000 borrowers, leaving Mr. Waugaman to figure out how to account for them,” the Journal reported. “He raised by 3% Erie Federal Credit’s projections for loan losses from unforeseen environmental factors.”
Erie FCU furloughed most of its 174 employees in early April. With branch lobbies closed, Waugaman has been working from home and taking calls as he walks his chihuahuas around the neighborhood, the Journal said.
The full story can be found here.