LAS VEGAS — The economic headwinds are building. Delinquency rates are at their highest point in a decade. Auto loan portfolios are shrinking. Charge-offs are holding — for now — but the conditions for a meaningful deterioration are in place, and it won’t take much for the economy to tip into recession. And yet, the prevailing message from industry leaders gathered at the National Credit Union Collection Alliance conference in Las Vegas this week wasn’t doom. It was something more nuanced, and ultimately more actionable: the collection moment doesn’t have to be the end of the member relationship. With the right mindset, tools, and technology, it can be one of the most important touchpoints a credit union ever has.
The Numbers Are Sober
Sohini Chowdhury, a Senior Director at Moody’s Analytics, opened the analytical lens wide. The probability of a economic downturn in the next 12 months is a possibility, she said, and it won’t take much to tip the balance. Tariffs, inflationary pressure on food and gas prices, and wages that aren’t keeping pace have eroded consumer confidence broadly, even as a narrow tier of high-wealth individuals continues to prop up aggregate spending numbers. Her modeling laid out multiple scenarios for the year ahead, with probabilities ranging meaningfully upward depending on how macroeconomic conditions evolve.
James Akin, Head of Regulatory Advocacy at America’s Credit Unions, filled in the credit-specific picture. Affordability, he said, is the word of the year in Washington, D.C., even if no one has fully defined it. Overall delinquency rates have climbed to their highest in 10 years. Net charge-offs are holding steady for now, but auto loan portfolio balances have fallen to their lowest levels since 2022 and are still shrinking. Loan loss provisioning stands at $14.4 billion, which represents a level of pressure the industry hasn’t seen in a decade. Meanwhile, both NCUA and the CFPB are seeing staff and regulatory reductions, a development Akin flagged as a double-edged sword. Less regulatory burden sounds appealing until you realize you still need people to actually reduce the regulatory burden, he noted.
The Collection Moment as a Relationship Asset
Against that backdrop, Jay Mossman, Founder and CEO of Akuvo, reframed the entire purpose of collections work. His thesis was direct: collections isn’t the end of the member relationship, it’s a critical moment within it. The credit union that shows up in a delinquency situation with empathy, consistency, and intelligence has an opportunity to deepen loyalty rather than destroy it. AI, Mossman argued, gives collections teams the tools to do exactly that, to show up less like a recovery operation and more like a financial partner who understands the member’s full picture.
Data Is the New Ground Truth
Several threads in the day’s discussion pointed toward a longer strategic horizon. Millennials will outnumber Baby Boomers by 2030, and the consumer expectations they carry, such as digital-first, channel-flexible, and experience-sensitive, are reshaping what “good” looks like in collections and member engagement alike. Credit unions that can get younger in their customer base, achieve economies of scale, and close the technology gap with larger banks will be better positioned to compete for the loyalty of that cohort, noted Peter Duffy of Industry Analysts. The ones that can’t are at risk of attrition to institutions that offer more seamless digital experiences.
The undercurrent of urgency was real. As Greg Pesci of MessagePay put it, this environment is like being a parent: there’s no manual, and things are moving fast. But the consensus was that there is still time to react, still time to build the right capabilities, and still time to reframe collections not as the last resort of an institution that failed to prevent default, but as one of the most human moments in the credit union member relationship.
