OAKLAND, CA / ACCESSWIRE / December 13, 2022 / Peach Finance, the leading API-first loan management and servicing technology platform, today announced the release of its Self-Service Portfolio Migration™ tool.
A first of its kind in the lending industry, the tool streamlines the migration process and gives lenders the ability to manage migrations themselves, reducing the time, effort, risk, and cost associated with migrating their existing lending portfolio. The tool is suitable for both installment loans and lines of credit, and is offered at no cost to lenders migrating their portfolio onto Peach's platform.
An excerpt from the press release
OAKLAND, CA / ACCESSWIRE / December 13, 2022 / Peach Finance, the leading API-first loan management and servicing technology platform, today announced the release of its Self-Service Portfolio Migration™ tool.
A first of its kind in the lending industry, the tool streamlines the migration process and gives lenders the ability to manage migrations themselves, reducing the time, effort, risk, and cost associated with migrating their existing lending portfolio. The tool is suitable for both installment loans and lines of credit, and is offered at no cost to lenders migrating their portfolio onto Peach's platform.
"When we founded Peach in 2018, the number one issue lenders identified was the challenge of migrating from legacy technology," said Eddie Oistacher, Peach co-founder and CEO. "Our Self-Service Portfolio Migration tool is a game-changing feature, and one we've been planning for the past year. Lenders will see drastic cost savings and an unprecedented ability to control the integrity of their data, along with all the benefits of moving to a modern and fully configurable servicing platform."
Portfolio migrations, also known as portfolio conversions, typically require lenders to migrate a vast amount of data using manual or file-based methods. It's an expensive and lengthy process that often leads to unreliable or incomplete data in the lender's new system.
Peach's approach is fundamentally different, and is made possible by their Adaptive Core™ and Loan Replay™ technology. Peach replays each loan based on a subset of data to accrue daily interest, calculate interest/principal splits and determine loan status. This drastically reduces the amount of data lenders need to migrate and gives them access to full loan histories in Peach's system.
And because lenders use the same API endpoints for the migration that they'll eventually be using to board new loans to Peach, they can conduct the migration themselves with almost no additional training. This eliminates dependencies on third parties, and enables lenders to take their timeline and the integrity of their data into their own hands.
When it comes to the migration itself, Peach's API-first architecture saves time and eliminates the need for manual data entry, minimizing mistakes. The migration can be automated in any sequence, while the migration system's sandbox testing capabilities give lenders full confidence in the accuracy of their data before moving to production.
"Many lenders are still handcuffed to legacy servicing tech for the simple reason that migrating their portfolio comes with too many risks and too many unknowns," said Stewart Watterson, Strategic Advisor, Aite-Novarica Group…(continue to ACCESSWIRE)
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See also: Fintech Nexus News feature on Self-Service Portfolio Migrations.
lender’s priority list. But that doesn’t mean compliance is straightforward, even for lenders with the most earnest intentions. Often, legacy infrastructure is the culprit, making it difficult for lenders to take the actions clearly outlined in the law. Even regulations that haven’t changed for some time—like the—still present significant challenges for many lenders.
The SCRA grants active-duty service members the ability to request certain protections during the period of their deployment, enabling them to devote their energy to serving the country. These protections include a reduction in interest rate to a maximum of six percent on any pre-service loans. While the SCRA in its current version has been law since 2003, the number of recent enforcement actions indicates just how difficult it is for many lenders to comply with the SCRA’s interest rate protections.
Blunt tools in the absence of a scalpel
For example, in October of 2022 the Department of Justice (DOJ) announced that the financial leasing arm of GM agreed to pay over $3.5 million to resolve allegations in relation to
Peach’s approach to SCRA
At Peach, we brought real-life lending experience to the design of our platform. So from day one, we recognized the importance of being able to make retroactive changes to loans. (There are numerous applications beyond SCRA, including our Supported Portfolio Migration.) In the case of SCRA, Peach has long enabled lenders to retroactively change interest rates and waive past fees—as separate, manual actions.
Peach’s approach to SCRA
This was functional, but the ideal way to implement SCRA is to make these changes simultaneously. We now support this capability by leveraging the power of Peach's Loan Replay™ engine, which can make changes to the ledger at any time, and then recalculate a loan’s history in light of those changes. The new combined functionality is as user-friendly for your agents as processing a payment.
Peach’s approach to SCRA
Specifically, the new SCRA feature allows your agents to perform the following adjustments simultaneously on a loan of an active-duty service member:
- Lower interest rates to 6% (and lower the recurring payment during the active-duty period to account for the interest rate reduction)
- Waive fees, if necessary
- Enact these changes retroactively, if necessary, and replay the loan history with the rate and fee adjustments
- Preview the intended changes
“We launched our first product on Peach in six weeks. Eighteen months later.”
John Smith, CMO
Our SCRA functionality is available via API as well as through our white-label agent tool. The white-label agent interface can be seen here:
Peach’s approach to SCRA
Our SCRA functionality is available via API as well as through our white-label agent tool. The white-label agent interface can be seen here:
For those working directly with the API, this can be as simple as sending the following request body to the SCRA endpoint:
You’ll receive a response with either the actual post-SCRA adjusted payment plan or a preview of it. Below is a comparison of a payment plan prior to the SCRA adjustment, and the expected payments after the SCRA adjustment. The SCRA period is in effect for the first two months, and thus you will see the interest rates lowered to 6% in the response body (and the recurring amount due lowered by the amount of the interest rate reduction for the two relevant months). The origination fee has also been canceled.
The breadth of loan data needing to be adjusted means that rewriting loan histories requires the right design and abstractions, and having a built-in layer of abstraction to handle retroactive changes is the only feasible approach. Because of our team’s combined experience in the real world of lending, we know that the need to edit past loan events is inevitable. So we’ve designed a system that makes these changes as painless and automated as possible.
