Foreclosure Crisis Scenario Case Paper
MEMORANDUM
TO: Tamara Vrooman, CEO
FROM: Véronique Lafond, Executive Assistant to the CEO
DATE: April 27, 2009
RE: Credit Line Portfolio
Problem:
Vancity is faced with an expected shortfall of $24 million if we do not reprice our line of credit portfolio. We must decide what actions to take to ensure our own financial viability and meet our members’ expectations while adhering to our Statement of Values and Commitments.
Recommendations:
We should reprice our line of credit offerings. This will be seen as an unfavourable decision by our members but is a decision that we must make with confidence.
Analysis:
The Dilemma
In the wake of the 2008 financial crisis we find ourselves at a crossroads. As you know, the spread between …show more content…
The risks of choosing this decision and the negative aspects it might create can be overcome with careful planning and transparent communication with our members.
Implementation:
You should implement the decision to reprice the line of credit portfolio. You should begin by creating a customer contact plan, including all of our high priority members. These member should be contacted personally as they hold most of our outstanding loans. You should explain the situation to these high-priority members in a clear, concise and transparent manner: Describe the situation to the member in as objective a manner as possible, outlining the interest rate issues and the issues we are currently faced with Explain to the member how you arrived at the decision to reprice their credit line and how this will benefit member and their institution. Explain to the member the long term ramifications of not repricing the loan and how this could adversely affect not only us as a company but each and every member. Remind the member that they are an owner of Vancity and that by ensuring Vancity’s success as a financial institution, we are holding their best interests in
TO: Tamara Vrooman, CEO
FROM: Véronique Lafond, Executive Assistant to the CEO
DATE: April 27, 2009
RE: Credit Line Portfolio
Problem:
Vancity is faced with an expected shortfall of $24 million if we do not reprice our line of credit portfolio. We must decide what actions to take to ensure our own financial viability and meet our members’ expectations while adhering to our Statement of Values and Commitments.
Recommendations:
We should reprice our line of credit offerings. This will be seen as an unfavourable decision by our members but is a decision that we must make with confidence.
Analysis:
The Dilemma
In the wake of the 2008 financial crisis we find ourselves at a crossroads. As you know, the spread between …show more content…
The risks of choosing this decision and the negative aspects it might create can be overcome with careful planning and transparent communication with our members.
Implementation:
You should implement the decision to reprice the line of credit portfolio. You should begin by creating a customer contact plan, including all of our high priority members. These member should be contacted personally as they hold most of our outstanding loans. You should explain the situation to these high-priority members in a clear, concise and transparent manner: Describe the situation to the member in as objective a manner as possible, outlining the interest rate issues and the issues we are currently faced with Explain to the member how you arrived at the decision to reprice their credit line and how this will benefit member and their institution. Explain to the member the long term ramifications of not repricing the loan and how this could adversely affect not only us as a company but each and every member. Remind the member that they are an owner of Vancity and that by ensuring Vancity’s success as a financial institution, we are holding their best interests in