What's the Dilly-o with underwriting & decisioning: a buyer's guide for credit unions

The Dilly-o

Our verdict: keep fair lending testing and accurate decline reasons as must-haves when you buy, whatever the new rule says. Notice duties did not change, and NCUA examiners are reviewing loan underwriting this year.⁶⁷ Choose a vendor that already connects to your core, and model its fees on your real loan volume before you sign.

How we'd size up a vendor

1. Reason accuracy - can the engine name the specific principal reasons its model used for each decline?
2. Fair lending testing - how often does the vendor test its models, and will it share the results? The CFPB says robust fair lending testing of models should include regular testing for disparate treatment.⁸
3. Core fit - is the vendor connected to your core today, or will you pay for a custom build? Ask to see it running at a live credit union on your core.
4. Exit terms - what does it cost to leave if the model underperforms? NCUA notes that some credit unions accepted heavy termination penalties they thought were fixed, when those terms are often negotiable.⁹

What changed this year

The National Fair Housing Alliance and two fair-lending compliance firms have sued the CFPB over the new Regulation B rule.¹⁰ On July 13, 2026, the OCC, FDIC and NCUA issued guidance on credit risk when lending to borrowers not legally authorized to work in the US.¹¹ That guidance expects underwriting to assess the source of repayment, repayment capacity and overall financial condition.¹² The open banking rule under Section 1033 was still under review as of October 2026.¹³ If you plan to underwrite on members' account data, we'd ask each vendor how it gets that data today.

Will it work with your systems?

Q2's site lists AltFi Lending among its products.¹⁴ On the core side, we've confirmed that Zest AI, Algebrik AI, Clutch, DigiFi and LendAPI are listed on Jack Henry's Fintech Integration Network for Symitar.^C Ask your provider which decision engines it connects to, and who maintains the link when either side upgrades.

What other credit unions did

On March 13, 2023, Verity Credit Union, then a $735 million credit union in Seattle, announced a partnership with Zest AI.¹⁵ Communication Federal Credit Union put Scienaptic AI into production nearly a year after announcing its selection.¹⁶ We'd ask each vendor for references at credit unions that have gone live, and ask them how long it took.

What your examiner will ask

NCUA's 2026 priorities say examiners will review credit administration, including loan underwriting, Allowance for Credit Loss methods and charge-off practices.⁷ Where lending is outsourced, they will also assess your third-party risk management.¹⁷ NCUA has also seen seemingly healthy credit unions fail within months when indirect lending programs spun out of control.¹⁸ Have your vendor due diligence, model documentation, fair lending test results and override reports ready before the exam starts.

What it costs

We'd build your own cost model from your real loan volume before you compare quotes. Watch the fee unit, which can be per application, per decision or per funded loan, and get its definition in writing first.¹⁹²⁰ One 2026 review puts Scienaptic's implementation at 8 to 14 weeks and Zest AI's at 3 to 6 months.²¹ NCUA guidance says third-party contracts should address default, termination and escape clauses.²² Negotiate those terms before you sign.

Food for thought

The new rule faces a lawsuit from the National Fair Housing Alliance and two fair-lending compliance firms.¹⁰ If your vendor drops disparate-impact testing, ask what you would show your board if the rule changed again. We think the safer bet is a model whose fair lending results you could explain to your board under either rule.