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CU System
Auto sales reports dont discourage Express-News FCU
SAN ANTONIO (10/11/11)--Undeterred by a slow auto sales market and a sluggish economy that resulted in layoffs at its primary select-employee group, $6.5 million asset Express-News CU in San Antonio saw an opportunity to launch multiple campaigns to generate more auto loans. Nationwide, vehicle loans outstanding have increased a modest 0.2 % through August with a 9.4% decline in new-vehicle loans offset by a 6.1% increase in used vehicle loans, according to the Credit Union National Association. “The economic recession resulted in massive lay-offs at our primary select employee group,” Linda Tudyk, Express-News FCU president, told the Texas Credit Union League (Loan Star Leaguer Oct. 7). “Those fortunate enough to keep their jobs were reluctant to take on new debt. “However, it seems that things have stabilized now and those remaining employees are feeling much more secure in their future with the newspaper. That security is reflected in an increased number of loan applications.” Express-News CU increased its loan portfolio by $72,188 in loans in September, primarily through auto loans, Tudyk added. The credit union wrapped its summer loan program in late August and immediately launched a fall promotion. Express-News CU is using its website, social media and in-branch promotions to generate interest in the fall auto loan program. “It can be pretty hard to compete against dealer rates, but we’re doing our best,” Tudyk told the Texas league. “We’re telling our members that whatever rate the dealer offers, come and see us and we’ll try and beat it.” The “meet or beat” it fall promotion has generated a significant number of loans said the credit union. The promotion will end later this month. There are signs that the auto loan market is rebounding. In the January-June period, new auto loan originations were ahead 15% over the same period in 2010, according to Equifax’ latest monthly report on automotive consumer credit trends (Automotive World Oct. 4). Although the June auto loan origination total of 1.7 million was slightly lower than the March total of 1.8 million--the highest 2011 monthly total---it still represented almost an 11% increase over the June 2010 level. As a monthly total, June 2011’s loans were greater than the 1.6 million originations from August 2009, during the heavily promoted auto manufacturers’ 'Cash for Clunkers’ incentive program. Also, there was discrepancy in percentages of subprime loans originated by banks/credit unions/savings and loans--less than 10%--versus those originated by auto finance companies--25%--with Equifax Credit Scores below 600.


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