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CUDL paper offers indirect lending strategies

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ONTARIO, Calif. (3/26/12)--CUDL, a credit union auto lending solutions provider and administrator of the largest U.S. auto lending network for credit unions, has released a new white paper that examines the keys to successful credit union indirect auto lending programs.

The white paper, "Successful Indirect Auto Lending Programs Build on Credit Union Strengths in Relationship and Portfolio Management," profiles a cross section of small to large credit unions that had lower charge-off and delinquency rates when compared with the credit union national average.

The paper reveals how the credit unions formulated their indirect auto lending programs and the underlying processes they developed to help ensure a smooth and profitable outcome.

Among the key factors identified for successful indirect programs were consistency, visibility and accountability in all areas--reporting and analysis, communication, dealer relationship management, underwriting, staff development and training, and portfolio management.

Auto lending continues to be a significant portion of the credit union loan portfolio, accounting for 29% of credit union loans outstanding, with indirect auto loans accounting for roughly 43% of credit union auto loans in the third quarter of 2011. Credit union market share within the auto lending arena has remained above 17% since May of 2011 and currently stands at 17.4%, said CUDL.

The paper points out that indirect auto lending continues to provide credit unions with a viable opportunity to increase loan penetration, grow member base, improve loans-to-share ratio and, as a result, diversify and grow their balance sheets.

Some other statistics revealed are:

  • Nationally, auto loans represent $166 billion dollars for credit unions in the third quarter of 2011.
  • As of third quarter 2011, indirect auto loans accounted for 43% of credit union auto loans outstanding, compared with  37% for the same quarter of 2007.
  • In terms of unit loan volumes, vehicle loans account for the largest share of credit union loans outstanding at 32%, in contrast to first mortgages, which comprise 4% of the total loan volume for all credit unions nationwide.

LaCorp signs Lending Tools for correspondent services

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HARAHAN, La. (3/26/12)--The Louisiana Corporate CU has signed an agreement with Lending Tools (LT)  to provide third-party correspondent financial services for the corporate's members, according to the Louisiana Credit Union League.

LT's Private Correspondent Gateway will replace LaCorp's current automated clearinghouse (ACH) system (eNews March 21). Member credit unions will have a custom single sign-on portal for their ACH needs and in the future will be able to consolidate and expand service offerings. Securing the solution will be LT's biometric multi-factor authentication system.

An added service from LT will mean LaCorp can provide member credit unions with their own branded LT cash management systems to business members. Credit unions will be able to easily provide business members with cost-effective ACH services seamless integrated into LaCorp's Private Correspondent Gateway for processing.

David Savoie, president/CEO of LaCorp, noted that LT has had recent success with other corporate credit union deployments.