After seeing a significant amount of success with its indirect lending program, executives at U.S. Eagle Federal Credit Union questioned whether they were actually maximizing its potential. One specific area of concern involved risk management with the decisioning of its loan origination system.
“The NCUA is really focused on credit risk management and continually asks us to validate our program with accurate and reliable data,” says Clint Bower, the credit union’s vice president of consumer lending and collections. “We were relying too heavily on off-site decisioning, and our technology wasn’t pushing nearly enough information to our core system.”
U.S. Eagle Federal Credit Union was founded in 1935 and is headquartered in Albuquerque, N.M. With $850 million in assets and nine branches, it serves more than 84,000 members throughout New Mexico and the four neighboring states.
The use of off-site, hand-written approvals was one example of where U.S. Eagle was looking for help to streamline its operations. Handwritten approvals were very time consuming and hindered growth, Bower says. The credit union representative also had to leave the loan completely to go to another website to conduct ID verification and OFAC checks.
U.S. Eagle also recognized a need to strengthen its network of dealerships, which meant not only expanding that network but also developing closer relationships with its existing dealers. The credit union was more focused on entering new markets rather than acquiring more dealers in its already well-established markets, but didn’t have the manpower or strategy to do so.
Bower said they also felt their portfolio lacked diversification due to a lack of brand awareness in other segments of the auto lending markets they had already reached. Most of U.S. Eagle’s indirect portfolio centered on business from a certain number of dealerships, and executives were looking for portfolio diversification by increasing its number of dealers.
U.S. Eagle found the CRIF Select Complete indirect lending solution fit their needs. “Between the automated decision technology, loan processing services, and the dealer management support, Select Complete helped us overcome many of our challenges,” Bower says. “It put us in a place to exceed previous expectations for our indirect lending program.
CRIF Select specializes in indirect auto lending partner programs. Its integrated, technology-based solutions allow lenders to make loan approvals faster, more accurate, and virtually paperless, delivering lower costs for institutions and better service for their customers and members. Select Complete is a fully loaded offering that provides a turnkey indirect lending solution to guide lenders from start to finish. It’s ideal for any institution wanting to keep personnel costs at a minimum or reel in the profits of an indirect leading program without the responsibility of having to operate any or all of it.
With Select Complete, U.S. Eagle was also assigned a full-time dealer representative to canvass the dealerships not only within its established markets, but also the areas it targeted for portfolio expansion and building brand awareness.
Since partnering with CRIF Select, indirect lending is projected to grow by 21% from the previous year. The credit union processed $140 million in 2014 and, through September, projects to process $170 million in 2015.
The Select Complete lending technology quickly addressed a lot of the risk management and streamlining concerns. “By eliminating the off-site decisions, we began capturing better data, which equates to more accurate reporting,” Bower says. “Select also worked with us to push many credit risk ratios into the core such as payment to income, debt to income, loan to value, as well as year, make, and model of the vehicle. With Select, for example, Bower is now able to determine within minutes the number of Volkswagen vehicles U.S. Eagle has in its portfolio.
Being slowed by off-site approvals is no longer an issue. In fact, general operations are now streamlined to limit costs and drive profits. “Utilizing the right technology, strategy, and services from Select has saved us countless hours,” Bower explained. “Loan processing since moving to CRIF Select has also improved dramatically.”
Together with the Select representative assigned to build and strengthen relationships, the credit union also hired an internal representative devoted to the same purpose. Between them, U.S. Eagle has now entered the highly competitive market in Santa Fe and has seen a tremendous boost in brand awareness where dealers that previously unaware of U.S. Eagle now recognize the value it offers and send business its way.
“We have already exceeded all goals determined by our CFO in terms of loan volume,” Bower said. “And we are already serving more members than we had anticipated.”
CRIF Select provides lenders and dealers across the country with the technology and services needed to compete at the highest level of indirect lending. For a complete guide to indirect lending, please click the button below to request a copy of our eBook, “The Universal Roadmap for Indirect Lending Success.”