Auto lending is a fiercely competitive business and it’s a very critical element of the relationship between members and member-owned cooperatives across the country.
Consumers expect to be able to be quickly approved – if they’re not already in advance – and drive off with their prized new transportation, and dealers demand trusted technology and processes from the lenders they work with, especially when it comes to indirect lending.
Using the right indirect partner allows credit unions to provide seamless service to members, create new levels of efficiency in their own processes, and make their institution the lender of choice for dealerships who have an array of options before them.
CRIF Select currently works with about 120 lenders and is on track to fund more than $5 billion in loans this year.
Here, CRIF Select president Jeremy Engbrecht discusses how member-owned financial cooperatives and dealers alike benefit from the relationship.
Please describe CRIF Select.
Jeremy Engbrecht: CRIF Select specializes in helping credit unions create, maintain, and grow their loan portfolios with our indirect lending programs. Whether you have a current indirect offering or are looking to start one, we have programs for autos, motorcycles, marine vehicles, RV’s and even tractors … basically anything that moves. Several of our partners have leasing and balloon programs, too.
Our goal is to make your program successful, and we do that with a combination of wonderful technology and services like dealer management, after-hours underwriting, and paperless loan package processing.
Our tagline is “We Make Lending Easy,” so whether your goals are loan growth, member growth, or footprint growth, CRIF Select is the perfect solution
How does CRIF Select help credit unions compete in a crowded marketplace for auto lending, especially in these days of low inventory and high demand?
JE: Our partners do see the benefit of regularly receiving competitive information and ongoing market analysis.
There is also an old saying “out of sight, out of mind,” and since we provide our credit unions with dealer representation, using our relationships keeps their name always in front of the dealership and top of mind. That helps capture business.
Also, our state-of-the-art technology puts our credit unions, no matter their size, at the same level as large banks and captives, from a competitive standpoint.
I think we help our lenders know where they fit in and where they can carve out a niche. This includes knowing our dealer partners and what drives them – what motivates them to send a deal our way – and knowing that it isn’t the same at every dealership. Sometimes it’s fast turn times, sometimes it’s income opportunities, and sometimes just ease of use. We provide all that and that provides an edge in a competitive marketplace.
If the auto market is too crowded, we can also help them diversify and get into other areas like maybe into recreational vehicle and/or marine lending. We are one of the few that have a national RV and marine dealer network. In fact, we’re starting work now with a credit union that’s creating an indirect RV program only, not auto. They see the value in the higher yields and are trying to carve a niche in that growing market. And that’s really smart.
What other opportunities and challenges does CRIF Select help credit unions leverage and overcome?
JE: Each of our credit unions have their own reasons for partnering with us, but I think most of them would tell you that we develop a relationship built on the fact that we’re in this together.
We help some of our partners completely start a new program from scratch. This includes everything from setting up their technology, helping them create their program guidelines, and doing all the heavy lifting to get them into the indirect space. To help with their decision making, we provide them a thorough understanding of the market and competitive information
Sometimes credit unions will come to us because they would like to streamline their processes. We’re working with a credit union now that does indirect lending but without an indirect LOS or any auto decisioning. We’ll take that challenge off their plate as well as resolve their funding issues that arise from some dealers mailing packages, some dropping them off, and some dealers waiting and sending in a bunch of deals at once.
I think the biggest value we provide is that when you partner with us, you can scale your business up without adding staff. For example, we work with a credit union in the Midwest that averages almost 900 loans a month with only two or three people involved and if they wanted to increase their production, they wouldn’t have to add any FTEs to do it.
Conversely, if you hit liquidity or concentration levels, you can also scale your business back a bit, without having to repurpose your own resources, or even let someone go. That’s also true of the seasonality and other peaks and valleys of the auto lending business.
Finally, sometimes the credit union is looking for member growth. Well, the majority of all the deals we fund are new members, and we can specifically target areas where they want to grow in if they are expanding your markets to a new area
How does CRIF Select increase member value for credit unions?
JE: In many ways, indirect lending is like opening a new branch or an extension of your credit union. CRIF Select helps increase member value by making it easy for credit union members to finance with their credit union, at the dealership. We already work with more than 5,000 dealerships and that number continues to grow, so we can help you service members across the country.
CRIF Select gives our partners the ability to offer an easy, seamless, digital experience when financing. We give the members access to their credit union as an option at the dealership. This is important because not many people are excited to shop for a new car loan, but they are excited to shop for a new car, so the dealership is the first place to go.
As an example, we have a partner in Michigan that through mergers had new markets to service. With our dealer management services, we were able to establish a dealer network to expand their indirect program to those areas.
There is also the functionality of pre-approvals for our partners to offer their members, if they would like to pre-approve them before they go shopping at one of their local dealerships.
What differentiates CRIF Select from competitors? For instance, features, ROI, consulting, and support?
JE: The biggest thing is that we make it easy for them from start to finish. We take all the tedious tasks of the initial set up and continuous maintenance off their plates.
We also offer our partners flexibility to customize their program as they’d like. We offer a full-service program called Select Complete that includes the technology, dealer management, loan package processing services, and referred application underwriting, but we can separate that package and create a customized program to meet their specific needs.
Whether it’s picking and choosing what services are important to them, or the ability to control everything they do like setting rates and program guidelines, our credit union partners get all of that with the benefit of CRIF Select consultation
We also make it easy for their dealer partners by putting them on Dealertrack and RouteOne, (which are the popular application portals dealers use), or by taking advantage of our partnership with AppOne, which is popular in the RV and marine space but not all our competitors integrate with.
The best example of something that separates us is our document automation service, also called paperless processing, where we process a loan funding package electronically from start to finish – from dealer to credit union.
We created this product from scratch and the approach we took is we allow dealerships to use their normal process. We don’t want to change the dealer’s habits at all, and we make it easy for them on being on the platforms they use like Dealertrack and Route One. We listened to our dealer partners to remain dealer friendly and only charge on a successes-based model, instead of a subscription service that feels like it is forced on them just to have access to the credit union.
How can my credit union find out more about CRIF Select?
JE: You can visit our website or send us an email at firstname.lastname@example.org. Lastly, please check out our YouTube channel to check out some testimonials and a really cool overview video.