White Papers

LOS Decision Engine Optimization White Paper

In the highly competitive auto lending arena, speed is a critical deciding factor in funding more loans.  CU Direct recently conducted a study of indirect auto loan applications submitted through its CUDL Platform, and found that the probability of funding an approved application rose by as much as 55% when the application was system approved versus system countered, manually approved, or manually countered.  Yet, in the same study, it was found that many credit unions do not use their credit decision engine optimally, as less than 10% of loan application decisions are rendered via the decision engine.

Credit Union Lending and Operations Best Practices

One of the greatest challenges that credit unions face is staying current and compliant with the ever-changing regulatory requirements that guide our industry. Many credit unions find themselves overwhelmed with executing processes that help ensure compliance while still remaining competitive in their markets.

Filene Research Study: Lending Opportunities in Unlikely Places

When consumers make large purchases they are offered expensive and confusing credit options at the point of sale. According to recent research by Filene, credit unions have the opportunity to win a portion of this multi-billion consumer lending market. 

Download the white paper that explores the competitive landscape, identifies key consumer needs, reveals key market segments and provides suggestions on how your credit union can get started in this largely untapped market.

Big Data: Using Your Data to Open Deliver Channels and Grow Loans

Discover big data best practices and how your credit union can use its existing lending portfolio data to uncover new revenue opportunities.
This white paper offers five key financial objectives to help you gain competitive traction, insight into risk based lending/pricing, and the FICO score, an understanding of data storage, and tips on how to gain a competitive edge in lending.

Best Practices to Secure Higher Look-to-Book Ratios

Learn about the key practices that several successful CUDL credit unions employed to help increase their look-to-book (LTB) and approve-to-book (ATB) rates in their indirect auto lending program. This white paper offers insights based on the experiences of other credit unions that developed best practices to engage their dealership base and ultimately raise their LTB and ATB performance.

Asset Disposition White Paper

New CU Direct White Paper Features Best Approaches to Effective Asset Disposition. Successful lenders recognize that in order to maximize cash flows from the sale of repossessed vehicles, guidelines and procedures need to be in place to dispose of these assets in a timely and efficient manner. This white paper addresses several components of the asset disposition process that credit unions should consider when evaluating their remarketing practices.

Download this white paper to learn about these best practices and the five performance metrics that formulate the benchmarks used by top-performing remarketers.

Successful Indirect Auto Lending Programs Build on CU Strengths in Relationship and Portfolio Management

Discover how several credit unions have successfully tapped into indirect auto lending to help diversify and grow their balance sheets, while still maintaining a healthy portfolio and meeting member demands for competitive automotive financing. This informative white paper addresses how the credit unions formulated their indirect auto lending program and the underlying processes they developed to help ensure a smooth and profitable outcome.

Case Studies

The Credit Union of America and Scholfield Honda case study examines the keys to developing and maintaining a successful credit union-auto dealer partnership in today’s automotive lending landscape. By looking at their partnership from their separate perspectives, the case study reveals how the credit union and the dealer have forged a vital relationship that has resulted in continued growth for each organization, and sheds valuable insight to the challenges, the solutions and the benefits of their partnership

THE CHALLENGE:
Reduce expenses and grow auto lending portfolio.

Citadel operated a point-of-purchase lending CUSO for nearly thirteen years. After closing the CUSO, Citadel was challenged to make its auto lending program more profitable. It had been using DealerTrack as its indirect lending provider and accrued $30,000 in monthly expenses from application fees, dealer “shotgunning” and paper that did not meet the credit union’s lending criteria. Furthermore, only 23% of the indirect loan applications received was actually funded. Citadel needed a solution that would cost less and allow the credit union to set forth tighter lending parameters for its dealers. During its pursuit to find a solution that would accomplish these goals, the credit union was also seeking solutions that would provide more auto buying services for its members to expand their auto loan portfolio

THE CHALLENGE:
Increase underwriting efficiency and compliance.

DCU determined that its automated underwriting process was substandard and antiquated. Senior level loan officers were reviewing every single application, making it difficult to provide consistent loan decisions. Subsequently, approvals were slow, even for standout members with top-tier credit.

THE CHALLENGE:
Monitor loan performance over time to measure delinquency and loss ratios.
Schools Financial Credit Unions’ loan portfolio was experiencing rapidly rising delinquency and loss. The credit union needed to be able to identify from which areas of their portfolio they were coming from and why they were occurring. However, the tools they were using were inadequate in revealing the issues. Additionally, Schools Financial CU knew that continued loan growth was important, but found it difficult to determine which portfolio segments presented the best opportunities.

THE CHALLENGE:
Automate the processing of retail loan applications.

For eight years, San Antonio Credit Union had been working with a number of merchants in the San Antonio, Texas area to provide point of purchase retail financing to their members. Its process worked, but had challenges that prevented it from thriving like the credit union had envisioned. San Antonio Credit Union’s system for indirect retail loans allowed merchants to electronically submit their customers’ applications; but the system lacked the ability to auto decision, electronically transmit loan documents, and provide ACH funding to merchants. The manual processing of loans and inability to work outside of branch hours made the credit union’s existing system inefficient and ineffective. These restrictions prevented many retailers from initiating a finance program with the credit union on a consistent basis

 

THE CHALLENGE:
Increase loan volume and add new members.

In addition to a desire to increase auto loan volume, as well as add new members, Erie Federal knew that only booking loans in-house meant it was losing substantial business to dealer-originated loans. The credit union sought to add a new member service that would enable members to research vehicles, then apply for loans and get approval prior to visiting the dealership.

Erie Federal also looked for a service that both promoted auto lending as an added benefit to members and enabled the credit union to tap into members’ auto buying process earlier and capture more member loan opportunities.