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Automation in Indirect Lending

By Tiffany Williams, Vice President, CUAC

Prior to joining the CUAC family earlier this year, Amarillo Community Federal CU, like many other credit unions across the country, was operating an indirect program using a patchwork of manual tools. Scott Rose, the new President and CEO, began to look at all facets of the credit union’s operations to determine how best to become more efficient and effective. The indirect lending program was one of his first stops.

ACFCU relied upon a tedious process of retrieving applications from Dealertrack and RouteOne which then required data entry into their core processing system’s application tool and then manually providing the dealer a call-back. This arduous process created a slow-down with delivering timely decisions to their dealers which ultimately had a negative impact on their pull-through ratios. “We had a supportive dealer base with a competitive indirect program – we just needed an automated delivery channel to process applications and loans much faster,” explained Scott Rose.

By partnering with CUAC, the credit union was immediately plugged into a system that has completely automated the process from start to finish. Gone are the days of manually pulling the applications from Dealertrack or RouteOne and keying into the system. Applications are delivered to ACFCU with all of the data needed within seconds which has allowed them to dramatically improve upon their call-back time. “This process has completely revolutionized the way we handle indirect transactions and we could not be happier. Our dealers were excited to see that we could make such an improvement to our call-back times in such a short period,” said Mr. Rose. The CUAC platform has also afforded the credit union the ability to automate their decision process. Kurt Howard, EVP of CUAC, explained this enhancement and its impact on the credit union’s lending goals. “The CUAC platform has a very robust decision engine that will allow ACFCU to fine-tune their lending policy over a period of time to maximize automation while minimizing risk. We will work closely with them as their program matures to finitely nail down where they can maximize the automated capabilities of the system while mitigating any unnecessary risks.”

CUAC has also helped ACFCU transform their funding operation for their indirect loans. Previously, the credit union was required to manually complete the discounting and funding process along with cutting a check to the dealer for loan proceeds. With CUAC’s help, the settlement and ACH process is completely automated which has also increased their overall funding time. As Mr. Rose explained, “Dealers are obviously concerned about cash flow and the quicker we can remit loan proceeds, the better our value proposition is to them. We are competing against captive finance companies, national and regional banks as well as credit unions in our own backyard. For us to stay competitive, we need to ensure that we are taking advantage of all available technology.”

The other key component to ACFCU kicking their program into overdrive was their ability to rely upon CUAC for after hours decisioning. Most people are buying cars after work and on the weekends. The credit union needed to have coverage at this time to adequately compete. “I felt like we were missing the boat on a lot of applications because we could not render a decision until the following business day on a significant number of applications. Most dealers want to have a home for the loan and put the customer in the vehicle during those times. Utilizing CUAC’s after hours support, we can now make sure ACFCU is at the point of sale regardless when people are buying cars,” explained Mr. Rose. “We can also take advantage of this service during training days, vacations, etc. which gives us real peace of mind.”

CUAC is very proud to have partnered with Amarillo Community FCU and look forward to working with the credit union to bring further enhancements such as eContracting and Digital Funding. We appreciate their faith in us to assist them with taking their indirect lending program to the next level and beyond.

If you are interested in taking your credit union’s indirect program to the next level, please reach out at khoward@cuac.com or online at www.cuac.com.