UW Credit Union in Madison, Wis., has come a long way with its indirect auto lending since first implementing CU Direct’s CUDL Platform–in more ways than one.
“In 2007, we only funded 920 indirect auto loans for the whole year,” notes Mike Long, executive vice president and chief credit officer for the $2.7 billion asset credit union. “Now, we are up to 1,300 to 1,500 per month. When we first started with CUDL, our dealer relationships were nonexistent.”
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Through the CUDL platform today, UW Credit Union does seven-minute loan decisions and same-day funding. “What started out as a desire to show inventory online has grown into a great relationship with CU Direct,” Long says. “The company has always been a great partner for us.”
Indirect lending and member convenience
Initially, UW Credit Union implemented indirect lending to add member convenience. In the decade-plus since, indirect lending also has evolved into a key member acquisition strategy, as well as a member convenience strategy, Long says
Today, the credit union is the biggest auto lender in Dane County, and No. 2 overall in Wisconsin. “Before using the CUDL platform, we were not even in the top 20 for the state,” Long recalls.
When UW Credit Union’s management team performed its due diligence in 2007, it looked at numerous indirect lending solutions. Long says one of the clinching factors in the decision to go with CUDL was the AutoSMART auto-shopping feature.
“We liked AutoSMART because it linked our members with dealers’ inventory online,” he explains. “We had no inventory online, and we had no online pricing tools.”
Implementing the right technology
“We wanted the technology to be strong and drive value for our members,” Long says. “CU Direct’s technology allowed us to integrate with our loan origination system [LOS] so we could decision loans directly in our LOS.”
Long also notes that frontline employees find it simple to use because the integration with the current LOS is efficient.
“Our teams are able to work in the same platforms they work in every day with other types of loans,” he says. “CUDL and Lending 360 work behind the scenes and integrate with the systems the dealers use. We have been able to integrate everything seamlessly.”
Getting serious about indirect lending
“As we became more serious in 2017, we hired dealer relationship managers,” Long says. “Now we have three dealer relationship managers and an indirect sales manager, whose job is to nurture relationships with dealers. We learned all that from partnering with CU Direct and using CUDL.”
The other big change was seen in loan dollars. In 2016, UW Credit Union booked $88.5 million in indirect auto loans. In 2017, that figure jumped to $181.5 million—a 206% increase. Not surprisingly, UW Credit Union was a 2018 CU Direct Best Practices winner.
Looking back at 11 years on the CUDL platform, Long says so many of UW Credit Union’s original goals have been met—or exceeded.
“When we started, we wanted to make it easier for our members to finance their vehicles with us. But as we realized dealers were trying to finance nonmembers, we expanded and we exceeded our goals each year,” he says. “Through our partnership with CU Direct, we have become a major indirect lending player in Wisconsin and in Dane County.”
Credit Union Magazine’s Summer 2023 issue highlights the lending outlook for the rest of the year, how credit unions leverage fintech companies to boost digital lending, the power of lending partnerships, common Bank Secrecy Act violations, and the shift board members must make when becoming chair.
