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CRIF Lending Solutions Blog

Expert Insight. Forward thinking. Trusted perspective.

Ask the Experts: Smarter Ways to Spur Indirect Lending Growth (Part 4)

Have any cash riding on Sunday’s big game? ABC News reports that an estimated $4.76 billion will be wagered on this year's game – about 97 percent of it illegally. That's more than the GDP of Barbados.

Not a fan of either team or particularly care who wins? No problem. Millions of dollars will also be wagered on prop bets such as who will win the coin toss or how long the national anthem will last. So if you plan on placing a bet or playing an office pool, best of luck to you. For indirect lending success, financial institutions are far less inclined to rely on luck.

For indirect lending success, smarter financial institutions are far less inclined to rely on luck.

This week, we will continue a popular series we started back in November where we shared a portion of the Q&A following a recent webinar where James (Toby) Smith, vice president of lending for SECU of Md., joined us to share his credit union's success story and insight on how financial institutions can take more control of their programs and apply SECU’s story to address their own challenges.

Here’s more of what was discussed:

Q: How do you handle the membership application at the dealership to bring in a new member?

A: It’s been an ongoing education for our dealerships. A lot of the problem with dealers is that they buy into the myth that they have to jump through a lot of hoops to get people to qualify. So what we’ve done is provide the necessary information to our internal dealer rep as well as our CRIF Select dealer rep, and they’re constantly out in those markets re-evaluating and resetting expectations for the program with the F&I folks at the dealerships. In a lot of our markets, you could have one F&I rep at a dealership and return a month later to find out someone completely new is in that position. So the education for our program is constant so that they understand how easy it is for potential applicants to qualify for membership at our credit union. It’s a balancing act, but it really comes down to boots on the ground.

Q: Is it common in your market for a dealer to pay a fee per funded loan to the credit union?

A: This topic came up during our last advisory committee meeting with CRIF Select. Some of the other committee participants from other credit unions have those fees in place. Here at SECU, our board is pretty conservative about any fees being charged to our members. So that’s something that we haven’t gone down that road to look at from an income and revenue standpoint, but I’ve learned from conversations with peers at other credit unions that it is more widely accepted. I also think that it’s heavily dependent on the markets within which you operate. For example, in Ohio it’s called a pre-paid finance charge. This means that the processing fee is rolled into the APR and charged to the person buying the vehicle. On the other side, we’ve seen states where that’s either not allowed or it is allowed but not a common practice.

CRIF Select indirect lendingIf you’re interested in the whole story of how SECU transformed its indirect lending program and eventually transitioned to sustainable, smart growth that matched its overall and long-term goals, click the button below to request a copy of our case study. If you’d like to listen to more on not only this Q&A, but also Toby’s advice to financial institutions of all sizes, click here to request a link to the recording.

Request Our Case Study

Photo Credit: Shiny Things

If you missed any of the previous parts of this series, you can click here to check them out.

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Complimentary Webinar: Indirect Lending Advice From the Dealer’s Perspective

CRIF Select hosted a complimentary webinar at 2 p.m. ET on Wednesday, May 23 featuring a panel discussion of dealer reps. They will weigh in on what works best as well as their evolving challenges, goals and expectations. Don't worry if you missed it, you can request a free link to the recording.

Request Our  Webinar Recording