How Meritrust’s Indirect Lending Recovered with Help from Open Lending

Meritrust Credit Union in Wichita, Kansas had a successful indirect lending program in 2015 and 2016. In a short time, their indirect lending portfolio doubled — but not long after, the credit union moved toward aggressive underwriting to address tightening margins. Meritrust’s indirect portfolio soon experienced higher-than-normal losses.

To find a solution, Meritrust leadership combined the direct and indirect lending programs, with Consumer Lending Director Heather Gates at the helm. Tasked with designing a sustainable, healthy strategy to rebuild the indirect portfolio, Gates knew the credit union would need to implement risk-mitigation measures and lend to borrowers across all credit tiers. She turned to Open Lending to make this possible.

Since partnering with Open Lending and implementing the Lenders Protection™ program in the summer of 2017, Meritrust has seen huge success with its indirect lending portfolio. Its portfolio now has $52M in total loans with a WAR (weighted average rate) of 12.4%. 

In addition, Meritrust has safely made $25M of those $52M through the AutoPay program, to which Open Lending introduced the credit union. 

“We feel confident growing at this clip because we have a strong partnership with Open Lending,” Gates said. “This increases our ability to serve the auto loan needs of our communities in a way that is sustainable and prudent, and we are proud to help our members with purchasing the transportation they need.”

In 2020, as the global pandemic challenged the financial services industry, Gates appreciated the clear communication between Open Lending staff and Meritrust. The partnership supported necessary changes to the credit union’s in-house underwriting as the market evolved.

For other credit unions considering partnering with Open Lending, Gates offered this advice: Understand why your organization would benefit from Open Lending’s Lenders Protection™ and build an intentional strategy around it for the best ROI.

“Open Lending doesn’t come in with just an out-of-the-box solution that fits everybody — they really listened to the problem we were trying to solve and then said, here’s how, strategically, you can implement Lenders Protection.”

Schedule a demo today to learn how Lenders Protection™ can support your institution’s goals.