By John Flynn, Open Lending President & CEO
While indirect lending is still a major part of many credit unions’ auto loan portfolios, a report from CU Times showed they were slowing heading into 2020. The COVID-19 pandemic continues to impact the entire economy, so now is a good time to shore up your indirect lending. Given the restrictions many businesses and consumers face on public contact, expanding business through additional agents is paramount. But, if the car buyers can’t get out to complete the typical paperwork for auto loans, how do you get the deals? Additionally, Open Lending can help you say ‘yes’ to more loans! Check us out here.
Dealerships are taking immediate and urgent steps to remain in business, altering how they do business, from virtual showroom tours to contactless delivery of vehicles. Credit unions must work with their dealer partners to help strengthen this model as the pandemic drags on for everyone: credit unions, dealers and consumers. Any friction we can remove, the better.
To remain competitive, both dealers and lenders must look to solutions that allow consumers to complete necessary paperwork online. Leveraging technology solutions can help borrowers complete applications quickly, easily and with fewer errors. Building these robust and streamlined solutions not only help your partners and customers, it can also help improve efficiency across your credit union in the long run. That helps your credit union’s compliance and data accuracy, too.
Furthermore, credit unions should review their staffing models to ensure support when dealerships need it most. Streamlining the process between the dealer and your lending department is paramount for providing even wider windows than in the past. And, when you help your dealer partners by creating a seamless experience and more approvals, they’re more likely to keep sending loans your way. Open Lending can help! Learn more about Lenders Protection here.
Now is also a good time to invest in your partnerships with your dealer agents. Ensure the structure of your deals are competitive at the very least. It may be time to re-evaluate in the current economic environment. A small change can make a drastic impact on their business in the short term and keep them returning business to your credit union – such as decisions across all auto loans in a matter of seconds – 7 seconds to be exact with Open Lending.
Finally, reconsider your decision criteria. Times are tough for everyone, and credit unions were founded on helping the those of modest means who’ve been hit the hardest. So, if a credit union can work with additional data in their lending decisions, you may find you can say ‘yes’ to loans that appeared to be riskier in the past.
Open Lending uses supplemental data to take loans to lower FICO scores safely. We help you to earn higher yields on the loan applications you’re already taking in, increase lending volume, provide better customer service and back loans made through Open Lending through default insurance. Open Lending’s proprietary LP scores have been developed and formulated to 99.2% accuracy.
We’ve been doing this for more than 20 years, so we not only survived, but thrived during the housing crisis of 2008-09. Our methods are tested and operations are ready to serve you.
It is a time of change in many industries. Take time now to make sure you’re investing in your partners and your technology to help your credit union move forward as the world evolves. Your members and your strategic partners will thank you for it.