By John Flynn, CEO, Open Lending
When $1.4 billion MAX Credit Union realized its credit-challenged members were taking out loans from other financial service providers at higher interest rates, they knew they had to do something to better serve their members, as well as improve the credit union’s bottom line.
Wendy Anderson, senior vice president of customer lending at Montgomery, Alabama based MAX Credit Union, studied the trend to help keep those members with long histories with the credit union from looking elsewhere just because they were credit challenged. “Unfortunately, we saw them going to other lenders at much higher rates, and we just didn’t feel comfortable with that.”
The average credit score in Alabama is 648, well below the national average according to WalletHub.
MAX Credit Union’s lending team went to work to find a program that they could offer to their credit-challenged members, better service approximately 100 preferred dealers, and a competitive program in the local lending environment.
“We’ve seen that the program works for our customers,” Wendy said.
“We’ve seen the program works for our dealers, and we’ve seen the program works for us. We definitely achieved the return on assets we’d like to get, so, of course that’s something we’re all really excited about. But more importantly we’ve really seen the benefit that it’s given to our customers and getting them into the vehicle they need and they want at an affordable rate.”
Even though Alabama is ranked sixth highest among all US states for 60-day auto loan delinquencies (1% of auto loans), according to Experian, MAX Credit Union is still able to serve its members while operating in a safe and sound manner thanks to Lenders Protection. MAX Credit Union started with Open Lending in 2016, and their ROA is well above our national average.
Wendy said that MAX Credit Union has clearly seen the benefits of its partnership with Open Lending. The credit union can better help its members and service their dealership partners that are working with credit-challenged customers. She added that it’s been a win-win for MAX Credit Union, their dealership partners, and ultimately, its members.