Sound Credit Union Uses Open Lending to Expand Loan Availability to Underserved Near-Prime Borrowers

Open Lending Gradient Background
Open Lending Gradient Background

After a weeks-long implementation, Open Lending Lenders Protection™ helps Sound Credit Union generate better yield by approving more near-prime loan applications without unnecessary risk or friction.

Sound Credit Union (Sound) has been serving Washingtonians since 1940. Headquartered in Tacoma, its 27 branches operate with a “service first” mentality that recognizes the people managing their lives behind each transaction. This supportive attitude has cultivated Sound’s reputation with throughout the state of Washington.

“We really stand with our members through all waves of life,” Tammie Atoigue, Vice President of Consumer Lending at Sound Credit Union, explained. It was that commitment that first brought Open Lending Lenders Protection™ to Sound’s attention.

“Our employees focus on listening to our members so we can understand their needs,” Tammie said. “We were aware some people purchasing vehicles from dealerships that were charging interest rates at 25-30% only to drive off the lot and have the car break down. Then they would struggle to come up with money for unexpected repairs. As a community credit union, we want our members to find a reliable vehicle and offer an affordable loan with a reasonable interest rate.”

Open Lending’s Lenders Protection™ program helps Sound evaluate and insure both direct and indirect loans for near- and non-prime borrowers. Sound’s direct loans are processed using MeridianLink Consumer Classic LOS, a robust platform with access to many third-party integrations including an out-of-the-box integration with Lenders Protection™.

Sound implemented Lenders Protection™ within six weeks, allowing the credit union to approve more automotive loan applications and increase yield.

Community-Focused Motivation

Sound Credit Union cares about community enrichment. According to Tammie, one of the institution’s main goals is bringing its surrounding community together. Sound supports over 320 local organizations through donations, scholarships, and volunteering. This commitment to serving the underserved is what first motivated Sound to seek out a Lending Enablement Solution.

“We want to offer our membership financing on auto loans with a reasonable interest rate for vehicles that are reliable,” Tammie explained.

To do this, Sound began evaluating Lending Enablement Solutions including Lenders Protection™. Tammie led the search. “After talking to other lenders using Lenders Protection™, I was confident it would help Sound become a full-service lender. So far, it has diversified our portfolio, increased our yield, and – most importantly – enabled us to help those we serve,” she said.

An Easier, Better Solution

Sound first went live with Open Lending’s Lenders Protection™ in December 2019 on the indirect channel. The program quickly proved itself a success, booking its first loan within a month. Now, Tammie says, Sound’s executive team is fully on board with the solution, enabling the expansion of Lenders Protection™ to the direct side of the business in August 2022.

Smooth Implementation

Financial professionals are largely disillusioned by the implementation process for new technology, becoming accustomed to it taking longer and costing more than expected. Tammie went into the experience with Open Lending expecting that possibility.

“During the sales process every vendor tells you there is little to no IT lift associated with implementation,” Tammie said. “When you tell that to your executives, they laugh at you.”

In reality, Sound’s implementation of Lenders Protection™ took less than six weeks, and most of that time was spent getting new loan types, testing, and training staff.

“As far as implementation goes, we were pleasantly surprised,” she continued. “This was one of the smoothest implementations we’ve ever done, well worth the results and dollars that we put on our books.”

A Predictable Process

Open Lending serves a large number of MeridianLink LOS users like Sound Credit Union. Matt Moody, Vice President of IT Integrations at Open Lending explained why implementation for these customers is often more predictable and much faster than expected.

“Where some LOS’, especially custom ones, can take months or even years to incorporate new technology, MeridianLink Consumer Classic and MeridianLink Modern Experience are both practically self-service,” Matt explained. “The implementation is more of an activation that takes place with a few clicks inside your existing system. It doesn’t require planning meetings or a team, only the business implementation requires an investment of time – a consultation with Open Lending to define program success objectives and desired outcomes to customize the program for your use.”

MeridianLink’s standardized platform makes Lenders Protection™ very easy to implement. It can be activated within minutes and automated based on custom user-determined parameters. Full implementation typically takes between four and six weeks and seamlessly integrates with MeridianLink to work and deliver results completely within the LOS without introducing additional complexity or friction to the loan underwriting and funding process.

Positive Results

Sound Credit Union generates higher net yields by using Lenders Protection™.

“We fund between $1-3 million with Lenders Protection™ every month with an average loan of about $30,000. Our yield has gone up over 8% since booking these loans,” Tammie explained. But that’s not the only positive outcome Sound has seen from using Lenders Protection™.

“There was a big disconnect before we implemented Lenders Protection™. We didn’t have a near-prime program on the direct side. Members that were denied financing would close at the dealer and the loan would still come through us,” Tammie said. “Now we can better serve our members by providing approvals through the direct channel and supporting them throughout their car-buying experience.”

Approve More Near-Prime Loan Applications

Sound Credit Union provides near- and non-prime borrowers with loan approvals faster, more accurately, and with less risk by using Lenders Protection™.

  • Provide more members with approvals. The fully automated technology delivers the lowest rate that will achieve each institution’s custom ROA target in under five seconds with 24/7 availability. Lenders Protection™ includes the ability to manually request decisions and update loan approvals and bind insurance to high-risk loans without ever leaving the LOS.
  • Avoid unnecessary risk. Open Lending’s 20 years of proprietary data and analytics predicts the likelihood of default with 99% accuracy and prices loans according to its unique risk attributes. High quality loan default insurance provided by multiple AM Best “A” rated carriers absorbs more than 80% of loan portfolio losses.
  • Support dealers as a full-service lender. Expanded lending capability increases trust and builds relationships between lenders and dealers.

Open Lending’s Lenders Protection™ provides loan analytics, risk-based pricing, risk modeling, and default insurance to automotive lenders throughout the United States. The solution reduces risk, increases loan approvals, expands lending portfolios, and improves efficiency of the loan origination process. For over 20 years the company has been empowering financial institutions to create profitable auto loan portfolios by saying “yes” to more automotive loans. Schedule a demo to see how Lenders Protection™ can improve your auto loan portfolio.

About Sound Credit Union

Sound Credit Union was founded in 1940 and today is one of Washington State’s largest credit unions. With 26 full-service branch locations throughout the Puget Sound area, Sound provides their over 166,000 members with authentic and trusted financial support and services. Sound is driven by the purpose of standing with members, employees and the community through all waves of life.


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