Matz Shows Indirect Lending Bias
It's true that some credit unions should probably not attempt indirect lending. An extraordinary commitment of resources is required for a credit union with less than $50 million in assets to be successful. However, for larger credit unions, the benefits of indirect lending far outweigh the risks. In fact, the evidence shows that a well-run indirect program is nearly always associated with, if not necessary for, a well-capitalized, profitable and effectively managed credit union. Since it is practically indisputable that, in the vast majority of cases, the decision about financing the purchase of a new or used automobile is made at the dealership, the failure of a credit union to offer indirect lending is not only a disservice to members but practically removes the credit union from the auto lending marketplace.
Matz and all NCUA executives should be more circumspect in their remarks so as not to unnecessarily alarm credit union executives or NCUA staff regarding the risks of engaging in responsible indirect lending.
William C. McGregor, President
Integrated Lending Technologies LLC, Salt Lake City