Well-Managed Indirect Auto Loan Programs Are Essential for CUs
I just read Brett Christensen's comments in the article titled, "Is Indirect Lending a Romp in the Devil's Playground?" in the April 7 issue. In the article he's quoted as saying, "I tried my hardest ... to keep an open mind about indirect lending, and my mind isn't open anymore."
I couldn't have said it better myself. Any credit union executive who took the time to read his railings against indirect lending should be grossly offended. His basic premise appears to be that credit union folks are too stupid to be successful at indirect. According to him, loan officers are so anxious to look good that they will buy almost anything. He must also think that managers who are supposed to be monitoring the programs are just incompetent or that they like the growth so much that they ignore bad underwriting practices.
He was right about one thing. Growth is what motivates credit unions to do indirect lending. People buy cars and get financing at dealerships. If a credit union expects to increase, or even maintain, its auto loan portfolio, it must have an indirect lending program. And, if that program is well-managed, it will be successful, and the credit union members will get the service they expect from their lending institution.
William C. McGregor
Integrated Lending Technologies LLC
Salt Lake City