Auto Lending Portfolios Want to Grow
Jim Adamczyk can remember receiving an increase in calls from banks interested in FAIRWINDS Credit Union’s auto loan portfolio.
That was as recent as 2010, said Adamczyk, executive vice president of lending, for the $1.7 billion cooperative in Orlando, Fla.
Adamczyk said there are two types of sales: sell and release and sell and retain. If it’s the latter, members are not going to know because the payments and other pertinent information would still come from the credit union. He said it would be similar to an arrangement within the secondary mortgage market should a financial institution sell a loan to Fannie Mae, for instance.
“I can definitely see it being a big issue if it’s a sell and release,” Adamczyk said. “If credit unions are aggregating indirect loans, they don’t really know the borrower and have no history of the borrower. In that case, I don’t know if there would be reputational harm.”