An auto loan portfolio worth $463 million and vehiclelending as a core product for over 50 years were factors that putMission Federal Credit Union ahead of the pack during the biddingprocess for Autoland Inc.

The $2.3 billion credit union in San Diego, which has offeredauto loans since its founding in 1961, covers a wide swath, servingmore than 160,000 members through 23 branches, making it the secondlargest cooperative in the county.

Its Golden State roots were probably also an idealcharacteristic when bids were placed on the table to purchaseAutoland, an auto buying service CUSO in Chatsworth, Calif., onceco-owned by the defunct Telesis Community Credit Union. Proximity-wise, it's a roughlytwo and a half hour drive between Autoland and Mission Federal.

When the news came on July 10 that Autoland, which had beenoperating under the NCUA's control since last March, had beenpurchased by Mission Federal, the overall response from the CUSO'smore than 250 credit unions clients was positive.

“We knew from our own experience that Autoland and Mission Fedshare a successful history and philosophy,” said Debra Schwartz, president/CEO of Mission Federal. “Our sharedfocus on member service and very strategic business models positionus both for future growth.”

Schwartz said that while the contract prevents her fromdiscussing the bidding process details, she was very pleased withthe results. In the end, Mission Federal rose to the top among the CUSO's bidderssubmitting the highest and best bid, according to John Fairbanks,NCUA public affairs specialist. However, he said no specialaccommodations were provided to the credit union regarding thetransaction.

“Selling an operating business is a complicated matter, and NCUAworked with Mission during the closing process to make sure allrequirements were met,” Fairbanks said, adding the agency hadconversations with several interested parties during itstenure as liquidating agent.

Formed in 1971, Autoland became a credit union-owned entity in2007 through Telesis and two other California cooperatives, the$3.2 billion Kinecta Federal Credit Union in Manhattan Beach, andthe $28 million California Agribusiness Credit Union in Buena Park,through CU Vehicles LLC, a holding company owned by the creditunions.

Mission Federal bought the 94% share of CU Vehicles that wasonce owned by Telesis, said Jeff Martin, president of Autoland.Kinecta and California Agribusiness have the remaining 6% portion.Prior to the recent sale, Telesis purchased Autoland in 2007 andsubsequently sold minor interests, retaining a controllinginterest, according to the NCUA.

Schwartz said Mission Federal didn't walk into the bidding arenawith blinders on.

“We are always looking for opportunities to serve our members,as do all of us in the credit union movement,” she explained. “Webase all of our decisions on what's best for our membership, andwith very thorough and thoughtful research.”

Autoland currently serves credit unions primarily in California,Oregon and Washington, Martin said. Acting as a loan deliverychannel to drive loans to the credit unions by helping theirmembers, Autoland's total sales in 2012 were more than $119.7million and loans to credit unions surpassed the $98 million mark,according to Martin. More than eight out of 10 members served bythe CUSO got their loans at a credit union.

The focus now will be on growth with special attention onenhancing service through Mission Federal's resources in thetechnology channel, Schwartz said. Because the credit union andAutoland make positive auto buying experiences a priority, theywill continue on that track, she added.

Indeed, Autoland is prepping to expand by going East, Martinsaid. First on the list is serving credit unions in Arizona andColorado. Another potential step may involve some capitalinvestments – an area that sort of stalled under Telesis'smanagement, Martin said.

What won't change as a result of Mission Federal's ownership isany shakeups within Autoland's management or personnel ranks, saidMartin who noted that it was an important condition.

“The good news is we're plug and play. One of the benefits weget from Mission Fed is it will allow us to grow significantly,more so than when we were with the NCUA,” Martin said.

Still, Martin emphasized that the relationship with staff fromthe NCUA's Asset Management Assistance Center since Telesis wasplaced in conservatorship in March 2012 was a strong one. Schwartzagreed saying the entire purchase experience was positive.

“From the first day I met with NCUA, they told us it will be'business as usual.' We know that their goal is to manage abusiness so that is attractive enough not to liquidate,” Martinsaid.

If the NCUA conserves a credit union, there is typically no change in therelationship between the CUSO and the conserved credit unionbecause regulator's goal is typically to return the credit union togood standing and return it to its members with no interruption ofservice, the agency has said. Those services are often provided byCUSOs.

If a credit union liquidates, whatever its interest was with theCUSO becomes part of that credit union's estate. If the CUSO orothers do not buy that liquidated credit union's shares of the CUSOback, the credit union's interest in the CUSO goes with the creditunion's other assets to the NCUA's Asset Management AssistanceCenter with that credit union's estate.

Meanwhile, Mission Federal is ready to build on its alliancewith Autoland

“This is a first in Mission Federal's history, and represents atremendous step forward for both Mission Federal and Autoland,”Schwartz said.