RANCHO CUCAMONGA, Calif. – Credit Union Direct Lending is not showing any signs of slowing down the expansion of its indirect lending operations throughout the U.S. The company has sealed its relationship with South Florida Acceptance Corp., an indirect lending CUSO owned by Tropical Financial CU, Power 1 CU, City and County CU of Fort Lauderdale, and Pan-Am Horizons FCU. CUDL President/CEO Tony Boutelle said the partnership is “off and running,” and the CUSO has even closed its first loan. Jim Sturdy, who was named general manager of SFAC, confirmed that a loan was made for a non-member who was eligible to become a member of one of the four credit unions because he lived in one of the three counties served by the four CUs – Palm Beach, Dade, and Broward. The non-member was approved for a loan and has joined City and County CU. For the time being, SFAC’s base of operations is out of City and County’s offices. But once Power 1 CU’s new headquarters are completed near the city of Weston, the base will relocate there. SFAC is the first CUSO to work under the CUDL program. It will be responsible for overseeing all underwriting, back office loan processing and funding of loans as well as coordinating and maintaining dealership relationships for the credit unions participating with SFAC and using the CUDL program. Sturdy said the CUSO has relationships with 400 new car franchise dealers in South Florida. SFAC has set up an account with Southeast Corporate FCU that allows the corporate to transfer funds to SFAC’s account for loans. CUDL in turn sweeps the account and pays the respective dealer via ACH. “To be competitive, you have to be on a level playing field with lenders like Bank of America. We can do that by offering the dealerships a consistent program with consistent rates and an underwriting system for all of the four credit unions. Consistency is required in indirect lending for economies of scale,” said Sturdy. In addition, whereas most dealerships typically mark up rates they get from financing sources, Study said SFAC has straight pass through rates. SFAC in turn pays the dealership 1% of sales price instead of raising members’ rates. “This makes us very competitive to the auto manufacturers’ rebates and zero percent financing offers,” he said. The addition of South Florida brings to nine states the CUDL program is in. The eight other states are California, Nevada, Texas, Oregon, Washington State, Massachusetts, New Hampshire, and Rhode Island. As of March 1, 243 credit unions and 1,848 dealerships were participating in the program. The company funded $332 million in auto loans in March, and Boutelle said CUDL is on target to do $4 billion in loans in 2003. While SFAC continues to facilitate members’ auto loans, Boutelle said Eastern Financial CU is expected to go live with the CUDL program May 1. CUDL said Minnesota and Virginia will also be coming on the program “soon.” -

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