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DENVER – After eight years of facilitating the processing of indirect loans for 58 credit unions in Colorado and Wyoming, Bentley Networks’ CU Member Lending program for credit unions in the two states was purchased by CUILA, the Credit Union Indirect Lending Association. Effective May 1, CUILA is administering the program under the name CUDirect Connect. Under the terms of the agreement, CUILA also acquired the employees of CU Member Lending. They will continue to run the program for CUILA out of office space the CUSO owns in Centennial, Colo. and which Bentley was previously leasing from CUILA. Tami Anderson, who was president of CUILA before the acquisition, is now executive vp of the CUSO. Steve Anderson, who was president of Bentley Networks, was hired as president/CEO of CUILA. According to the CUSO, Anderson has worked closely with participating credit unions and dealers since the program’s founding in 1992. CUILA has relationships with 320 dealers, mostly in Colorado and some in Wyoming as well. But those were actually indirect relationships, said Chuck Mabry, president/CEO, Norlarco CU in Denver, that resulted from contracts Bentley Networks had with the dealerships. “So both CUILA and Bentley Networks were middlemen between credit unions and the dealerships,” he said. “What makes indirect lending programs work so well is credit unions provide members with access to vehicles and dealers provide members good quality services. Under the previous arrangement, credit unions had no relationships with the dealers. That was the biggest deficiency in the program CUILA had with Bentley Networks, and that was the piece we felt we needed to get under our control,” said Mabry. “We felt owning and operating the program was the best strategic move.” Mabry said he’s confident Norlarco’s auto loan portfolio can grow “dramatically” because credit unions are now in control of the indirect lending effort. One effect of the purchase Mabry’s already aware of is how quickly dealers are getting paid for transactions. When CUILA dealt through Bentley Networks, it typically took one to two weeks for dealers to receive their checks for transactions. Now, said Mabry, CUILA is able to send dealers their checks in a matter of days. “That makes a dramatic difference in how dealers relate to and view CUILA and credit unions,” he said. Kevin Morse, chief lending officer for Warren FCU, the only Wyoming credit union in CUILA, is also confident CUILA’s ownership of CUDirect Connect will help the $129.4-million credit union increase the size of its auto loan portfolio. WFCU currently has $25.2 million and $13.6 million in its used and new auto loan portfolios, respectively. Last year, it added $4 million to its used auto loan portfolio, but it dropped $2 million on the new side. Morse attributed that to manufacturers’ 0% financing and rebate offers, as well as the overabundance of used vehicles at low rates on dealers’ lots. According to data collected by AutoCount from 27 states, Colorado credit unions in Dec. 2002 had the largest share – 36.2% – of the used car loan share market. The second ranking state was Montana with 27% share of this market. Colorado ranked a close second in new auto loan market share – 17.1%; Texas ranked first with 17.7%. Overall among the 27 states measured, Colorado had the greatest total market share, 26.1%. Morse is hopeful CUILA’s ownership of CUDirect Connect will mean the CUSO will have greater flexibility in pricing loans. Warren FCU does risk-based pricing, but it didn’t have as much pricing flexibility as it would have liked when Bentley Networks was part of the indirect lending relationship. CUILA’s indirect loan volume in 2002 was up 24% from the previous year. It did almost $1 billion in indirect loans in 2002, and plans to do more than $1 billion in volume this year for the Colorado/Wyoming indirect lending program. [email protected]

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