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RANCHO CUCAMONGA, Calif. – Credit unions involved with indirect lending – and those who want to be – will soon have a new tool to use from CU Direct Corp. The company is beta testing a full-service indirect lending program called CUDL Complete with two credit unions and plans to start signing additional credit unions up in November or December to go live in January 2005. The company says the new turnkey solution is suitable for credit unions of any asset size – it provides small CUs with services that give them an introduction to indirect lending they couldn’t offer on their own, and it provides larger CUs important expense-saving potential. Mike James, CU Direct Corp.’s new vice president of lending services, has been developing the product for the company since April. The former vice president of lending for Wescom CU ran the back office process for the credit union’s CUDL program and also served on CUDL’s advisory board at Wescom. “Through discussions the board had we determined there were credit unions that wanted to participate in indirect lending but didn’t have the experience or the ability to put a program in place. An indirect lending program can be costly to implement if a credit union doesn’t have the experience or technology to run one, so we thought a product like CUDL Complete was something credit unions would like and wished was available,” said James. CU Direct Corp. agreed, and James was brought on to develop and roll out the product. Among the range of services CUDL Complete provides are: * processing by CUDL of all of a credit union’s applications received through the dealer network; * utilization of each credit union’s underwriting and decision criteria in CUDL’s automated decision engine; * timely application turnaround decisions to dealers; * CUDL-adminstered quality control and due diligence on loan approvals, follow-up for missing or incomplete documentation and assistance in perfecting titles; * back office processing and forwarding of the complete loan package to the credit union for boarding on their data system. James said in offering any indirect lending product, CU Direct Corp.’s biggest concern for credit unions is fraud. We always have to sure we have stop gaps in place to prevent that, and the company has done its due diligence with building in fraud prevention elements to CUDL Complete, he said. In explaining the difference between the regular CUDL, point-of-sale lending program and new CUDL Complete, James said the former allows credit unions and dealers to connect with each other, and the credit union handles all the loan processing. The decision engine is built into the CUDL platform which the credit union uses, but the CU has the option of reviewing any loan that doesn’t automatically match the decision engine parameters and sending the loan back to the CUDL platform. All the loans stay in a CU’s loan portfolio. CUDL Complete, in comparison, handles the decisioning piece as well as the back office funding and the due diligence of paperwork for the credit union. The CU still retains the loan and has the option to review decisions and refer them back to the CUDL platform. A credit union may decide it doesn’t want to be involved in any aspect of the loan decision, said James, and that’s a credit union’s option. Loan decisions are made “within seconds,” he said. In addition to the product features, CUDL Complete includes a dedicated credit union account representative who will support, train and make recommendations to each CUDL Complete CU user to make sure credit unions are proficient with the program’s tools and that everyone involves understands the process and allocation of responsibilities among credit unions, dealers and CU Direct. Each credit union individually can make its own decisions concerning underwriting, funding, loan terms and risk-based pricing. They don’t have to follow the same vanilla terms, James stressed, but each credit union can customize these features according to their policies. James said as a credit union’s policies change, the CU administration can make changes at their end to features such as loan rates by logging into CUDL Complete and “changing the criteria on the fly,” said James. He added that the CUDL support staff will continue to provide CUs with support for the underwriting decisioning piece of CUDL Complete and make recommendations to CUs just getting involved with indirect lending in areas such as handling their loan portfolio, risk, and building relationships with dealers. “CU Direct has the expertise and wants to provide credit unions with enough information and material to make indirect lending a strategic fit for them,” said James. -

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