Insight Financial CU Finds Indirect Lending is Ticket to Cross-selling Members on CU Services
ORLANDO, Fla. - Insight Financial CU credits its indirect lending not only with helping the CU grow its auto loan portfolio, but also increasing member penetration of other products and services it offers. The $356 million, 52,711 member-CU (as of June 30, 2004) has been involved with indirect lending for...
Your article was successfully shared with the contacts you provided.
ORLANDO, Fla. – Insight Financial CU credits its indirect lending not only with helping the CU grow its auto loan portfolio, but also increasing member penetration of other products and services it offers. The $356 million, 52,711 member-CU (as of June 30, 2004) has been involved with indirect lending for 11 years, but VP of Lending George Davis says it’s been during the last eight years that the credit union has worked with Aimbridge Indirect Lending to operate the program that it’s really gotten up to speed. “When we managed the program on our own for the first three years we only had relations with about 20 dealers in Orange and Seminole counties, and we only had one person at the credit union dedicated to dealer relations. But one person can only do so much,” says Davis. Through its partnership with Aimbridge, Insight Financial now has relations with 150 dealers in Central Florida. “Aimbridge has the capability and capacity to do more for us,” says Davis. Consider the following: between January 2002 and June 2004, Insight Financial opened 2,035 auto loans through its indirect lending program for a total balance of $41,228,856. The CU currently has 1,742 loans on its books worth $30,669,990. The share draft penetration rate among these members is 44.36%, and the credit union has also seen significant credit card, line of credit, and money market penetration among these members. In addition, Insight Financial has gained 981 new members through its indirect lending program since January 2002. Davis says Aimbridge processes about 200 loans a month for Insight Financial. The loans typically range from $10,000-$45,000, and the average loan is around $22,000. Beyond processing loans for Insight Financial, Aimbridge’s quality control system comprehensively evaluates loan applications sent in from dealers to make sure the application is compliant with Insight Financial’s standards. All applications have to pass inspection and go through a fraud check before they’re funded. What this all adds up to, says Davis, is that we know the credit quality of the members coming to us through Aimbridge is very good – 80% of the indirect loans financed through Aimbridge have a 680 or better Beacon score – and “that opens the door and gives us an opportunity to cross-sell them on our various products.” To start, about five to seven days after a member closes on an auto loan, Insight Financial sends them a `Welcome’ letter that includes information on the CU’s other products. “We use it as a perfect opportunity to let them know we’re a full service credit union,” says Davis. “A lot of people are still surprised that credit unions have the capacity to be full service and offer products like credit cards.” Davis says he credits the success of Insight Financial’s indirect lending program to the relations it has with the dealers involved with its program. “They know who we are from the multitude of other lending sources they deal with. We try to make as many face-to-face visits with the dealers just to say hi and inquire about any problems they’re facing. It’s all about relationships,” he says, adding that even the dealers get involved with cross-selling Insight Financial’s other products and services. “Sometimes a dealer who also happens to belong to the credit union will tell the customer they belong to Insight Financial also, and that’s a great plug,” says Davis. Insight Financial is very selective with the dealers it partners with. Aimbridge does the legwork for the CU and require interested dealers to provide the company with copies of their financial statements for review. “We trust their judgment in that regard,” says Davis, noting that most of the dealers the CU has relations with are franchise dealer although there are a few non-franchise dealerships in the mix. Aimbridge has relations with 1,200 dealers in the U.S. and 100 CUs in nine markets. Aimbridge Group’s Chief Operating Officer Ann Schmitt says a credit union’s success with indirect lending depends on what the particular CU’s member acquisition strategy is. “Many credit unions see indirect lending as a way to attract members and build member relationships. But others see indirect lending just as an opportunity to put another loan on their books, rather than nurture that relationship,” she explains. “You have to get involved with the member early, that’s key,” Schmitt adds. -
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing. Once you are an ALM digital member, you’ll receive:
Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers,
resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
Exclusive discounts on ALM and CU Times events.
Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Immediate service and consumer experience is king in today’s digital world, but how do credit unions keep up and be more like Amazon and Netflix? This whitepaper details 5 ways your credit union can improve the member experience and create its own unique value proposition.
Many are calling open banking the future of the industry, and drawing attention to the significant advantages it provides both members and credit unions. This infographic outlines the fundamentals of what open banking is, and why it’s important.
Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!
Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
Exclusive discounts on ALM and Credit Union Times events.
Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.