WAUWATOSA, Wis. – Central States Mortgage, which was founded nearly 20 years ago by Wisconsin credit unions to provide mortgage services and which has over the years expanded into other areas such as insurance and title insurance services, is now in the car leasing business. The parent company of Central States Mortgage, CSMC Inc., acquired CU Fleet on Oct. 1. Previously organized as a CUSO, CU Fleet's customer base was limited to members of credit unions in Wisconsin that were shareholders in the CUSO. The acquisition, said CSMC CEO Dick Jungen, solidifies Central States as being a "super CUSO." With over $100 million in assets, CSMC is the second largest multi-owned CUSO in the U.S. The company was ranked by Milwaukee's Business Journal as the fifth ranked company on their list of the 26 largest mortgage bankers in southeastern Wisconsin. The CUSO's list of owned companies includes: Members Mortgage, Premier Title and Closing Services Inc., CU Title Services, United Title Services, Horizon Title and Closing LLP, Central States Financial Services, Noyes & Reilly Insurance Services Inc., and HomeSale Realty which it acquired in 2001. CSMC CEO Dick Jungen explained that 16 of the 41 credit union shareholders of CU Fleet were also shareholders of Central States Mortgage, "so there was a lot of common ownership, and the majority of users were customers of both CUSOs." With the acquisition, Jungen said Central States now can provide car leasing services to all of Central States' 200 clients. "After a person finances a home, the next most expensive item they finance is a car, so it made sense for us to acquire CU Fleet," Jungen said. "The real attraction for credit unions is that if they're already doing title insurance services with us, they won't have to develop separate relationships for auto leasing." Jungen said CU Fleet already has developed a niche of leasing used cars, and CSMC intends to continue to pursue that niche. As interest rates continue to rise on new vehicles, he said he's certain leasing of used vehicles will continue to appeal to consumers. CSMC plans to lease, through CU Fleet, domestic vehicles up to three years old and foreign vehicles up to five years old. It will acquire the vehicles at auctions or use the network of dealers CU Fleet already has relations with to make their fleet available to the CUSO. Central States Mortgage recently expanded outside of Wisconsin and is currently doing business with credit unions in seven other states including Iowa, Illinois, Nebraska, Missouri, Ohio, Indiana, and Minnesota. Jungen said CSMC intends to begin offering the auto leasing services outside of Wisconsin starting with Illinois -"it's a huge market" and the CUSO also has some large credit union clients there already such as Du Page CU in Naperville and First Northern CU in Chicago – and in Ohio where Jungen said the CUSO already has auto F&I business. "Diversification is key," said Jungen. "We started out privately owned CUSO and it wasn't until 1997 when we sold more than 50% of the company to various credit unions. So we've spread out and diversified in a short amount of time." The CSMC president added that the CUSO is still open "on a case by case basis" to adding other shareholders. Over the past seven years since it became a multiple-owned entity, it's added nine CUs as shareholders. The most recent was Community CU, La Crosse, Wis. -

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