SALT LAKE CITY – An indirect lending software program originally created for the Utah League of Credit Unions and now owned by Indirect Lending Technologies, is opening indirect lending doors for credit unions in Idaho and others around the U.S. Dealer Indirect Lending and Leasing Systems – DILLST – was created by Credit Union Lending Services for the ULCU which sold the program to ILT in January 2004. Since then, the Salt Lake City-based company has expanded its credit union client list to include 50 CUs in 12 states – Idaho, Texas, Utah, Colorado, Oregon, Montana, Kansas, Illinois, Wisconsin, Michigan, North Carolina and South Carolina. It expects to add credit unions in Georgia by the end of this year. An Internet-based solution that can be customized for use in different geographic regions. DILLS allows credit unions to set their own underwriting criteria and manage their relationship with dealers. CUs can set up an unlimited number of “loan profiles” that can approve an application, and applications not automatically approved are referred to a CU loan officer for manual review. On the dealer end, a dealer enters a customer's credit application in DILLS, selects up to three credit unions, and submits the application. If the purchaser qualifies for an automatic approval, the dealer receives the CU's decision online within a few seconds, or within minutes if the application is sent to a loan officer for a manual review. DILLS also tracks the status of the loan as it moves through the process so the dealer is notified when the documentation is received by the CU, when the loan is funded or if any problems come up in the funding process. Some Idaho credit unions were users of an earlier version of DILLS since 2002, but since the League announced its endorsement of an upgrade to the program, VP of League Services Kathy Thompson said more credit unions have signed on to use it. “In mid-2003, several affiliated credit unions determined they wanted to get involved with indirect lending, but nobody wanted to create anything from scratch because of the time and effort involved,” she said. When ILT acquired DILLS and released the upgraded version, the Idaho League reached an agreement with the company to be the League's only indirect lending provider. There are nine Idaho CUs currently using the DILLS program. One of the newest ones to decide to use the program is East Idaho CU, Idaho Falls. The $149 million CU is new to indirect lending, and the CU said one of the reasons it decided to use DILLS was it allowed EICU to get involved with indirect lending without having to increase its staff. East Idaho began accepting applications through the DILLS system in May, and from then through the end of September, it received 1,079 applications and funded 362 loans totaling almost $7 million. The average credit score on the applicants on the funded loans was 722. ILT General Manager Will McGregor said one of the features of DILLS that makes it so attractive to credit unions nationwide is that it can be customized to accommodate various indirect lending geographical differences. “The credit union market is a regional market as far as the way indirect lending is handled,” he explained. “The relationships between lenders and dealers and the types of commissions that are paid can differ among regions, and the competition level between credit unions and other lenders is also different in various areas. Recognizing these regional differences, we've associated ourselves with credit union leagues or independent agents that know their area such as Indirect Lending Services in Georgia and North Carolina and the National Buyers Federation dba CarQuotes.com in Illinois.” ILT has relationships with about 700 dealers around the U.S. McGregor said the main difference between his company and other indirect lending CUSOs and companies doing business with credit unions such as CU Direct, Aimbridge and Teres Solutions, is that, “we see ourselves as a technology provider and allow credit unions to operate their own system in their own market the way they see fit. We don't try to homogenize. We believe credit unions are best able to make their own decisions on how to best run their indirect lending program. We just provide the technology. Our technology allows even a small credit union to manage a good indirect lending program competently.” McGregor said he is aware of the Risk Alert Letter NCUA issued in June concerning credit unions' use of third party vendors for subprime indirect lending. Commenting on that, he said, “credit unions need good technology to allow them to compete with banks and the large auto financing companies, and they need solid advice on how to set up an indirect lending program. But they don't need a third party to do that for them.” -

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