RANCHO CUCAMONGA, Calif. — CUDL President & CEO Tony Boutelle he's noticed some credit unions have curtailed their indirect lending programs lately, offering the service only to existing members in an attempt to control increasing delinquencies and loan losses.
However, it hasn't hurt CUDL's business any.
"Ironically, our business is actually quite good," Boutelle said. "We've experienced record revenue the last few months, not because things are all that good out there, but rather because we have a few things happening."
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Traditional funding sources like captives and banks have dried up for dealers, and they're now reaching out to credit unions, he said. And just a few years ago, as many as 25% of car purchases used home equity for funding, which has also dried up.
When credit unions tap the general public for loans, they take on the same level of risk that banks do, Boutelle said. It can be managed, but only if the credit union cranks up its core competencies in key areas.
"I think credit unions have a better opportunity to make loans at dealerships than before, but it does require higher skill set," Boutelle said. "Credit unions must have tools on the back end, collections and servicing especially, to make sure they're able to handle the loan."
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