Indirect Loans Hit Overdrive in 2005

Find out how the top five credit unions in indirect lending grew their balances in the first quarter of 2005.

Indirect Lending has become increasingly popular in credit union land. At year-end, 1,540 credit unions offered indirect loans to their members, an increase of 213 credit unions from 2003. By partnering with dealerships, credit unions are able to originate more vehicle loans and develop new relationships with members and potential members.

Credit unions have a wide variety of options when it comes to getting involved in indirect lending. They can develop dealer relationships on their own, partner with a credit union service organization (CUSO) or contract with another third party vendor.

The top 5 credit unions in indirect loans outstanding took different approaches to increase their balances. While Security Service and San Antonio Credit Union gained most of their balances through direct relationships with dealers, The Golden 1 and BECU partnered with other vendors to generate these loans.

These credit unions have demonstrated that both methods are effective ways of generating indirect loans. The three credit unions in this group that focus more on point of sale indirect loans increased their balances by 9.6% between year-end and the first quarter on average while those that did outsourced indirect loans increased by 11.9%.

The Top 5 Credit Unions in Indirect Loans Outstanding

Data as of March 31, 2005

$ of Indirect

Point of Sale

Outsourced

Rank

Credit Union

St

Loans Outstanding

Indirect Loans

1

Security Service

TX

$2,330,250,021

$2,278,549,124

$51,700,897

2

The Golden 1

CA

$1,103,660,957

$0

$1,103,660,957

3

San Antonio

TX

$899,954,216

$899,954,216

$0

4

BECU

WA

$767,809,366

$0

$767,809,366

5

GTE

FL

$715,249,674

$571,064,220

$144,185,454

More information on current data and trends is available in the Callahan Financial Yearbooks and Quarterly Reports

January 11, 2017

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