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%.
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The Top 5 Credit Unions in Indirect Loans Outstanding |
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Data as of March 31, 2005 |
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$ of Indirect |
Point of Sale |
Outsourced |
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|
Rank |
Credit Union |
St |
Loans Outstanding |
Indirect Loans |
<pIndirect 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