Four South Florida credit unions to form indirect lending CUSO

MIAMI – Four South Florida credit unions are joining together to form South Florida Acceptance Corp., an indirect lending CUSO. The CUSO will be made up of Tropical Financial CU, Power 1 CU, City and County CU of Fort Lauderdale, and Pam-Am Horizons FCU. Together the CUs command about $1 billion in assets. Originally there were seven South Florida CUs part of a study looking into the new CUSO. Three dropped out and decided to stay with their current indirect lending provider, The Aimbridge Group (formerly Bently Networks). Some of the four CUs involved with the new CUSO are also Aimbridge customers, and will be migrating off of the company’s indirect lending program. “None of us felt we were large enough to run our own indirect lending program. When you’re in indirect lending, the car dealer is in fact the customer. For us to have any impact on a dealer is pretty remote at our size. You put us together and collectively we have a real impact in selection of dealers and how we work with them,” said Greg Blount, president/CEO of Tropical Financial CU and chairman of the new CUSO. Once a very controversial issue in credit union land, more and more credit unions are embracing the indirect lending concept, not only as a way to increase lending, but to grow membership. Interestingly, the four CUs involved in South Florida Acceptance Corp. are going to use a round robin approach to booking loans and adding new members through the CUSO. “A big part of this is we are all community charters for all intensive purposes. We think we can use indirect lending to add new members. If someone comes in as a member of one of the four credit unions, that credit union will get the loan. But when someone who isn’t a member books a loan, we will use a sort of round robin format of adding that member to one of the credit unions,” said Blount. Blount said for example Power 1 CU might get the first member, then Pan-Am Horizons FCU gets the next one and round and round you go. The players in the new CUSO are still determining the amount of capital they will need to pony up to get started. Blount said it would likely be somewhere between $50,000 to $100,000, though they could also decide to pay as they go, depending on the level of business. The CUSO will use Credit Union Direct Lending, the large indirect lending firm based in California, for the front-end piece with dealerships. Blount hopes the new CUSO will be up and running by the start of next year. Someone will be hired to run the CUSO, and that person likely won’t come from any of the CUs involved. Initially the leader of the CUSO will have a two or three person staff, said Blount. [email protected]