McGregor has his own numbers to back up those claims, too–his business is up 75% over last year. He credits the increase to new credit union clients who have signed on to the service, and an increase in business for existing clients.

"If I separate out our clients who were on the system last year, I'd say they're responsible for almost half of our growth, probably around 30%," he said.

McGregor said dealers aren't required to use captive financers, and now that struggling captives aren't offering the incentives they used to, the first lender to respond favorably to a customer's application will probably get the business.

"Ford Credit will offer other kinds of financing to dealers, like the mortgage on the dealership property, for example, so they expect a certain percentage of that dealer's business. There are programs in place that have an impact, but as a general rule, captives compete head-to-head with credit unions and banks," McGregor said.

ILT is known for DILLS, an acronym for Dealer Indirect Lending and Leasing System, which is a Web-based indirect lending management system. DILLS interfaces with the two main applications dealers use to work with captive lenders, RouteOne and Dealer Track. That interface allows dealers to submit applications to captives and credit unions simultaneously, which not only saves dealers time, it gives them a back up financing option.

Michigan Credit Union League President/CEO David Adams agrees that dealers are more concerned with selling cars than captive lenders.

"Ultimately, the dealer doesn't want the customer to walk away without buying a car. If credit union financing helps to close the deal, then of course dealerships are going to be more open to working with them," Adams said.

The Michigan league uses ILT technology to offer indirect lending services to member credit unions through its wholly-owned service corporation, CUcorp.

ILT developed a Web-based loan origination package for CUcorp called CUDILS, which first runs the application against pre-set credit union approval parameters, automating approval in many cases without having to wait for a human response from the credit union.

If the applicant does not qualify for automatic approval, the program alerts a loan officer with a desktop pop-up screen that increases response time. The system also allows for real-time chat sessions between loan officers and dealers, which not only increases the quality and speed of communication, it documents the interaction, too.

"Dealers who have seen the system have definitely liked it, and would like more credit unions on board," said Alan Babcock, CUcorp vice president of strategic solutions and a member of the ILT advisory board.

In addition, ILT provides an employee for CUcorp customers to serve as a dealer sales representative, selling the system to dealers, assisting them with installation and staff training, and maintaining a working relationship with the dealer so it continues to use the system.

"When we first partnered with ILT, we didn't have a dealer rep, and had a number of credit unions who didn't have the resources to work with dealers. This takes part of the burden off the credit unions," Babcock said.

Adams said he's noticed more credit unions are hiring lending staff who have experience working with auto dealerships, allowing them to "talk the talk" with dealers. The league leader also said that overall, he thinks that credit unions are discovering a renewed interest in auto loans.

"Part of it is hiring the right people, but part of it is also making a commitment to not give up on the new and used vehicle loan business. It's tempting to throw up your arms and say it's too hard to compete and go focus on mortgage loans instead, but savvy credit unions are figuring out that there is a way to get that business," Adams said. –[email protected]