ELGIN, Ill. — It's Friday night, do you know where your members are getting their car loans? Before the advent of 24/7 that was an easy question for credit unions to answer. But now that people squeeze more chores (including shopping for a car or even a mortgage loan) into their free weekend time, having a reliable indirect lending service and call center is a basic necessity.
That's been the business of Lending Solutions, Inc, since 1994, said LSI Director John Dowling. LSI is now approaching a record three million approvals, he stated proudly. The company, which specializes in providing transparent loan processing through its call center and the Web supplies CUs with the trained personnel to make provident decisions on loans based on auto-decisioning systems (through the Web) that provides an answer within seconds. Dowling said the system will approve nearly 70% of the applications, but the rest need to be underwritten and if so, automatically go into a queue for a
human touch.
LSI also operates the University of Lending, an interactive lending school co-founded by Rex Johnson that provides training on how to improve loan ratios, bottom lines and member service practices.
If a member phones the call center, they are walked through an application, have their information verified and the rep pulls a credit report(s) and underwrites the loan according to the individual CU's guidelines. "We mirror the same decision the credit union would make," Dowling said.
The members may think they are actually speaking with a CU loan officer because LSI employees are trained to represent the CU from start to finish. "It's really no different than calling the credit union itself," Dowling said. The 200 LSI loan reps that staff The National Loan Processing Center, the company's premier service, answer an exclusive toll-free number and they greet members using the name of any of the 300-plus credit unions they serve. They also cross-sell products and services when appropriate, said Dowling. LSI also works with some 50 credit unions nationwide, which have developed their own indirect auto-lending program or are working with CUDL.
It's all very fast, Dowling allowed, because that's how it has to be. "On the indirect side time is of the essence. If it's Friday night and a member has to wait until Monday morning for an approval on a car loan, well, he or she is long gone to another financial institution. It's that simple. We can provide an answer within a 15-minute time frame."
"If you can't respond, you can't get the loan and these days, with auto sales down generally, a quick response time is even more critical than it usually is," he added.
Making indirect lending beneficial for a CU involves more than just quick response, however. "You can't just initiate an indirect program and assume it will be successful. If you don't have credit union employees knocking on auto dealers' doors and making relationships they aren't going to get the results they hoped for." It's important to offer dealerships a variety of loans to win more business, he said. "Dealers can get anyone to take A and B paper, so you need to be a bit more flexible than that. And you need to be very concrete on collections if you jump into the indirect arena."
LSI has its own collections and outsourcing service to do that, Dowling said, and the company works with 50 CUs on the collections side. "Face it, the indirect member is not your typical CU member; they are usually unfamiliar with credit unions."
LSI has an outbound department that's geared to "developing a deeper relationship with that potential member. It's a challenge, but at the least, we can thank them for the business. You'd be amazed how that one simple act can lead to a growing relationship down the road."
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