"You do have to meet with dealers and get their trust. It is working. It's slow progress because there are so many dealers. I've got to do my regular job plus go out. I try to keep a lot of phone contact so they don't forget about us," she added.

"Growth is definitely back up this year. We hit bottom, and we can see the peak coming back up. We had a good 2009, and 2010 is starting up better than 2009. I think consumers are a little more at ease."

Credit unions in the Phoenix area, she noted, have pretty much remained strong in auto lending. A few have cut back, but credit unions haven't taken the hit banks have seen.

"We have the money and have continued our stride," Foote indicated. "The dealers appreciate that."

That doesn't mean indirect lending doesn't present some challenges to the credit union. There's a lot to look at before making the loan. The credit union doesn't get to interview the member and must rely on the dealer's word to a certain extent. The credit union must be careful and prudent.

A plus, of course, for indirect lending is the opportunity to expand the relationship with someone who joins at a dealership in order to get a good rate on a vehicle loan. During the past year SunWest has beefed up its efforts to cross sell to those new members.

"We want the full membership, not just the loan. So far we're doing well," Foote said. "We welcome them to the credit union and go over the products we offer. It seems a lot of people are leaving banks-with all the fees and other things that are going on-and coming to credit unions, which is good."

SunWest got into indirect lending in 2003. When the credit union switched from a field of membership that involved a few SEGs to a community charter, it meant an opportunity to reach out to a larger demographic.

Steve Kutrubis is vice president of Credit Union Advantage, the Arizona league's indirect lending program. The program was launched in 1994 with a handful of credit unions, and 30 credit unions now participate.

"Lending is down statewide compared to 2006," Kutrubis said. "In 2006 we did 5,000 loans a month. In January this year, we did 1,100 loans. In April, we did 1,500."

Kutrubis agreed with Foote that credit unions are being prudent about loans and verifying everything. It used to be if someone had an excellent credit score, the credit union wouldn't ask for proof of income. Now everybody is asking for proof.

"Have your checks and balances in place, have programs and policies you're comfortable with, and build a relationship with the dealer. Start slowly, and you should be fine," Kutrubis advised.

He also sees credit unions following SunWest's pattern in cross selling new members acquired through indirect lending. Some credit unions have programs in place that make use of the fact they already have credit bureau information in front of them.

If that data indicates the new member has four or five credit cards and a second mortgage, the credit union can discuss consolidating those loans.

As for the importance of credit unions to auto lending in Arizona, "I would say when you put all of our credit unions together as one program, we're definitely in the top three or four lenders. Obviously you're competing with Chase and others, and manufacturers such as Toyota are offering rate incentives," Kutrubis said.

"The thing dealers have related to us is that some banks have gone by the wayside. The credit unions have stuck around. They know the credit unions are here for them. We've had the indirect lending program for 16 years and the dealers in this state have always seen credit unions as a viable source."

As for the future of credit union auto lending, "It will go back up," Kutrubis predicted. "Looking at what we're doing now compared to three or four years ago, it can only go up. Once people have jobs, cars are the way to get there."

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