Alliant Credit Union Defies Trends & Expands Automotive Leasing

Last year was not a good one for automotive leasing. More deals among all financial institutions went to loans, and leases at credit union leases grew less than 2%.

One exception was Alliant Credit Union of Chicago ($13.5 billion in assets, 550,400 members). It was the nation’s 14th largest leaser at the end of last year with $70.3 million in leases as of Dec. 31, more than double its leases a year earlier.

Only 88 credit unions held leases on their balance sheets in December. Total leases at Dec. 31 were $4.7 billion, up 1.7% from a year earlier. That’s down from growth rates of 13% in 2019 and 17% in 2018 and 62% in 2017.

Experian’s Finance Market Report showed leases accounted for 26.5% of financing for new cars in the fourth quarter of 2020 among all financial institutions, down from 30.6% a year earlier. The lease rate for used cars was 8.3%, down from 9% a year earlier.

Leasing fell as a percentage of new deals across all risk tiers in the fourth quarter. Among prime consumers, 33.6% chose to finance with a lease in the fourth quarter, down from 35.9% a year earlier, according to Experian.

Experian found lease rates highest in Michigan, New York, Connecticut and Massachusetts, accounting for more than half of new car finance deals.

Alliant does indirect leasing through Credit Union Leasing of America (CULA) of San Diego, which was acquired in 2017 by Westlake Financial Services of Los Angeles.

CULA also helps Alliant with leasing in Michigan, which has the nation’s highest new car lease rate (73%), Colorado (30%) and Florida (41%).

This year CULA will help Alliant as it begins leasing in Pennsylvania, which had a 37% lease rate in the fourth quarter.

“As consumers emerge from the economic and personal challenges of the pandemic, they are seeking affordable, flexible options in vehicle financing, which is exactly what leasing provides,” Jeremy Pinard, Alliant’s vice president of consumer lending, said in a news release Thursday from CULA.

“And, with vehicle leasing representing over one third of all new auto financing in Pennsylvania, it just makes sense for us to offer it to our members there, and to continue expanding that opportunity to more states nationwide,” Pinard said.

The two largest credit unions in leasing by far are Teachers Federal Credit Union, Smithtown, N.Y. ($8.4 billion in assets, 355,731 members) and Bethpage Federal Credit Union, Bethpage, N.Y. ($10.4 billion in assets, 422,120 members).

Bethpage’s leases were $614.7 million as of Dec. 31, up 10.9% from a year earlier. Teachers’ leases at Dec. 31 were $1.1 billion, down 0.2%, but leases are part of its goal to originate $900 million in automotive loans and leases in 2021, up from $500 million last year.

Other credit unions with fast growth in leasing last year included:

• Texas Trust Credit Union, Mansfield, Texas, in the Dallas-Fort Worth metro area ($1.6 billion in assets, 121,870 members) had leases of $270.1 million, up 12.5%. Its total car loans at the end of 2020 were $401.1 million, up 20.6%.
• Visions Federal Credit Union, Endicott, N.Y. ($5.2 billion in assets, 216,719 members) had leases of $136.8 million, up 71.5%. Its total car loans at the end of 2020 were $565.8 million, up 9.6%.
• United Heritage Credit Union, Austin, Texas ($1.2 billion in assets, 69,732 members) had leases of $85.5 million, up 101.7%. Its total car loans at the end of 2020 were $387.5 million, down 2.5%.
• Educational Employees Credit Union (EECU), Fort Worth, Texas ($2.9 billion in assets, 238,336 members) had leases of $60.4 million, up 25.2%. Its total car loans at the end of 2020 were $1.3 billion, up 2.4%.

On EECU’s website, instead of listing auto loans under a loans category, it is listed as “Auto” under “Banking.” From there it shows summaries with links for “Auto Loan,” “Auto Loan Refinance” and “Auto Leasing,” which it said is “available through our agreement with D&M Auto Leasing,” a Dallas company that said it serves all of the North Texas and Greater Houston areas.

CULA’s website lists 28 credit union clients, including Alliant, Bethpage and Visions. Its news release said its lease originations rebounded in the fourth quarter after “the challenges of spring’s COVID lockdown,” and the fourth quarter generated higher originations from credit unions than any other quarter in the past.

“October 2020 was a record-breaking month for CULA, with more than $150 million in lease originations in a single month,” Ken Sopp, president of CULA, said. “We finished the quarter strong, and we are well-positioned for a successful 2021.”