Credit Union Auto Loans Outpace Others in Q2

A California CUSO reported Monday that credit unions using its indirect auto lending platforms generated a record amount of loans in the second quarter, adding another indicator that credit unions are faring well in a challenging market.

CU Direct, which does business as Origence, said credit unions funded a record 1.3 million loans through the Origence Consumer LOS and CUDL lending platforms in the second quarter of 2022, a 23% year-over-year increase, generating $39.5 billion in credit union loans.

Credit unions using the CUDL Network funded 610,819 auto loans through the first five months of 2022. In aggregate, they remain the largest auto lender in the nation, experiencing 20.8% loan growth through May, according to data from AutoCount.

In the first half, 1,132 credit unions used Origence services. Its CUDL Network includes 16,000 auto dealers nationwide. Used vehicles comprised 76% of all cars financed through the CUDL system so far this year, with the remaining 24% being new vehicles.

Tony Boutelle, president/CEO of Origence and CU Direct based in Irvine, Calif., said credit unions on the CUDL Network are outpacing the loan growth of the remaining top 10 lenders noted by data from AutoCount, and are the only lender experiencing double-digit growth year-to-date.

“Credit unions continue to demonstrate their ability to gain market share in the auto lending marketplace,” Tony Boutelle, president/CEO of Origence, said. “Our foremost focus is delivering innovative lending technology that helps our credit union partners make more loans, create a better member experience and gain a competitive marketplace edge.”

Other signs that credit unions are faring well have surfaced in the last two months from CUNA and Experian.

Experian’s “State of the Automotive Finance Market” report released June 2 showed credit unions increased their share of the number of loans and leases in the first quarter for both new and used vehicles.

Credit unions produced 15.8% of new car loans and leases in the first quarter, up from 10.7% a year ago and 13.8% in the fourth quarter. Their used-car share was 26.5% in the first quarter, up from 24.5% a year ago and 25.9% in the fourth quarter, according to Experian.

CUNA, which tracks portfolio balances, reported earlier this month that credit unions held $159.7 billion in new car loans as of May 31, up 10.8% from a year earlier. The balance was also up 2.3% from the previous month, compared with a five-year average gain of 1%.

By comparison, the Federal Reserve Bank of St. Louis found sales of new cars and light trucks from January through June are down 18% from 2021’s first half.

Charlie Chesbrough, Cox Automotive’s senior economist and senior director of industry insights, said Monday that the auto industry continues to have a shortage of new vehicle inventory as the semiconductor chip shortage still shows no significant improvement.

For used car loans, CUNA found balances grew 16.3% to $290.3 billion in May from a year earlier, and rose 2.3% from the previous month, compared with a five-year average gain of 1.2%.

Cox Automotive Chief Economist Jonathan Smoke said earlier this month that the used car market has been accelerating this year, and July’s sales could exceed those of July 2021.