Credit unions generate record-setting originations pace in 2017

ONTARIO, Calif., and HAUPPAUGE, N.Y. - 

Credit unions continue to make significant strides in booking retail installment sales contracts and vehicle leases. CU Direct and GrooveCar’s CU Xpress Lease recently highlighted just how much success they enjoyed in 2017.

In fact at CU Direct, 2017 represented a record-breaking year.

Credit unions funded 1.8 million contracts through CU Direct’s Lending 360 and CUDL lending platform, generating a record $39 billion in credit union auto paper in 2017, and surpassing the company’s record $32 billion dropped into portfolios in 2016.

Further reflecting its growing marketplace strength, CU Direct credit unions have increased auto originations 100.8 percent since 2013.

Officials insisted that CU Direct credit union partners, as an aggregate, became the largest auto finance provider in the nation in 2017, experiencing 16.2-percent growth, the second highest loan origination growth rate among the top 10 market holders in the nation, according to data from AutoCount.

The company signed new agreements with 71 credit unions in 2017.  At year’s end 1,117 credit unions, serving 47.8 million members, were utilizing the company’s network of technology, including innovative platforms (CUDL, Lending 360), analytics and reporting (Lending Insights), auto-shopping tools (AutoSMART) and retail lending products (OnSpot Financing).

“We are pleased to once again provide a strong return on investment to our shareholders,” said Tony Boutelle, president and chief executive officer of CU Direct.  “Credit unions continue to demonstrate their ability to compete with banks and win in the auto lending marketplace.

“We remain focused on delivering innovative lending technology that helps our credit union partners make more loans and create a better member experience,” Boutelle continued.

And as a result of the auto finance performance, CU Direct also announced that the company’s board of directors approved a 3 percent cash dividend to its credit union shareholders for a record 13th consecutive year.

CU Direct continues to deliver a strong return on investment, generating exceptional value for its credit union shareholders. The company has grown from nine shareholders in 1998 to 108 shareholders in 2017.

CU Xpress Lease releases results for 2017

Meanwhile, GrooveCar’s CU Xpress Lease, the national vehicle lease program for credit unions, recently announced its 2017 performance results, too.

In 2017, nearly 15,000 leases were written by the operation. Since launching in 2006, more than 105,000 leases totaling greater than $4 billion have been funded, and each credit union has been repaid the full residual amount on more than 50,000 matured leases.

“CU Xpress Lease continues to outperform the competitors to deliver a program credit unions can compete with at the point-of-sale,” said Robert O’Hara, vice president of strategic alliances at GrooveCar.

O’Hara highlighted new programs are continually being added to help credit unions reach their lending goals. Making CU Xpress Lease unique are the one-on-one consultations designed to work with credit unions on strategies to penetrate markets served. 

“In southern California, for instance, CU Xpress Lease is seeing increased traction through expansion activities in that region along with the addition of a dedicated dealer relationship manager for that territory,” O’Hara said.

“Working directly with our partners and dealerships is just one of the ways we accomplish increased reach,” he continued. “This is one of the hottest lease markets in the country, credit unions without a lease program will miss out on nearly 70 percent of the new vehicles sold.

“Overall, leasing represents 30 percent of all new-car sales across the U.S., in urban areas this number climbs to 70 percent at select dealers. The goal for credit unions is to be competitive 100 percent of the time,” O’Hara went on to say.

Some other takeaways from 2017’s performance within the CU Xpress Lease program were:

• Average FICO score of 770

• Average term of 36 months

• 65 percent look-to-book

Because CU Xpress Lease manages and assumes all risk at lease maturity, for instance, collection of lease end fees, including termination fees, over mileage charges, excess wear and tear damage, and other fees, popularity of the program continues to climb. The following are just some of the ways the program reduces the burden on credit unions and their members:

• No surprises wear and tear lease return process

• Credit unions paid full residual amount on all matured leases — more than 50,000 leases

• Build and manage dealer relationships

• A team of lease specialists at the credit union’s disposal