Credit unions are eyeing further increases in market share. Noting last year's big gains, Adrian Dominguez, CEO of Credit Union Acceptance Co. in Houston, says the increase in automotive lending "was absolutely crazy, to put it bluntly."
His company, which links 110 credit unions to more than 600 dealers, projects a 10 percent drop in loan volume this year. But, Dominguez says, "I think there is still an opportunity to grab market share."
Credit unions showed an aggressive streak with the Invest in America loan program. The program offers low-rate loans on GM and Chrysler products, along with discounts offered to credit union members by the automakers. Financing is available through 1,181 credit unions.
Through March, the program sold 85,847 new vehicles.
Invest in America began in December as a test program in the Midwest, organized by the Michigan Credit Union League.
Credit Union Direct Lending in Ontario, Calif., helped launch the nationwide program in February with CUcorp, a suburban Detroit marketing company. CUDL links more than 700 credit unions to 9,000-plus dealers.
Last year, the company added more than 100 credit unions and 1,300 dealers, says Joe Greenwald, CUDL vice president of marketing and communications.
Credit Union Direct Lending will look for more opportunities to work directly with automakers, Greenwald says. Last month it ran a pilot program with Kia Motors America in the Northwest.
After the credit collapse, credit unions were positioned to expand lending because of their conservative underwriting policies. Says Greenwald: "Credit unions were a little more prudent in their lending practices, so when things turned, they didn't turn as [bad] on credit unions."
Credit unions and dealers are learning to deal with each other. Indirect lending — making loans that originate at dealerships — is new for many credit unions. Donnelly advises his fellow dealers to make sure their paperwork is "absolutely perfect" because the approval process can be slow.
But he does not regret sending loans to credit unions. In the credit crunch last year, Donnelly says, "They basically saved our butts." c