Lorentz: When we look at how to apply technology, it's how do we automate those kinds of mindless, brainless tasks — let's say underwriting. How do we eliminate all the easy Yes's and the easy No's and allow that time for the credit union staff to interact with that dealer on the middle section of applications that need more talk? Same thing on the back end. We're looking at soon rolling out some automation capabilities on funding loan validation. So this is about removing all the easy stuff and allowing your staff to work only on those things that should require their attention. Everything else is removed.
Chandler: If you think about the ecosystem — for us it's leasing, but it's the same for retail — it's the lender, the consumer and the dealership. Sometimes the dealership is not held as high on the pedestal of the ecosystem of leasing. I always say to our team, I don't want to just sign up a dealership, I want you to adopt them into our family.
What are the opportunities for credit unions in this low-vehicle-incentive market?
Chandler: We always have kind of our staple manufacturers we went after. We go where the data takes us, and we're really strong on Stellantis products because they don't have a captive as of now, [though] they're creating one. And then we did work with Toyota and Honda — those were the three main ones. What's happened now is the data has opened up a ton more manufacturers. So we're really doing a lot of volume with Volkswagen, with Hyundai, with Subaru. It's expanded for us because we go in based on the data. And in the past because of the incentives by those captives associated with those manufacturers, we couldn't win. But now we're winning. So for us, it's just opened up a lot more dealers and a lot more makes and models.
Black: When COVID hit, we were one of the few lenders that actually stepped into the gap and increased volume. We had people out in the market almost immediately, either on phones or masked up driving by and waving. We had them out there to keep our presence out there. As the prices of things increased, we had this increasing pressure from dealers to get [them] higher [loan-to-value], higher back ends. Judiciously, we did that in little increments. I think what came from that is we go from a lot of large dealer groups of new-car stores who really became closely knit with our program. And so they started almost not really driving our program but helping us create that program for them. We've been able to capture a lot of those large dealer groups over a period of time that we didn't in the past. In the past, they were primarily [used-vehicle dealers]. We had a much higher ratio of new to used — controlled of course by inventories because there isn't a lot of new inventory, as we all know. We've seen a real significant increase in new associations with the OEMs with us because of the program development we've kind of done in conjunction with them.
Lorentz: The lower — or fewer — incentives and the 0 percent financing has really opened up the credit union markets. We are doing record volumes. This year is much better than last year. Oregon Community is an example, but most of our credit unions are generating record loan volumes. And I don't see that stopping for us in the near term. For us, what are we doing? We're trying to create those new pathways of where we think the business is going to be going. And make sure we handle and facilitate the originations today, but also tomorrow the new pathways that are coming.
What's an example of an idea you brought to the dealership?
Black: One of the early challenges we ran into was that different lenders would use different credit bureaus. We were with Equifax at the time and would find [some] competitors just didn't use it. One of the things we brought to the table was, "Let's just look at all of them within reason." That would be one example of just meeting the market where it is and trying to create a competitive advantage out of those little things. Try to do some little nuance every time we get into the dealership.