Bank of America Expects Direct Volume to Match Indirect Within 5 Years
SAN DIEGO — Bank of America‘s direct loan portfolio may catch up with its indirect portfolio as soon as 2022, Duane Freeman, senior vice president of consumer vehicle lending and national sales executive, predicted during a panel discussion at the inaugural Auto Finance Sales & Marketing Summit on Monday.
“We do see a future within the next three to five years that we could originate as much direct as indirect,” Freeman said, noting that the bank has traditionally been a lender in the indirect space.
Bank of America had $41.4 billion of auto loans and leases outstanding last year, according to the Big Wheels Auto Finance Data 2019 report published this week. To achieve that growth, Freeman said the bank will have to focus on giving consumers options and control, and having a dealer base that understands the expectation when a consumer is referred to them.
“Ultimately, in our vision, the direct origination from the dealer is fulfilled via the indirect transaction,” he said.
The bank’s online portal, which launched in 2017, will likely play a pivotal role in that changing portfolio growth. Freeman expects the number of dealers on the portal to hit 5,000 by yearend, compared with about 3,000 currently, he said. The online portal drove more than half of the bank’s direct auto loan applications in February.
