Coastal Federal Credit Union Grows Originations Despite Shrinking Footprint

Coastal Federal Credit Union is on track to increase auto loan originations 10% this year, to $600 million, despite reducing its footprint within its home state of North Carolina.

“We’re doing more business but doing it in a smaller area,” David Jacobs, vice president consumer lending at Coastal Federal Credit Union, told Auto Finance News. “We’ve pulled back in some of the territories that we were in.” Coastal Federal Credit Union, which had been operating in four states — Georgia, South Carolina, North Carolina, and Virginia — now operates in 16 North Carolina counties.

By yearend, the Raleigh, N.C.-based credit union expects to originate 26,000 direct and indirect auto loans. On the indirect side, 55% of volume stems from the 16-county footprint. “We feel like the Raleigh, Durham, Cary areas are insulated from some of the bad economic factors that happened in the past,” Jacobs said.

Meanwhile, members have been requesting longer loan terms. “More consumers have higher debt ratios,” he said. “People are cycling back to 2008, 2009 where they were overwhelmed with debt. We are starting to see that more and more. With that, we have more requests for 84-month terms.”

While loan performance has been “good” and the credit union “feels secure about the portfolio,” Jacobs is “keeping an eye on it from month to month,” he said. Currently, 85% of Coastal Federal’s indirect auto loans are made to consumers with 680-or-higher credit scores.