PenFed to Expand Indirect Lending Footprint Into 4 New States

Pentagon Federal Credit Union has set its sight on expanding its indirect lending program into four new states, said Ivan McBride, vice president of automotive lending products and sales.

PenFed plans to debut the program in Texas and Oregon this year, with Washington and Tennessee queued up for 2020. The credit union uses CU Direct Lending’s L360 platform to originate indirect auto loans. “There’s not a lot of heavy lifting,” McBride said. “The CUDL relationship that we have makes it pretty simple to bring new states under the program.”

That said, PenFed is being deliberate in its expansion. “It’s really about identifying those dealers that we want to offer the PenFed program to,” he said, “because we want to have success out of the gate.”

For instance, the credit union is looking to Texas because it already offers direct loans in the state and has a large branch and service center presence, he said. Though PenFed is primarily a direct lender, 92% of indirect customers have been new members to the credit union.

The lender currently operates its indirect platform in 13 states — five on the east coast, plus North and South Carolina, Alabama, Georgia, Nebraska, Florida, California, and Hawaii.