Eau Claire, Wis.-based Royal Credit Union is seeing a near 40% growth in its indirect lending portfolio each year, thanks to improvements made to the dealer funding process, said Brandon Riechers, the credit union’s executive vice president and chief lending officer.
The changes — implemented in 2014 — included same-day dealer funding, same-day ACH, and direct access to loan officers to rehash deals in an effort to make the dealer transaction processes “as easy as possible,” he said.
Royal Credit Union’s indirect portfolio grew 38% in 2014, 40% in 2015, and is on track for 39% growth this year, Riechers told Auto Finance News. The lender funds an average $35 to $40 million per month in auto loans, “and almost $20 million of that amount is indirect lending through the dealer,” he added.
Additionally, the lender’s direct portfolio grew by 7% in 2014, 6% in 2015, and is on pace to grow 8% this year, Riechers added. Overall, auto lending for both of Royal’s portfolios has grown in the 15 to 17% range, he said.
In addition to the other changes, Royal implemented an outbound call center where loan officers make calls to consumers and help them take advantage of refinancing options, Riechers said.
Separately, Royal Credit Union entered into a definitive agreement in May to acquire the Apple Valley, Minn.-based office of Deerwood Bank, and to acquire Saint Paul, Minn.-based Capital Bank in April. The Deerwood Bank acquisition is set to close at the end of September, and the Capital Bank acquisition will close at the end of August. The acquisitions will offer Royal the opportunity to enhance its office accessibility to its current Minnesota members and service additional members in the state, Riechers said.
Royal Credit Union makes loans for more than 400 dealers in 24 branch locations throughout Wisconsin and Minnesota.
