TechSpotlight: CUDL Plans Tech Enhancements, Expansion Efforts to Grow CU Marketshare

Credit Union Direct Lending’s technology has come a long way since its start in 1994, when a dumb terminal, keyboard, and 9600-baud modem connected to a single mainframe would churn out lending recommendations based on credit scores and application data.

These days, CUDL (www.cudl.com) offers an array of products, from customizable auto buying programs and pre-approval solutions to a dealer portal and smartphone apps. Ontario, Calif.-based CUDL has grown to be the largest indirect and point-of-purchase provider for credit unions ― among which it has 1,050 customers ― and it continues to evolve.

Initiatives in the hopper include integration with dealer-management systems (DMS) and access to real-time payoff information. The company also plans to expand into Canada and has recently developed an auto-buying offering with the American Automobile Association, CUDL Executive Vice President Jerry Neemann told Auto Finance News.

“We’ll be launching the only two-way DMS integration solution that’s in the marketplace, so the dealer can start [the lending process] in their host system or they can start it in our system and data can pass back and forth,” he said.

Two components of the system have been built, those that lead from the DMS ― in this case ADP Dealer Services Inc. (www.adpdealerservices.com) and Reynolds and Reynolds (www.reyrey.com) ― to the CUDL system. The piece that facilitates data flow from CUDL back to the DMS is slated for completion this month for ADP and in April for Reynolds and Reynolds, said Neemann, who heads CUDL’s dealer and auto buying solutions operations.

Further down the production pipeline is an enhancement to CUDL AutoSmart ― the site that connects consumers with dealerships that offer credit union financing ― to request real-time loan payoffs. “That’s coming later this year,” Neemann said.

CUDL relies on technology offerings like the DMS interface and the upgraded AutoSmart capabilities to build its lender and dealer networks, ultimately generating higher auto loan volume for credit unions. Credit unions continue to join the network, including Schoolsfirst Federal Credit Union (www.schoolsfirstfcu.org), Community America Credit Union (www.cacu.com), and Police and Fire Federal Credit Union (www.pffcu.org) in recent weeks. Neemann expects another 75 to 100 credit unions to join this year. On the dealer side, 900 dealerships use AutoSmart to showcase 1.2 million new and used cars in their collective inventory, while thousands more have relationships with credit unions for financing.

Those growing numbers are translating to increased marketshare. “Last year was a great year, and this year will be even bigger,” Neemann said.

Over the years, credit unions have averaged a 15% to 17% share of the auto finance market. “Right now we’re running around 18% and change, and it’s growing,” he said. “I think we’ll get up into that low-20% [range]. Our high was 22% to 23%, but that was when [many lenders] jumped out, so there was nowhere else [for consumers] to go [for financing].”

FORGING NEW PARTNERSHIPS
With a growing number of IT solutions, CUDL has started to expand operations.

“Now we’re going into the AAA world to bring credit union financing and our auto buying solution,” Neemann said. “We have three or four clubs that we’re doing business with now. With two of them, AAA members can get credit union financing. That takes our membership count to 50 million.”

The AAA (www.aaa.com) offering, called Member Automotive Premier, includes the self-help aspects of AutoSmart, combined with a concierge-type member service representative to walk the customer through the car-buying process. “Someone’s talking to you, helping you, and answering questions before you go to the dealership,” he said.

A handful of credit unions have already joined the service, including Digital Federal Credit Union (www.dcu.org) and a few Nebraska credit unions. Golden 1 Credit Union (www.golden1.com) is getting set to go live in the coming weeks. “We’re going to be rolling that out over next few years,” he said.

To further its reach, CUDL will launch operations in Canada later this month. “We just opened up CUDL Canada Services Corp. out of Montreal,” Neemann said. “We’re just getting started.”

―Marcie Belles

Published in the March 2013 issue of Auto Finance News TechSpotlight, through the generous support of FIS.