The Federal Credit Union September-October 2013 - (Page 36)

Delivering for Dealers Five ways Kern Schools Federal Credit union strengthened ties with local car dealerships — and grew their auto loan portfolio By Scott Westcott were they the default lender for many dealers. Banks and some other lending institutions had grabbed market share and were aggressively courting dealers. F or years, Kern Schools Federal Credit Union dominated the auto-loan market in Bakersfield, Calif. The 165,000-member credit union consistently ranked No. 1 in the metro market for dealer loans while maintaining strong ties with more than 30 local dealerships. Then came the recession, causing the local car market to “crash and burn by more than 40 percent almost overnight,” says Patrick Beck, president of the Greater Bakersfield New Car Dealers Association. At the same time, Kern Schools, like many financial institutions, pulled back, tightening lending guidelines to reflect the new realities of 36 the fast-changing economic landscape. The shifting dynamics challenged the long-standing relationships between Kern Schools and some local dealers. “With dealer lending, it can be out of sight, out of mind,” says Michael George, senior vice president of operations and marketing for Kern Schools. “Through the recession, we had to retreat and couldn’t do the type or volume of loans we had done in the past. We knew we would have to go back out and rebuild some relationships.” Indeed, as the economy improved and vehicles began selling again at a brisk pace, Kern Schools officials found a markedly different competitive landscape. No longer So, over the past two years, Kern Schools has executed a strategy focused on regaining their top-dog standing for local auto loans, with particular emphasis on bolstering their indirect loan program with local auto dealerships. While they concede there is still much work to be done, they have seen positive results. A recent market survey they conducted found that their members view Kern Schools as “synonymous with auto loans,” and the credit union is consistently among the top three local lending institutions for dealer loans. In addition, the share of dealer-generated loan business has increased steadily over the last two years and is now generating 45 percent of total auto loans for the credit union. From 2011 to 2012, the number of loans closed increased by 60 percent. And from 2011 to June 2013, the number of member households with The Federal CrediT Union September–OctOber 2013

Table of Contents for the Digital Edition of The Federal Credit Union September-October 2013

Voices & Opinions
Fromt the Chair
Inside NAFCU
Technology Today
What You Need to Know Now About EMV
core Competency
In Case of Emergency
Delivering for Dealers
Getting to Know...
Management Insight
Compliance Central
Inside NAFCU Services
From the President's Desk

The Federal Credit Union September-October 2013