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…and still sleep at night?

As car sales appear to be heating up in 2012, credit unions face a key service challenge. Car buyers and dealers demand on-the-spot decisions on financing, and most of those decisions need to take place after normal business hours.

Increasingly, stopgap measures aren’t getting the job done. “In early 2009, I instituted Saturday hours for our loan officers, “says Roger Douville, Vice President of Credit/Business Lending at A+ Federal Credit Union in Austin, Texas. “But, because our credit union hours were limited, we were losing out on a lot of indirect auto loan business. In the automotive dealer world, if you’re not handing over a quick loan decision to dealers, you’re pretty much losing the deal.”

Moreover, weekend staff hours weren’t enough. “We would come in on Monday morning after leaving our underwriting desk at 4 p.m. Saturday and would have a tremendous amount of loan volume in our queues to underwrite,” says Douville. “We would have to cut through all that clutter knowing that those deals were probably already delivered by another lender.”

Consumers won’t wait for decisions on their auto loans. But providing the kind of round-the-clock service consumers demand simply isn’t profitable for most credit unions. The answer for A+ FCU – and a growing number of credit unions around the country – is outsourcing. Working with a dedicated call center, credit unions can offer the kind of 24/7 accessibility that consumers want, without putting a 24/7 workforce on the payroll.

That said, turning a critical process like loan decisioning over to an outside firm isn’t without potential angst. A+ FCU began working with CO-OP Member Center to create a process for indirect auto loan underwriting in mid-2011. Though A+ FCU had been using CO-OP Member Center inbound calling to accept after-hours loan applications since 1999, Douville was eager to ensure that the “art” of lending wasn’t lost in the outsourcing process. Working closely with CO-OP Member Center, A+ FCU has created a loan decisioning process that closely resembles its own. The difference? Loan applications are up, but staffing requirements remain steady.

Meritrust Credit Union in Wichita, Kan., has seen similar results since it began using CO-OP Member Center to underwrite indirect auto loans after-hours in April 2008 – and, more recently, to accept members’ direct loan applications by phone as well. “By having an after-hours crew, we are able to get a decision to loan applicants one way or the other,” says Keenan Bender, Meritrust’s Director of Consumer and Indirect Lending. “If they get a conditional approval or a denial from CO-OP Member Center that they don’t agree with, we see it the next day. This provides a level of service that we were not able to offer previously.”

Having CO-OP Member Center as a back-up for direct loan applications is also invaluable. “At 6:01 p.m. our phone rolls over to an 800 number at CO-OP Member Center. They answer the phone ‘Meritrust’ and take an application,” Bender says. “We can also use it whenever we have a need – for instance, if we need to have a meeting, we can call CO-OP Member Center on the spur of the moment and have them manage our queue.”

Read more about credit union growth initiatives available through CO-OP Financial Services here.