Webinar recap | Outsource to outperform: Real insights from credit union leaders

Auto dealers require rapid approval processes, ideally within minutes rather than hours. They expect prompt responses even outside of regular business hours and desire swift funding for deals. Speed and efficiency are key to making indirect lending a successful venture for credit unions. This sentiment was echoed by lending executives who participated in a recent Origence webinar titled “Outsource to outperform: Real insights from credit union leaders”. When it comes to indirect auto lending, credit unions are leveraging outsourcing solutions to achieve faster turn times and better service. At the same time, they are avoiding stress and alleviating pain points for their internal teams. In a panel discussion, credit union lending managers explained their choice to outsource with Origence Lending Services and shared their experiences on dealer feedback, staff morale, and member satisfaction.

Every credit union is different, but they all encounter a common challenge: aligning staffing and capacity to meet market demands. Car sales fluctuate, leading to days when there is either a shortage or surplus of staff. Factors such as vacations, illnesses, and turnover further complicate coverage, even before considering the need for after-hours underwriting support. In an informal survey, 7 out of 10 credit unions say matching staffing levels to demand is their biggest challenge, while only a combined 14% cited hiring or retention difficulties.

After-hours underwriting is often a deciding factor, pushing credit unions to consider outsourcing options. Nights and weekends present an obvious scheduling challenge. Origence Lending Services’ underwriters approve loans according to your standards, using your guidelines and procedures. They can handle as few or as many loans as you need, including weekends and evenings. Most importantly, they improve auto dealer relationships by approving loans quickly, often in as little as a few minutes.

Right sizing your lending staff for adequate coverage may be the obvious benefit of outsourcing, but it isn’t the only one. Credit unions also consider outsourcing to book loans faster as their staffing fluctuates. In addition, volume spikes, business continuity, disaster recovery, and de-risking expansion are some reasons they are selecting outsourcing. One credit union leader explained that his staff would print out every loan application package, rearrange it into the correct stacking order, and then re-scan the file. Outsourcing the stacking order function relieved them of this tedious, expensive, and time-consuming task, significantly boosting staff morale as well.

From delivering adverse action notices and welcome letters to processing the entire loan, credit unions are choosing the best combination of support as they need it. There are many different approaches to outsourcing your indirect lending operations. Some use a third party to supplement their existing operational capacity, whether after hours, volume surges, or staffing. Other credit unions completely outsource certain components of the loan origination process. Either way, the benefits are clear: faster turn-times, more loans booked, enhanced service delivery experience, and an enhanced brand and reputation.

A quickly growing indirect program outpaced staff capacity at Telcomm CU in Springfield, Missouri. After remotely reviewing 25 dealer submissions in a single “day off”, Chief Lending Officer Chris Glenn was determined to find a better solution. Telcomm now shifts after-hours and overflow lending decisions to Origence Lending Services, allowing them to meet the demand for quick answers that auto dealers have come to expect in their market. Glenn cites a local car dealer who says, “If I don’t have an approval within 30 minutes, you’re not getting the deal.” Conversely, an application that’s more than an hour old probably means it’s his loan if he wants it, either because of a very loyal member or because his competition has already passed. Glenn stated the outsourced processes are seamless and there is no discernible difference between in-house and outsourced underwriting to his dealer network. He is quick to compliment Origence Lending Services on their ability to understand and implement the specifics of his guidelines and procedures.

Initially, the feast or famine cycles of their auto leasing program brought FourLeaf Federal Credit Union in New York to consider outsourcing. According to Christopher Walsh, VP Consumer Lending Product Management, it was very hard to manage staffing for a program that brings you a ton of volume one month, followed by low volume 60 days later. “We were falling behind in our turn times of reviewing deals, and dealers weren’t happy. Outsourcing allowed us to give these overflow deals that we couldn’t handle to Origence Lending Services. Our staff would focus on clearing funding delays so the dealer could get paid.”

Volume fluctuation wasn’t the only opportunity for FourLeaf Federal Credit Union to gain efficiency from outsourcing. Leaving legacy manual processes behind them, the credit union now relies on Origence Lending Services to put documents in the correct order for efficient underwriting, allowing valuable human resources to be directed more efficiently. Origence Lending Services has also provided an important risk management component as the credit union expands into new markets. A new dealer relationship is especially vulnerable to service delivery expectations, and making a bad first impression is the worst way to start. Origence Lending Services gives FourLeaf Federal Credit Union the flexibility to let its most talented people hand-hold new clients and better control reputation risk.

It is a common strategy for credit unions to rely on outsourcing to manage overflow volume beyond their capacity. It is also popular for credit unions to manage efficiency and meet service delivery expectations by shifting back-office functions, such as stacking orders or adverse action notices, to a service provider. In Colorado, Canvas Credit Union’s SVP Consumer Lending Ryan Klassen, has taken a more holistic approach. The credit union keeps all the loan decisioning in-house, including boots-on-the-ground dealer relationship reps who can approve loans in the field. After loan approval, the credit union outsources everything else to Origence Lending Services. From processing to funding to welcome letters, their service provider manages the entire indirect lending back office with appropriate oversight and quality control. When asked if the most important benefit for Canvas Credit Union is the support for dealer relationships, employee morale and retention, or purely cost and efficiency, Klassen says “All of the above.” Origence Lending Services helps Canvas Credit Union nurture dealer relationships, “and focus on other initiatives, the newer, cooler things,” while Origence Lending Services processes the loan and perfects the doc packages. Once assured that everything is signed correctly, the funding is automated, and dealers are paid quickly. Finally, booking the loan into the credit union’s core system occurs through an interface with Origence Lending Services.