What auto dealers value most in a credit union partner

Hello, and welcome. My name is Jay Carstens, senior vice president of lender solutions here at Origence. Just celebrated my eighteenth year with Origence, and I've been in the indirect space for thirty years now. So it feels like a long time. I'm excited about today's webcast and the guests that are joining our conversation. I think we have a lot of great content to share with our credit union partners today. I'd like to thank you for joining us for today's webinar, what auto dealers value most in a credit union partner. Now it's my Joining us today is Dominic Farmer, who is the general sales manager at Cleveland Ford in Cleveland, Tennessee, where he leads the dealership sales operations, oversees inventory management, directs the sales leadership team, and helps drive customer financing strategies. With a strong background in automotive retail and finance, including previous experience as an f and I manager at Johnson City Toyota, Dominic brings a well rounded perspective on dealership operations and indirect auto lending. Recognized as an industry thought leader, he frequently shares insights on strengthening dealer lender relationships, fostering successful partnerships between dealerships and credit unions, and advancing best practices within the automotive finance industry. Thanks for joining us today, Dominic. As you can see on the screen here, what we're sharing is a little bit of stats in regards to what Cleveland Ford has done, this year from a sales perspective. They're a a strong dealership in that Cleveland market, and they're a very strong partner with Orchestra through CUDL and a very big partner of ORNL Credit Union as well. What I think it's interesting to note, and we'll see this with ORNL as well, these guys are part of the community. Right? Dealerships just like credit unions. They're local businesses, part of the community, engaged with the community, providing valuable resources to their communities, and that's a great synergy that we see between local auto dealerships and our credit union partners. Cleveland Ford is part of a larger group, Hudson Automotive Group, sixty seven stores across seven states. So, again, Dominic, we appreciate you joining us today. You you shared before that you got a full showroom, so thanks for spending time with us today while your team's out there selling cars. Also joining us is Greg Goodman, AVP of indirect lending for ORNL Federal Credit Union with more than eighteen years of experience in automotive finance, including serving as a finance director at Fox Toyota. Greg has built extensive expertise in indirect auto lending, dealership operations, and lending partnerships. During this time, he developed a comprehensive understanding of diverse lending programs while fostering strong relationships with financial institution partners. In twenty twenty two, Greg joined ORNL Federal Credit Union where he's leveraged his industry experience to grow the credit union's indirect lending portfolio, expand their market share, and strengthen strategic partnerships with their dealers. Committed to delivering exceptional service, innovative lending solutions. Greg is focused on creating long term value for both dealership partners and credit union members. Thanks for joining us today, Greg. And as you can see, ORNL is doing a fantastic job from a lending perspective. They're at a ninety six percent loan to share, and do a fantastic business. One of the interesting stats that I think about that, what ORNL is doing when we talk about bringing a credit union and then to talk about the relationships they have with dealers, ORNL has a hundred and eighty live dealers on the CUDL network, and they have funded business with a hundred and seventy seven of them. So if you wanna talk about having relationships, that tells you right there they have relationships with their dealer partners. They don't just have dealers on the platform. They're engaging with them and having active conversations and doing business with them. So congrats on that, Greg. It's very nice to see somebody that's so committed to the business and the and the dealer partners that they do business with. So we're gonna kick this off with a poll. We're gonna start by getting engagement from those of you that are joining us today. What's the single most important factor in becoming a dealer's top lender? So is it competitive rates? Do you have to be the best rate in the market? Is it the fast decision? Do dealers want it in seconds as opposed to hours? Is it fast funding? Is it important for the dealer to get that money instantaneously so they go out and replenish their inventory and sell more cars? Is it just that they want a consistent underwriting partner, or is it that they wanna have a strong relationship all across the line with the lender that they're doing business with? So we're getting a lot of answers coming through here. Greg. Once we close this out, I'm gonna go to you and ask you to follow-up in regards to this first survey. So, Kathleen, if we can close that out. I think we've had some time in here. Strong relationships led the board followed by fast decisions and fast funding. So did that pass the sniff test for you, Greg? Or excuse me. Yeah. Absolutely. Absolutely. It did. And first of all, let me say thanks for having us today. It's it's an honor to be able to come on here and speak to hopefully help to continue to improve what we all do all across the country. So but, yes, the strong relationships, and I I don't think it's any coincidence that the fast decisions and fast funding coincide with that. And and they you know, your poll, interestingly enough, they're both at twenty one percent, same amount of responses on those. And then the the, strong dealer relations, I think, is a byproduct of the fast decisions and the fast funding. Perfect. Dominic, how about you? You're obviously the one that lives through this. What what is the key to the relationship as far as you're concerned to be a top lender partner for your dealership? Yeah. You know, it's, being able to have that person that you know that you can pick up the phone that you can actually get someone instead of just a voice mail. Right? And, being able to have, you know, well rounded, decision timing and funding and, you know, fair enough rates. So it doesn't have to be the best, but, you know, all of that ties into creating a good enough relationship to where, when a customer says, you know, hey. You can you can pull my credit, but I'm only gonna let you take check two places, right, to know kind of where I'm going with that paper before it's even ever submitted. And all of that ties back into the relationship side of it. Yeah, Dominic. And when we when we had our pre call, one of the things that you said was was important, I'd like you to dig a little bit more into it from a relationship perspective is looking for a lender partner that's looking for a path forward as opposed to just just an answer. Right? It's it's you said, I'm really looking for somebody that wants to give me a yes. It may not be the way I asked for it, but at least give me a way forward so I can sell a car and get a consumer or a member into that car. For sure. And, you know, that would be, you know, one pain point, and I I know that we're gonna touch this a a little bit later on, is when someone says no to a customer. Well, alright. Give me the why. Right? Is it over advanced? Do do you not like the customer's high credit? Is there you know, have they are they jumping up too much from unit to unit? And a lot of places, when they go to decision alone, there's just a flat out decline, and then you can't get on the phone with somebody to say, well, what are you looking for out of this customer in order to make it happen? You know, one thing that ORNL and and many of our dealer partners do a phenomenal job with is if we submit somebody over it, it might not be a loan that you're looking to book. It might be sixty two, sixty three thousand dollars on a vehicle and, you know, getting a condition that says, hey, forty two grand. To me, a lot of places will look at that as a, you know, kind of a left handed turndown would be the industry terminology. But how I look at that is saying, hey. We're not out on the customer. We're out on this loan. And I can't tell you how many times I've gotten that feedback and turned around, had the conversation with the customer, changed units, got money down, got the cosigner, and, you know, there was there was a path forward, but it's significantly, significantly more appreciated than just a no. Perfect. And, Greg, you've sat in that seat. Right? You you spent time in the dealership, so you you've lived both sides of this. And it sounds like you heard, Cleveland Ford as well as other dealers in regards to the importance of getting to a yes, getting to some kind of a way forward. What have you done with your team from an underwriting perspective to make sure that you guys are communicating effectively and trying to find that path? Yeah. Well, the first thing, that's the most valuable part of what you just said is communicating. And and there's nothing effective if you don't first communicate. I mean, you have to at least start that conversation. We use the term a lot around here, and I'm sure that's it's not only here, but let's give them a way to go. That that that's a general term in the in the industry. Right? Let's give them a way to go. And Dominic said it best, we're not out on the customer, but we just might be out on on this particular structure. So from an underwriting standpoint, one of the things that we've tried to really do really well at is the communication piece. Now we have six underwriters. And as you mentioned, we have a little over a hundred and eighty dealers that we will fund pretty much about ninety nine percent of those dealers, at least one deal this month. So we've got a lot of applications coming through, obviously. But we wanna make sure that, you know, even if it's just in the note or in a chat that that CUDL does such a great job of getting us giving us access to and a platform to communicate that we want to tell this dealer, this is where we are on our decision. This is where we feel like that that a different structure would take us in a different direction. So just making sure that we're we're very clear, but that we are giving them a way to go on a deal. One thing I will say, when it comes to phone calls, and I and I I I tell my underwriters this all the time, everything good happens on the other side of hello. So if we will just initiate a conversation, everything good will happen on the other side of that hello. And, Greg, what did that journey look like? Right? Is this is that was it was that something that your team already had that skill set? Was that a trained skill set? Was that a I have to migrate my team towards that skill set through attrition? What did that look like? Yeah. We when so we did not do a very good job at one time when I was on the dealer side. ORNL did not do a very good job with the communication piece. In fact, you know, I spent a lot of years on the dealership side. And, when I made the decision that I wanted to, switch over, one of the factors that I considered was who's doing stuff really well. Now you would think that maybe I would pick that lender and and move in that direction, but, actually, I did the exact ops. I looked at ORNL, and I said, you know, they they've got every tool that they need at their disposal to be able to do to do big things in this industry. They're just missing a couple very key basic things in communication no matter what industry you're in. That that is so key. So when you when you look at where we were, one of the very first things that we wanted to do was to make sure that our people understood that. You mentioned the attrition. I realized early on that communication wasn't for everybody. Some you you first of all, you have to as a as a lender and an underwriter, you have to know not only your program, but you have to know the other programs in the market. And if you do, what that does is it builds confidence, and you're not you're not fearful of having those conversations. One of the reasons underwriters across the board do not pick up the phone when a dealer calls because they are intimidated of where that conversation is gonna go and what that dealer may try to talk them into doing, and we don't know what other lenders do. So if they say, you know, your your competitor did this, can you match it? They don't they don't know where to go with that. So, you know, having that confidence and, and having the people in place that have the personality or the skill set to have those those conversations is very, very key. And we didn't have all of those people. We that's not to say they weren't a great employee somewhere else doing something else, and we certainly moved some pieces around. But we wanted to make sure that we had all of the right people in all of the right seats. Fantastic. We're gonna move into three polling questions. So we're gonna move through these relatively quick. So everyone get ready to get your responses in. We're gonna kinda talk about speed communication and consistency, and then we're gonna see how this fits within Dominic's world. So the first one is is is the what is the top dealer concern? And so this is for all of our credit union partners out there. Again, is it slow funding? Is it slow decision time? Is it excessive stipulations? Is it inconsistent decisioning? Is it communication gaps? We just heard Greg talk about the importance of that. Or is it from a technology and process issue, that you're having troubles with your dealerships? Coming in fast and furious. It looks like right now excessive stipulations is leading the pack, in regards to what the dealers are saying to our credit union partners followed by communication gaps. So, Kathleen, sharing that out to the audience. Let's jump into the next one, decision times. What is the expectation as a credit union that you feel like is needed from your dealer partners? Do they want decisions in less than ten minutes? Do they want decisions in ten to thirty minutes? Do they want decisions in thirty six to sixty minutes or a sixty plus gonna work? And I think what we should all be balancing on our own minds is, is this what we're delivering? If we know what the dealer's expectation is, are we delivering on this expectation? Overwhelmingly, we know as a credit union group, it looks like seventy two percent say that dealers want their decisions in under ten minutes. I have a feeling that Dominic's gonna definitely agree with that. And then let's go into our, third polling question, and that's funding expectations. So similar to the underwriting component, what are we looking for there? Do dealers want their money same day, next day, two days, three plus days? And, again, as as our credit union partners, are we delivering on what we feel like our dealer expectations are? So we're seeing that as a collective group, that over half of us feel like same day as the expectation followed by next business day. Dominic, let's go to you. Let's unpack each one of these. From from from your seat, where is the friction from the biggest opportunity? Where do you see the biggest opportunity in working with credit unions? Is it around funding? Is it around decision time or stipulations or a consistency or communication? Can we talk a little bit about it that in the opening? But where do you see? They that from a credit union perspective, they maybe feel that these are complaints. From your perspective, this just may be an opportunity. Yeah. Know, I would say decision time is a huge one. You know, talking about the headspace of a customer by the time they have gotten to the dealership, they've test driven, they've, you know, jumped to three, four, five different cars. They come in, they get their trade in appraised, everything gets negotiated, you know, that they're hesitant to maybe give you credit up front. That customer's been through forty five minutes to an hour and a half. And when they're at a spot where they're ready to say yes, that clock is like going into a restaurant and sitting down, and the host is saying, hey. Your server's gonna be right out. Right? And if a server takes ten minutes to come out with your water, it feels like an hour. Right? So, you know, I would say decision time is a I I can't express enough about how important that is because by the time that customer sits down and says yes and and you get to shaking hands, it's a pretty fast process from there to get them into, you know, into the finance office working. I noticed that a lot of people put up excessive stipulations as as a pain point. While I would say it's a it's not complaint from the dealership, if I do have equal approvals and one's asking me to provide a b c stip and then another one doesn't, If that customer doesn't have that stip in their email or in a portal that they can access pretty quick, you know, we would be moving forward with the the loan that didn't have whatever stipulation. I would assume I would assume, Dominic, the most common one for that is proof of proof of income. Right? So do you do you feel like, as an industry, credit unions are more apt to ask for proof of income than your other lenders? Credit unions are certainly dramatically more likely to ask for proof of income, but that's where most of your national lenders, are gonna have, systems that they pay for that whatever you submit, it's gonna line up fairly in line. And, typically, it's only asked if they're verifying something on their side that doesn't that doesn't math. And is that because you don't wanna have to get it, or you don't wanna have to bother the customer asking for it if you have three other answers that say it's not required? Yeah. So that's more of a when the customer's in front of you and they're live and, they want the car that you're selling and and it's really easy to ask for it right then, It's really hard when that customer gets excited and they leave the dealership and they're not, you know, necessarily on this emotional high where they're super excited for their new car and they go home and then they're showing their family the car or they forget about it or they're out to dinner and it's reopening that communication down the road where I can't tell you the dozens of times that a consumer said, I'll send that registration copy to you as soon as I get home. And it's five days of being hemmed up and then you're telling your salesperson that, you know, their deal's gonna roll or they're not gonna get paid or it didn't it's not gonna fit in. And so, you know, having that be simple going into the finance office, coming out of the finance office, It it's certainly important. So you kinda touched on the the the the complaint or the opportunity as well as decision time. How about funding? Where do you guys sit in in regards to funding? Obviously, everyone wants to have their money the same day if possible. Sometimes that's a realistic expectation, and other times, it isn't. But as a hot button for the dealership, where does that fit in regards to priority for you guys? Yeah. Probably not as high as you would think. And, you know, I might have a an unconventional thought to this. But if it's a if it's a clean package and it goes in next business day, your two day turnaround is perfectly fine by me. Now if there's any kind of stipulation associated with it, I think those should be prioritized to be same day immediate reviews. That if there's something that we have to have a tough conversation about underwriting on or or go through that, that we're able to hit a customer same day and say, hey. This is what we need to get changed instead of after they've, you know, had the car for a weekend or or something like that. It makes sense. I mean, when when you talked about the underwriting time and the importance of trying to get the information while the client's there when they've left and now you're having to follow-up with them, it becomes a little bit more problem And, CSI is always something you guys are working on. Right? This is you're wanting to make sure that you have a good customer experience, that's extremely important on the new car side for you guys. And so sometimes when stipulations slow that process down, it might it might, cause an impact in regards to how they rate the store from a service perspective of making that purchase. Greg, how about on your side? How are you guys seeing this? Is this that from a stipulation perspective, you know, Dominic talked about the fact that credit unions have a tendency to be a little bit more, dependent upon proof of income requirements. Where do you guys stand in regards to income? Where are you is that based on credit scores? Is that based on credit quality? And how's that work? And how do you guys view stipulations with your dealer partners? So, that's a great question. And one of the things that we try to do in in a lot of different areas of of our underwriting is leverage technology and the resources that we have through, you know, great partners that will allow us the opportunity to have systems in place that will look at an income and, know that that income is what you should expect to see. So we have a lot of deals that we don't stip for income, and it's not because we have a human that looks at it and decides that that should or should not be stiff, but because we have a, a technology in place that if you say you work at the post office in this town, and you've been there for ten years and you are a, a mail carrier, this system knows what that position pays for this market. So it's it's gives an availability to go, yep. There's no problem there. We can move on. Now, obviously, if if that same deal looks like that maybe a dealer may have inflated to try to account for DTI or PTI issues, that same system will also do the exact opposite. It'll say, you know, well, we probably need to, to look at that. But but what we do realize is that we want to be able to, look at these deals and and make not only the buying underwriting decision as convenient as possible, but also know that on the back end of that, if we give them a decision, but we don't get it funded in a timely manner, that it it will affect our next decision as well. Perfect. Thank you. And how about funding expectations? Where are you guys sitting from that perspective? So what we've got is, we we try to do a twenty four hour turnaround, with funding. Now early in the week is gonna be, it's gonna give a little more time than later in the week because you've slowed down throughout the week. You've got a lot of Saturday business on Monday and Tuesday. But we, that that was one of the very first things that we focused on when we really started to try to take steps forward in in our relationships with the dealers. We had the discussion multiple times that we're not gonna increase our volume because we buy deeper or because we give bigger LTVs or we give lower rates or longer terms. We're gonna increase our volume if we get the dealer their money faster. And it's not because the dealer has, you know, an account that they've got to satisfy for payroll or anything of those. They but it it's because when as a finance manager, every deal that you sign up, it's like having a newborn baby until it gets funded. You have to monitor that baby every hour of the day until you see that funding status come across. And if it takes a lender three days, then, you know, you're gonna have three days worth of deals that are sitting there for funding. And the but the sooner they can get those, deals cleaned out, they they know they can move on for the next deal, in in their repertoire. Fantastic. Thank you. And I think, Greg, you had you guys have a very high auto decision rate on our platform. Can you help with the how you've gotten to that point? Is that technology? Is that partnership? How are you guys getting to the point where you're able to get quick decisions back to to dominate from an automated perspective, which obviously then helps from a manual perspective. You have less that you have to work through, which allows you to get those decisions back quickly too. Yeah. We so we've always, with with our credit union, even when I was on the dealer side several years ago, we've always had a, a higher than normal, auto decisioning program. The last few years, we've really dialed that in because we've realized that, you know, with the tech the technology that's out here today, there there's really no reason that lenders should not be investing in that because investing in that technology, in that auto decisioning and I think we all believe in AI at this point. Right? Something that we didn't know anything about ten years ago. But with all of those opportunities, I think it just sends a message to our all of our dealer partners that, you know, we are invested in that not for our benefit alone, but for the benefit of our dealer partners so that we could give them fast decisions. And, honestly, for the benefit of our members because, you know, there are things that our partners will they will take into account, you know, a whole lot more of the overall deal as opposed to just saying, okay. Let me look at credit score, the debt ratios, and the term to see if this is a deal or not. That's that doesn't make a deal a deal. There's so many more things that make it a deal. All of those things I just mentioned just, you know, specify how the deal needs to be structured. So, yeah, the technology from, from from from our partners that that look at these deals right now, we currently have about fifty four percent of our deals that are auto decision. So we talked earlier about fast turnaround with speed how quickly we can get decisions to dealers. Well, when I've got five to six out of ten that a system is making a very intelligent decision on, then what that does is it frees up my underwriters to, you know, to be able to reach out and make those phone calls and and and, get those deals back even faster. Awesome. I'm gonna save most questions for the end, but there's a lot of people who are asking, Greg, and and we're fine with you sharing partner information on the call as long as you're comfortable with it. But they're wanting to know who you're using to help you with the automated decision from a tech stack perspective as well as who it is that you're using for the, income validation to, reduce the amount of POI stipulations. Yeah. So, we we use Zest AI for our our decisioning platform. That's not exclusive, and we don't use that one hundred percent of the time on every deal. But the we do have that partnership out there. And then we we've also got a near prime program that we that we use as well. So our our underwriters, they are making some manual decisions. But for the most part, I think they've got you know, especially with with the CUDL partnership that we have, the Origence partnership, that that gives us a lot of, things that we can look at in a very small circle, without, you know, really flipping a whole lot of pages and looking at a lot of different areas. It gives us a real, clean snapshot of what we're looking at. K. And are you comfortable sharing POI? Well, POI the POI piece of that, is, through the Zest system still. So we're not necessarily partnered now. Obviously, Zest has partners as well, but, you know, we just filter through that. Okay. Perfect. Thank you. Let's go to one more polling question here real quick. Kathleen, if we can, how often does your organization meet with its top dealers face to face? Again, so our credit union partners that are out there listening today is this is the is the expectation that your team is talking with your, dealer partners on a weekly basis, monthly basis, quarterly basis, and this is face to face actually being in their dealership. Obviously, as Greg talked about, there's communication through the CUDL platform, communication through phone calls. Are you out there semiannually, or is it rarely or never? And sometimes that is the case in smaller credit unions that they are trying to do it all through the phone, because they don't have the manpower to be out there in person. So looks like we're getting a lot of feedback here. Looks like the leader at this point in time is monthly followed by quarterly, and then we got a little mix of weekly, semiannual, and rarely, within there. And so, we can close that out and share that, Kathleen. Dominic, help us with, when our credit unions are looking to partner with a dealership, what is what do you find value in from that in person call as well as if it's over the phone? I think it's really important for our credit unions to see it from a dealer's perspective. Where is the value in the in person relationship visit, and and where is the value of if they're only able to pick up the phone and call? Yeah. You know, I would say that if you stop by a dealership just to say hi or just to bring doughnuts for a day and that there's not any actual content that's being brought to the store, then, you know, it's not that the visits aren't appreciated or anything like that, but there's nothing that either party would get to, you know, leverage or advance to put put both of us in a situation where we would be moving forward. So what I would say is I'd love a little bit of information for some KPIs for how we look on your scorecard and how the loans are performing. Obviously, if there's loans that aren't performing, then that's phenomenal information that can be given to a dealer that they might know to check for any red flags or any, you know, behavior that would need corrected. If the dealership's performing great, then that's that's good to know, you know, ultimately, that the the paper's successful. And, that's one thing that that I think is really important to make sure that the dealer is getting what the credit union wants and that the, credit union is getting what the dealer wants. You know, I had a visit with a loan rep that basically said, hey. You know, I'm happy with the amount of business that you're giving me. You're just killing me in Look to Book. So I'm I'm happy if you just submit elsewhere and choose me last. You know, not exactly how I would ever look at it. You know, I would want all the all the people in front of me and and be in front of everybody. But if that conversation's never had or if it's not a part of a visit, then, well, I'm just the other guy on the end of the screen that might be killing you on your report that you you never actually got to talk to. Yeah. And and that could just be a missed opportunity from the lender's part too. Right? Now, gonna guess, is just that, again, the the lender should know what their sweet spot is and what you should be sending them. And so if they can help identify for you so you can share with your team, we don't need to sell this pro send this profile to this credit union or this lender because that's just never gonna fit. Right? It's just that they're they're not a ninety six month. They're not a whatever the case may be is. They're not a six forty credit score buyer. You know? And so I think that to your point, bringing value to the conversation, somebody that sits in your seat probably has an interest in regards to what the portfolio looks like and things of that nature. Maybe the individual f and I person doesn't necessarily have as much interest in that. Be great if your dealership does, but they're probably more interested in where's the niche? Where can you help me? Where how do I get ahold of you? How do I get to that yes? Right? It's just creating that relationship and that bond and and and finding a way to build on build on that relationship. Greg Greg, how do you see this? When when you're sending your team out into dealerships, what is that cadence? What is the cadence that ORNL has for in person? What is the expectation of your team when they're going into the dealership? And and and then what's the variance if you're doing it over the phone? Well, historically, for, in in dealership visits, we've, we've got more dealers right now than we've ever had. So, you know, we're we're adjusting some of that right now. But, historically, we've tried to be in a dealership, you know, once every thirty to forty five days. One of the things that I don't want to happen is, you know, to to have a rep in the field that when they pull into a dealership and dealerships see that vehicle coming in, that they have to run to the service department till the guy leaves. And so that that that can happen very easily. So so having a a rep that understands, as as Kenny Rogers would have said, know when to hold them and know when to fold them. You walk into a dealership, you can tell if if they have time to be dealing with you. And if they don't, just just move on. But I but I'll you know, with what Dominic said there, you know, with the in in dealership visits, you know, I wanna make sure that we're going in there with positive reinforcement that you know? I mean, hey. You know, donuts are great, but I I think we can all get our own donuts if you'll give me a a path to understand your program and to make sure that we're we're sending the right kind of business. We don't have a line on look to book, but, certainly, you know, we don't wanna be way out of range on that at at the same time because what it does is it just slows down our people from being able to look at deals for everybody. So, yeah, to answer the question, though, we we want somebody in that dealership as often as we feel like the dealership values that. And so for every dealership, that may be different. And I tell my rep that if if you're in a dealership and and you know that they really appreciate seeing you once a month, go in there once a month. But if it's a dealership that you can tell that a quarterly visit is about all they they want, just make a note of that and go there quarterly. So no nothing set in stone for that. Just try to try to abide by what the dealership would appreciate. And I would follow on that. We value different reps very, very differently based on how supportive they are, to the dealer. And that doesn't just mean in how much they buy. Right? But in, you know, how we can overcome problems together, you know, how we can, you know, make sure that we collaborate in in a way to to put something together and bridge a gap. And if there's a bank that the rep can't ever help with a funding situation or doesn't have authority to to help with the underwriting situation, or can't really give feedback, then then that's a rep that really don't need to see more than once every six months. So if there's if there's not something that can be productive towards the relationship and can help contribute to selling or servicing cars, then there's, you know, not the need for it to be monthly at all. Dominic, and dealer turnover is obviously different based on the dealership and the culture at the dealership. Some dealerships have a lot of turnover in their f and I departments. Other people other other dealerships or groups have f and I people that stay there for a long time because that's just the way the culture is. Where do you see that that value from what a lender does with their field team in helping you get a a new person in that seat up to speed? Is is that something that you have an expectation that your lenders are helping with, or is that something that you do in house in regards to getting your new f and I people? Now when I say new, it doesn't mean that they've never done it before, but new to your dealership and new to that seat. So I would say anybody that's brand new to the store, I'm pretty dialed in with talking to them about programs and and and where they can have some opportunity, and and I handle that really well. Now if something changes on a program, that's where I expect a rep to be hyper communicative and stop by the dealer and, you know, talk to the guys. You know, anytime there's a a program change, it needs to be, you know, advocated. So really a good question for our lender partners, though, to be asking our dealerships. Right? This is the who's responsible for this? So so they make sure that they're not just developing relationships with the individual f and I folks, but they're d you know, some people would go, oh, boy, GSM, Dominic. I don't need to talk to him. He's responsible for selling cars. Right? Yeah. But I happen to also oversee the finance department. Right? And so it's I think it's really important for our lenders to understand kind of how each dealership is structured to make sure that we're creating the relationships with all of the people who are important to the relationship. And that's just not finance. Right? We should have relationships with the GSMs and the GMs and the dealer principals and the Internet department, right, as spread that relationship throughout because, then everyone in the dealership is thinking about my organization as a lender and the value it brings to that dealership. For sure. And I would say, know, not all dealerships are made equal. Most of the time, a finance office is something where somebody gets promoted to and then kinda thrown in with a keyboard and a and a mouse and told kinda figure it out. Right? So those conversations definitely you know, they they hold merit and are are appreciated. Perfect. I think this works well into the the next section that we're gonna go to, and that's managing through challenges. So, Dominic, tell us about a time where a lending partner made a mistake, but it actually strengthened the relationship between you and that lender. Yeah. There's a lot. One relatively recent was lender has a program that, you know, buys a hundred and thirty five percent, and the analyst at the other side for the lender accidentally approved a loan that was a hundred and fifty three percent. Finance manager was moving fast on a Saturday and, you know, took care of the customer and got the customer to now. We found out that it was a problem in funding because naturally, it's a hundred and seventy percent, and that's not gonna work. Right? And the we took a pretty big cut to make the front end of the deal work. The customer was in a a heavy negative equity situation, which we're seeing more and more of in the market. Well, the the lender actually stepped up, they owned the the front end portion of it and and carried that. And then, basically, you know, we had a conversation with the customer and and amended the the back portion of it and got it taken care of. But, with the decision that we made to sell a customer a car and shake their hand was, on an approval that doesn't meet the program. The lender didn't have to honor, but they honored the, front end of that approval, and, we kinda both agreed that both of our guys had some fault there. You know, the finance manager not for for not slowing down and and looking at the situation as a whole. And then the, obviously, the underwriter that approved the overage on the front in the first place. I'm I'm guessing when a lender does something like that for you, you obviously, you recognize it because you're talking about it today. Yeah. Does that help them get more business moving forward, or does that hurt them from getting more business forward? Because, gosh, I can't count on whether or not their approvals are good, or I know that they're gonna work with this if there's a mistake. You know, I think that's where you have to look at it through a lens of, you know, well, hey. What's fair? Right? You know, if a if a lender makes a mistake and a and a dealership runs with it and, you know, the dealership's the only person that gains from business being done, then there's it's not equitable. It doesn't help. You know? The the lender could have absolutely told me we're conditioning this back to the max front end that our program works with. You figure it out. Right? When that kind of stuff happens, if there's two equal approvals, then I'll go to the person that I know that we can talk through some issues. And, you know, just recently, there was a loan that had gotten approved that there was, you know, a couple hiccups in funding. And the the answer from the from the lender partner was no, but it made sense. Right? There was things about that customer situation that had changed since the approval originally happened, and, you know, it doesn't have to be, you know, lay down, take care of the dealer, take care of the dealer, take care of the dealer. It's much, much more about collaborating together and figuring out something that's good for both parties. That's refreshing. Greg, on your side, how do you guys handle difficult conversations with high producing dealers? Again, is that something that that's expected from from your field team? Is that expected from your underwriting team? Is that or does that go to leadership to have those types of conversations? Yeah. So if if we're talking about something that gets outside of guideline, it definitely needs to go to leadership because we've got some internal, processes that we wanna put in place, not just for this particular deal, but so that we can kinda track, habits, of our our people internally just to make sure that we're coaching the right way, that kind of thing. To Dominic's point, you know, we obviously, the the volume that we look at and the volume that we book, we're we're we're gonna miss a few things here and there. And we we may even miss something, when it comes to guidelines. You know, talked about technology earlier. That's again, that's a beautiful thing about technology is it will help you. It will build the guardrails on both sides of you, and, really, all you've gotta do is just make sure you're driving the car straight at that point. So, yeah, the the technology there helps a lot. But if if there is a deal that that you know, let's say, for example, Dominic's team makes a an error on and my people didn't catch it, we're we're gonna try to make sure that we honor what we said, not just for the dealership, but also for that member because, you know, we understand that that it it's affecting more than just the, the dealer and the lender. It's also affecting the member. So we do try to honor that as much as possible. And there are times that in fact, I just I just had this happen recently with a with a dealership locally that we've we've done a lot of we we've tried to build that relationship, and and there's been a few things here and there that we would bend on. And we had one situation that my underwriter made a mistake on, and we we we picked up the phone and called the the dealer and said, hey. You know, we may we made a mistake here. Can you give us some grace? And the answer was just simply no. And so, you know, you you have to you have to be reminded of those things. But for the most part, I think that dealers understand what it takes for us and them to be successful. And that means that we both give a little for the relationship, and it may not be giving in a way that benefits us the most, but it benefits the relationship the most. And that's what a partnership is. Right? Absolutely. Partnership isn't one way. A partnership is two ways. And I think that what you guys both just outlined is is is partners. Right? And so sometimes you will have partners in business, and sometimes you're gonna have people who are transactional in business. Right? And so I think it's important for the lender to be able to differentiate what their dealers is this is truly a partner. Right? Because this is somebody that we're looking out for each other's best interest. And just just to just to to add one more thing in here real quickly. I I I can recall a deal, a few months ago that we made a mistake on. I mean, we just simply made a mistake, and we caught it in funding. And when we called it, the first thing that I said was what dealer is this? Well, it just happened to be Dominic's store. And I asked my rep who has a great relationship with Dominic, hey. Call Dominic and see if he could help us out because, you know, we we we try to help when we can. And he was very quick to say, absolutely. And and I don't know how much that cost him. I don't know what the heartache there was, but I know this that it made us want to make sure that we are reaching as as far to the center for him as we could in all future deals. So, yeah, it absolutely goes both ways. Perfect. And I would say that if, if I have a transactional relationship with a bank, I'm gonna continue to have a transactional relationship with a bank. But when whenever there's some some help that's given, whenever there's, you know, an approval that's a stretch call and and and and and there's and there's everybody working towards the same purpose, which is to help as many consumers as we have, help as many members as we have. Once that is a partnership relationship, there's it's reciprocated immediately. This kinda rolls into the next one is that, LTVs, and and and pressures that lenders are seeing from an LTV perspective. And and, Dominic, you live and breathe this every single day. Right? And so you had already mentioned a negative equity deal. Right? That's something that's very prevalent within the market right now. But we're also seeing that premiums, for aftermarket products are going up as well. Right? I mean, I know that my homeowner's insurance seems to go up every year, some years more than others. My car insurance seems like it has certainly gone up. Cost of repairs are getting worse and worse. So when you're looking at your lender partners, how do you look at loan to value front end advance versus back end advance? What are you looking for with your lender partners that maybe look at back end advance in a different way? And and and what is the reality of these? Are you guys just greedy and trying to make a bunch of money on your back end products, or is it truly that the price is just going up so much that that's why lenders are seeing it reflected in the the deal structure? Yeah. The prices are skyrocketing. And even just in the last two years, many aftermarket, you know, warranties, etcetera, etcetera, upwards of eighty percent to a hundred percent higher costs. You know, I first got into the finance, office around twenty seventeen, and a simple warranty was regularly between a four and an eight hundred dollar cost that the dealer would have to cover before they would start to make any kind of profit. And that same kind of warranty coverage with the rising amount of electronics in cars and and how much inflation has happened in the auto market, you know, it's it's not uncommon for it to have between a twenty eight hundred or a fifty five hundred dollar cost, especially on your larger ticket items, you know, expeditions, sequoias, any anything that's that oversized vehicle, man. They're they're expensive to work on. They are. And and just driving them off the lot, we have a fleet with our with our company, and people will drive an economy car off the lot, right, and get in an accident. And it it's like, oh, so fender bender, and it's totaled. You know, just because there's so much technology involved in them. And so what it used to take to total a car versus what it takes to total a car today is just different. So And it's a pinpoint of a customer where, you know, industry standard for the longest time, remember, forty percent warranty penetration was pretty consistent. It's it's much, much more like seventy five to eighty percent warranty penetration. And it used to be the subject that you touch on with a consumer, and they and I don't wanna hear it. Don't wanna hear it. Whereas now before we even pull someone's credit or go to the you know, talk about the numbers on a transaction, there's well, what warranty comes with this? What can I get with this? And it's it's a lot more it's a huge pain point for our customers. And, Dominic, do you feel that's because buyers are becoming more educated before they come into the dealership now? They're using all the tools that there are on the Internet. They're asking AI questions, things of that nature. And so that they know the importance, and they're just really wanting to determine what it is that you're offering and what that price point is just because they do that research. I think they're looking at the the data of what, you know, market research says, and the the reality is that cars are going to be more expensive tomorrow than they are today, and cars are going to have more technology in it tomorrow than they do today. And the the more things that a vehicle has, the, you know, the more likely there are issues. And in today's cars, when there is issues, it's a lot more expensive, astronomically more expensive. Exactly. Greg, how do you guys handle these issues? LTV being really a key one, negative equity being part of the front end advance generally, but how are you guys handling these higher premiums and bigger LTV asks? Well, that's, that that's something that we're actually putting some review effort into right now with internally is because we we we're starting to see, a little bit of that wave come through of, you know, what values we're doing just a few years ago because of market conditions. And so now we're starting to see some of those trade ins come come across. And so with our hundred and thirty five percent is what we offer on the front for an a plus credit customer, You know, a hundred and thirty five percent is completely different on a twenty thousand dollar car versus a hundred thousand dollar car. And so while we're talking about inflation and we're talking about, you know, pricing and and how things have changed, you know, that that's one of the things that I I can tell you just over the last, five years. Our our average book loan was twenty eight thousand dollars not too long ago. It's a little over thirty five thousand dollars now. Okay? So the difference in the hundred and thirty five percent carry on that amount versus a a much higher amount makes a big difference with the dollar amount. And I know some of the some of some of the lenders out in the market, they have put a cap on how much over regardless of what the percentage says, how much over they're gonna do. That's not a bad idea. And and I I actually think that we all should probably visit, you know, the thought of that. But, certainly, it's it's becoming, you know, a factor. Now when you talked about the back end and and we talked about, you know, the products and how, you know, they're increasing in in in price. One of the things that that I feel like it we've got to talk about soon in in in the in the industry, is what products are being offered, and I and I'll tell you what I mean by that. I just experienced a product, that I'd never heard of. It it was brand new, and I I feel like I've been in this business for a long time. And when I called the dealer and asked the question to what is this product? It was a product that protected the member, the customer, if their credit got hacked. I have a hard time understanding how that is part of a finance contract for a vehicle as collateral. It it does nothing for my collateral. Okay? That is something that, you know, five, ten years ago, you would have purchased, you know, through a company that you see an infomercial on. How does that become part of a car deal? So I say that not to say that we should, you know, we should police what products dealers are selling. But I will say that if we want to continue to be able to maintain that rise in pricing that is going to happen, let let let's make sure we're sticking to the products that matter. And I'm not I'm not gonna be the one to decide what value for a member is for a customer. But, you know, I I think we do have to have that conversation at some point so that we can, we we we can account for the the increase of cost. Thank you. Great answer, Craig. We are up against it. We got five minutes left. We do have questions from the audience. We I wish this was an hour and a half or two hours of conversations. Been great, and I think there's more topics that we certainly could have covered. Just a quick answer, Dominic, before we get into questions. Econtracting, how important it is to your group? Sixty seven stores. Is econtracting important to your dealership as part of the process? It's a requirement to be employed. Okay. Thank you. And we do have a solution now, an econtracting solution. So, hopefully, we can help participate with those dealers. Smart fund works great, but the process of at the dealership is econtracting, we now have the ability to do that. So let's run through these questions real quick in the next four minutes. Greg, I think this one's for you. Do you turn off dealers that aren't funding loans with you? No. We do not turn off those dealers, but we do have conversations with them. And sometimes those conversations are hard conversations, but we we really give them every opportunity to try to understand our platform so that we can, you know, service them. K. I'm thinking this one's for Greg. Does your team prefer to, I'm get I'm sorry. I'm guessing this is Dominic. Does your team prefer to see applications come through as approved rather than referred? I think the question would be approved rather than countered. Conceivably. Yep. But, you know, whether it's a condition call or whether it's an approval, I think we get we know how to look at both of those. I I don't have a don't decision. Right? This is a bit if if the question is, do I want a decision as opposed to it sitting? Yes. Would I prefer a referral over a counteroffer? Absolutely. So it'd probably be in that order. Right? Approval counteroffer referral decline. Referral, at least there's still a chance. Okay. Thank you. Greg, do your dealer reps have joint dealer visits with CUDL? Yes. We do. We in fact, we, we appreciate when we have the opportunity to do that, because not only do we have the advantage of, you know, CUDL and and talking about some of the things that, that they offer in conjunction with us, but also that CUDL rep gets to hear, more about our program, and and that causes them to talk about our program when we're not in the room. And I can tell you that our my rep really enjoys his visits with our CUDL rep. Fantastic. That's great to hear. Thank you. Another one, Greg, for you. With the use of AI in underwriting, has this brought about challenges for decisions where declines even with a high credit score greater than seven twenty where the dealer doesn't understand and may push back? Yeah. So that that's a great question, and and here's the answer to that. It does create some some friction with dealers occasionally. But I think for for us, we we have to if we're gonna employ that technology, we have to trust that technology. And so far, there have been some deals that I didn't completely understand, the the the decline. But I will say this, there have been far more deals that I and the dealer would both agree we were more surprised with the decision to approve. Great feedback. This, I think, is really for both of you. So, Dominic, we'll start with you. How do you handle the relationship between the f and I and dealer when the f and I made an exception? I think that's a financial institution made an exception, And now the member is a first payment default or delinquent within a year of getting the loan. So Yeah. I've had multiple conversations when there's someone who, you know, has a tie to the dealership and, you know, they basically get asked, hey. We're not having an issue with this deal. Right? And, the answer is, yeah. You won't have an issue with that car. You know, I had a customer who she bought a she bought a Toyota Corolla, and it was a single mom in a tough situation. And I asked for a a a pretty hard call, and I and I got the yes. Well, fast forward about months, when the car ended up having a a transmission fall out of it, and there was a real issue, and there was a real issue that was posing a risk back to the to the lender. We actually bought that car back directly from the consumer and the and the loan went away. One thing also, and this I don't see happening with credit unions near as often, but there there are situations with our captive lender that, you know, we'll look back at them and say, hey. You know, we're gonna have this, and and we'll you know, if the loan defaults, we'll become the the lienholder at that point. That's a great partner answer. Thank you, Dominic. I have been a poor pilot. It is twelve o'clock West Coast time, three o'clock for our East Coast friends. Greg? Can I just say real quick? I just saw a question pop up. Is Greg open to questions outside of the webinar? Absolutely. I'm on LinkedIn, and I'm I'm okay with, an email as well, g goodman at o r n l f c u dot com. I have a passion for what we do, in in terms of a credit union and being a dealer partner. So by all means, please reach out. Thank you, Greg, for jumping in there. So thank you, Dominic and Greg, for joining us today and for sharing, all the valuable insights and perspectives, from each side of the house. I would like to invite everybody that's on this call to join us at Lending Tech Live in twenty seven, which will be taking place at the beautiful Cosmopolitan Hotel in Las Vegas, June twenty eighth through thirtieth. We like the desert in the middle of summer. Be sure to scan the QR code to save three hundred dollars off your registration. And please stay connected with us through our social channels and tune in to hear timely industry conversations on on with Origins, our podcast. Thank you again for joining us today. Have a wonderful day. Greg, Dominic, thank you so much.