WEST PALM BEACH, Fla.-Credit Union Journal asked auto lending execs and analysts for their advice on managing the auto loan portfolio in a rising rate environment. Here's what they had to say:
Bill Vogeney
EVP/CLO
Ent FCU
Colorado Springs, Colo.
Monitor before you move: Watch your market carefully. Look to see if lenders are moving and by how much. Some may be hesitant to raise rates-it really depends on each lenders' operating environment. A lot of lenders, too, may breathe a sigh of relief and say, "Great. Rates are starting to move up," and just increase rates without a lot of thinking. But be careful in following those lenders. Sit down with your CFO and crunch the numbers and figure out where you need to be.
Tony Boutelle
President and CEO
CU Direct
Ontario, Calif.
Use analytics to go deeper into the portfolio. Rising rates likely means an improving economy and more car sales. But don't just loosen credit standards without diving into the database. Use analytics to determine how you might go deeper into credit tiers. Determine if criteria you put in place several years ago don't make sense anymore and you can take them away to remove a barrier to extending more loans to more members.
Pete Radike
Director of Product Management
Fiserv's Lending Solutions Division
Brookfield, Wis.
Remain diligent in credit criteria. Just because there is an increase in demand, and economic times may be getting better, don't loosen the saddle on credit criteria. The lenders that did a good job of surviving and thriving through the last four years were the ones who remained relatively consistent and stable with their credit policies.
