CENTRIX Meets With NCUA On IndirectLending
DENVER - (11/14/05) -- CENTRIX, whose subprime, indirectauto lending business has now ground almost to a halt in the wakeof a Risk Alert from NCUA, says it is meeting with the agency toresolve its concerns and believes it will again soon be offeringits program to credit unions. CENTRIX, which has grown rapidly andhas underwritten $4-billion in subprime auto loans at credit unionssince 1998, acknowledged credit unions have hit the brakes on suchlending following the June issuance of a Risk Alert following asharp increase in outsourced, indirect and subprime auto lendingsince September 2004, saying it was concerned that credit unionshaven't enacted effective controls and monitoring systems that maypose a risk to your credit union's net worth. CENTRIX VP ofCommunications Lauren Sides told The Credit Union Journal thatcredit unions have backed off indirect loans as they work throughtheir internal guidelines and practices. Sides said it was a"temporary halting" of new loans while CUs get up to speed with newindirect loan guidelines. Sides said roughly 120 CENTRIX employeeswere laid off as a result of the slowdown, but added 40 to 50 ofthose employees have since been brought back on in new positions inloan management in other company programs. CENTRIX is stillservicing the loans in its program, and has been meeting withNCUA.