Firm Sees Growing Niche In CUs, Sub-Prime Autos

- ENGLEWOOD, Colo. (03/08/01) A company that says itcan credit union penetration of the sub-prime auto lending market -and at very little risk - is anticipating it will see significantgrowth this year. Centrix Financial, which essentially securitizesand insures subprime auto loans one at a time, said it can and isdelivering a net yield to credit unions in the range of 11% to 13%average return on assets. Robert E. Sutton, chairman and CEO, toldThe Credit Union Journal that in the process, the company says,credit unions are able to ensure members who would otherwise bedeclined a loan are able to finance an automobile somewhere besidesa finance company or so-called "predatory lender." Called theCentrix Portfolio Management Program, it is targeted almostexclusively at credit unions, and the company has been working withthe Colorado Credit Union League. "Instead of securitizingthousands of loans after they are booked, we are able to insure theloan before it goes on the books," said Sutton. Sutton said claimshistory has shown that less than 3% of loans through its program gosour