Aberdeen Proving Grounds FCU (APGFCU) has hit a groove in auto lending, making the most of its bounty with automated and instant decisioning.
The $565-million CU leads the pack in its two-county FOM, averaging $5-million per month in loans, 10 times greater than 2002 volume and more than any other local auto lender.
To help keep that success in hand, APGFCU employs a credit-decision engine that delivers instant approvals and denials. Two years ago, the $565-million CU installed LoanCenter Consumer, the APPRO Systems, Inc. automated credit evaluation and loan processing system.
"LoanCenter and auto-decisioning has had a major impact on our growth," said Margaret Combs, Information Technology project manager at APGFCU. "LoanCenter gave us the ability to not only make prompt decisions, but to make those decisions based on our own rules."
"In addition, LoanCenter lends more consistency to our decisions," added John Hricik, senior vice president of lending at APGFCU.
To sweeten the deal, in August 2004 APGFCU added LoanCenter's connection to the DealerTrack, Inc. online dealer-to-lender financing platform. DealerTrack automatically feeds dealer requests and consumer application information to the CU's LoanCenter interface. Decisions are instantly returned along the same electronic route.
Thus, APGFCU can return decisions in as little as a few seconds. In comparison, a manual keying and faxing process can take an hour.
"Since we've had DealerTrack, we've had a better chance of being the first lender to get back to the dealer and a better chance of getting the deal," said Robyn Mannone, the CU's assistant vice president of lending.
Applications imported via DealerTrack represent more than 75 % of the applications APGFCU receives from dealers, she added.
The credit union is using LoanCenter for all consumer loan products. About 30 % of the CU's indirect lending applications are auto-decisioned, Mannone said. Aberdeen Proving Ground FCU will adjust decision rules to allow more instant loan decisions once it "gets more comfortable with the decisions LoanCenter is making," Hricik said.
With LoanCenter, APGFCU can also automatically take a closer look at each applicant and offer a correctly-priced product based on each individual's risk.
"For example, the platform is flexible enough so that if a borrower came in with a stronger loan-to-value, but a lower Beacon score, we could generate rules so that the borrower could be approved based on certain criteria."
APGFCU turned to LoanCenter and DealerTrack after observing a "deterioration" in the number of auto loans it financed over the years -the CU wasn't even a top-five lender in its counties, said Hricik.
"We have a lot of members who finance automobiles in our two counties," he explained. "They used to come to the credit union to finance their cars. We realized we needed to add the dealer business to help retain the financing, which in turn led us to use LoanCenter and DealerTrack."
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For info on this story:
* Aberdeen Proving Grounds FCU at www.apgfcu.com * APPRO Systems at www.approsystems.com
