The Indirect Payoff

Register now

Larry Biernacki thinks he can follow San Antonio Federal Credit Union's consumer loan performance with a hit sequel on the mortgage side.

"Indirect lending was our first focus," said Biernacki, SACU's senior vice president of Lending. "Now I've promised that I'm going to improve the member experience on the direct lending side."

Biernacki grew SACU's indirect loan production by about 14% in 2002, which was more than double that of average consumer loan growth that year, according to a Raddon Financial Group survey of select CUs.

In 2001 Biernacki migrated the $1.7-billion CU's largely manual credit decisioning process to an automated credit evaluation system using Appro Systems's LoanCenter Consumer. Appro is based in Baton Rouge, La.

"Appro has helped us do more with less hassle," said Biernacki.

Biernacki said the strength of Appro's decision engine functionality has simply made it possible for 18-branch SACU to approve more loans in less time and with less work.

Limited Human Involvement

"Appro gave us an opportunity to automate processes that were very labor-intensive," he explained. "Instead of having the loan officer key in the loan, pull the credit bureau reports, make a decision and then call the member back, that decision gets made in an environment where a human doesn't need to touch the deal.

"We are able to mimic human decisions with the decision engine. We are auto-decisioning more than 40% of our applications, including approvals and declines. That allows our loan officers to spend time with special circumstances that need the human touch," Biernacki continued.

LoanCenter allows SACU to quickly disperse decisions to the first point-of-contact, whether at the branch, the Internet or at a car dealership via Dealer Track's web-based, dealer-to-lender platform.

Credit decisions that might have taken up to five hours in 2001 before LoanCenter can now be made in as little as a minute, he said.

And fewer underwriters are needed to get the job done. SACU has trimmed its underwriting staff to 11, down from 21 before Appro, said Biernacki.

The 200,000-member CU's loan cache is still growing. "We're on track to do $72 million in auto loans this month," Biernacki said. SACU should reach $700 million in total auto loans this year, up from $600 million in 2003.

An Auto Model

Clearly, Biernacki would like SACU's mortgage department to mimic auto loan success. SACU pulled in a comparatively little $160 million in first mortgages in 2003, and anticipates about $200 million in first mortgage production this year.

Part of Biernacki's plan for strengthening first mortgage production hinges on the future of Appro's integration technology, said Biernacki. "I can do home equity loans with Appro, but Appro needs to continue to improve to meet the complexity of first mortgages. And Appro is working to deliver integrated solutions that allow the credit union to deliver whatever the member wants and to process all loans through one platform."

Although SACU was the first credit union to implement LoanCenter, nearly 70 North American credit unions now use the decisioning system.

CUJ Resources

For additional information on this story:

* San Antonio FCU at

* Appro Systems at

For reprint and licensing requests for this article, click here.