Unhappy With Results, AFCU Alters Indirect Loan Plan
In an attempt to slow growth of members acquired through indirect auto financing, Affinity Plus Federal Credit
The credit union has informed the 100 auto dealers participating in its "CU Save" program that only existing members would
The issue isn't the quality of the paper being acquired or resulting delinquencies, said CEO Kyle Markland. Rather, Affinity Plus
"These types of loans (typically) do have higher delinquencies and charge-offs, but nothing more than we previously experienced.
And, he added, it's not that his marketing team hasn't tried either. "We had direct call programs to members who financed their
Markland wanted to make it clear that the change doesn't mean the $850-million credit union hasn't been pleased with the results
Too Much Success
"Indirect lending programs do have a place in credit unions," he said. "This is in no way saying that we aren't happy with our
In fact, recent numbers indicated that 80% of all new members came through indirect auto lending. That success, however, ran
"Why would we just take a bunch of single-service strategies after we developed this (member relationship) program," he said.
He said the focus is on the individual needs and goals of each member, rather than on products or the organization. As a result,
Markland pointed out that indirect auto lending rates are still good for new members compared to the general market. Since
Since announcing its new strategy, Markland said, at least one other credit union in the area has said it intends to do the same.
Affinity Plus has more than 116,000 members throughout the state with one in two Minnesotans eligible to become members