LAS VEGAS -
Boutelle, the president and CEO of CUDL, sat down with the Credit Union Journal during the Rancho Cucamonga, Calif.-based company's recent Auto Lending Symposium here. He pointed out even the largest credit unions have difficulties creating scale and establishing their value proposition on their own.
"A network is only as valuable as the members participating in the network," he said. "CUDL is a co-owned company-owned by 83 credit unions-for the benefit of the credit union industry. Other networks such as shared branching gain scale by having more credit unions join, and therefore become more valuable."
"That's what has happened to CUDL," he added. "If the platform is used by auto dealers, it becomes more valuable to all participants."
Not only have networks helped CUs compete, Boutelle continued, the Harvard Management Update recently identified networks of interconnected organizations as the "new arena of competition" in the business world.
In addition to the many benefits credit unions reap from having a strong corporate CU network, he said the CO-OP Network started with just a few ATMs but today has more than 25,000. But when CO-OP was small and attempting to gain traction, it sometimes was difficult to grow, Boutelle asserted. "If we can get more credit unions into the CUDL network, auto dealers will see the advantage. CUDL must continue to expand, continue to get more scale, and continue to add value and processing efficiencies. Unlike corporate America, credit unions must have a tremendous amount of patience. Eventually, the network will make sense."
CUDL has grown from a single credit union to 604 CUs in 45 states, Boutelle said. Still, it has to fight what he termed a "big myth" that credit unions will not get credit for the loans they make through CUDL. According to Boutelle, the reality is auto dealers see one lending platform-which makes it easy for the dealers to use-but CUs can customize their interactions with CUDL.
One area of potential growth for CUs in auto lending is with independent auto dealers. Boutelle said 22% of cars sold in the United States are at independent dealers. He acknowledged CUs see these as "risky" because the dealers often do not hold the title, or because the cars are being sold on consignment.
During the Auto Lending Symposium, CUDL announced a partnership with Manheim Automotive Financial Services (MAFS), an Atlanta-based provider of vehicle remarketing services. The two companies said the agreement means credit unions can use Manheim's MAFS Advantage program to enhance the relationship between CUs and independent auto dealers.
Boutelle said the partnership would mitigate risk for CUs by guaranteeing vehicle title and ensuring trade-ins are paid. In addition, the new program handles auto registration paperwork through each state's motor vehicle department.
