A joint venture between California's largest credit union and a state trade association is heating up credit union auto lending from Sacramento to Los Angeles.

Credit Union Direct Lending, an automated loan approval system available from a California Credit Union League affiliate, helped 57 financial cooperatives rack up 14,000 car loans worth $240 million. It was the program's first year.

"It's very important for credit unions to be at the point of purchase, and Credit Union Direct does this," said Stan Hollen, chief executive of Golden 1 Credit Union, which has $1.6 billion in assets.

The Sacramento institution created the system in 1992 and, based on interest from other California credit unions, established an exclusive licensing contract to offer the program statewide with the California Credit Union League in 1994.

The system, available from the league's CU Direct Corp., works simply. Once a member of a participating credit union picks out a car and negotiates a price, the auto dealer punches the loan application into a dumb terminal hooked up to a mainframe located at Sacramento-based Golden 1, said Jim Weneta, manager of CU Direct.

The system either approves the loan or refers the member to the member's credit union for further review. If the loan is approved, the dealer gets a fax from the credit union with the institution's terms and conditions.

The system operates on a standardized scorecard, but it also can incorporate criteria established by a specific credit union, said Mr. Hollen, who also is chairman of CU Direct.

After the sales contract is completed, the dealer sends the paperwork to the credit union, which transfers the loan proceeds as well as commissions and administrative fees to the dealership's bank account in 72 hours, according to the league.

CU Direct currently has terminals at 165 dealerships, and the company expects to add 150 new dealerships by the end of 1996, Mr. Weneta said. Dealers pay a quarterly marketing fee.

Credit unions pay a $25 fee for each loan made to CU Direct, and a portion of each installment is earmarked to pay for research and development costs incurred by Golden 1, Mr. Hollen said.

About 50 more credit union clients are anticipated.

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