Loan Zone: Auto lending never felt so safe

3 short case studies featuring credit unions that have served more members with higher returns through Open Lending.

Given the softening of the auto lending market, now is a perfect time for credit unions to test the near- and nonprime auto lending waters.

Clients of Open Lending, a provider of automated auto lending solutions and default insurance, earn 300 to 400% higher net return on assets on their near- and nonprime portfolios than on their prime portfolios. Open Lending loans are backed by Lenders Protection default insurance while employing alternative data to more accurately determine a borrower’s credit risk. This allows credit union clients to say “yes” to more of the auto loan applications they’re already receiving.

Return Exceeds Expectations for Silver State Schools CU

Take, for example, $790 million Silver State Schools Credit Union, located in Las Vegas, a city with an average credit score of less than 633, the bottom 9% of 2,570 U.S. cities, according to a 2016 WalletHub report. CUES member Scott Arkills, CCE, president/CEO of the credit union, has a long history in nonprime auto finance and wanted to reach out to troubled members. Providing auto loans to those who really need a hand just to get to work and pay the bills is a critical piece of Silver State Schools CUs’ mission.

 

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