Indirect Lending: It's All About Relationships

by Sue Lanphear

John Deere Community Credit Union in Waterloo, Iowa, recently received the 2003 Credit Union Excellence in Lending Award for consumer loan programs at credit unions with more than $250 million in assets The CUNA Lending Council and CUNA Mutual Group, Madison, Wis., sponsor the award, presented during the Ninth Annual CUNA Lending Council conference in Indian Wells, Calif.

Chalk up the credit union's consumer lending success to the relationships it fosters with members, auto dealerships, and grocery stores.

John Deere Community relies heavily on surveys to gauge members' future lending needs, evaluate how well the credit union meets members' needs, and identify relationships members have with other financial services providers to look for ways to better meet members' needs.

Ninety-three percent of John Deere Community's members say they're completely satisfied with the credit union, and 69% say the credit union is their primary financial institution. A 2002 corporate goal was to win over more members by increasing relationships with single-service households.

To do so, it sent a direct-mail piece focusing on its Visa GoldÒ credit card program to 1,300 single-service households that had joined during the past year. The campaign both boosted the credit union's credit card portfolio plus reaped 106 new account relationships of all types--generating more than $500,000 in new loans.

"Our members look to us as a source of information they can trust," says Trina Becker, John Deere Community's manager of credit administration. "They can count on us to be straightforward--no fine print or strings attached." For that reason, the credit union keeps its product and service offerings and promotions simple.

In addition, the credit union generated $80.7 million in new and used indirect-auto loans in 2002 via relationships with 126 dealerships in its field of membership. From those relationships, the credit union booked 7,255 loans in 2002.

How has the credit union built its strong network of dealer relationships? "Our indirect program manager, Lynn Widdel, and indirect loan officers build rapport through diligence and in-person visits to the dealers in their areas," says Becker. "Our loan officers aren't just over-the-phone contacts. The dealers are comfortable talking to us because they know us."

The credit union offers extended Monday through Sunday hours through its call center and area grocery store branches. "We have staff in four full-service branches in Hy-Vee grocery stores and in our call center, all of whom are equipped to do more than answer questions," says Becker. "Among other things, they approve loans and open new accounts." The Hy-Vee branches average 400 approved loans per month.

"We're proud of the service we provide, and we strive to maintain the level of service members expect," Becker says.

Other Credit Union Excellence in Lending Award winners:

• United Nations Federal Credit Union, New York, for mortgage lending programs at credit unions exceeding $250 million in assets;
• Mayo Employees Credit Union, Rochester, Minn., for mortgage lending programs at credit unions with less than $250 million in assets; and
• HEB Federal Credit Union, San Antonio, for consumer lending programs at credit unions with less than $250 million in assets.