Upon completion of an initial assessment of a credit unions current indirect auto lending program, a CULM executive manager will discuss your credit unions business plan for expected indirect auto lending loan volume. Considerations will include:

• Credit Union asset size
• Capital allocated to non-prime indirect auto lending loan growth
• Percentage of indirect auto loan growth for next 3 years
• Management teams tolerance for risk
• Opportunity available for indirect auto lending within your market area
• Your credit unions commitment to serving the under served consumer
• Your business plan objective for reduced risk non-prime indirect auto loan growth

Rapid loan growth in any business venture should be closely monitored and we believe that financial institutions entering the indirect auto lending market should grow slowly to ensure all the potential problems that may arise are dealt with promptly and correctly.

Your income potential is directly related to the risk tolerance plan approved by your management team and the proper execution of your non-prime indirect auto lending program. The increase in loan growth will naturally increase your overall income.

The CULM management team has successfully managed profitable risk oriented non-prime and sub-prime indirect auto lending programs for the last 25 years. We know each local market area and the competition in your specific market area. Although we do not believe in pricing any loan product directly related to your local competitors, we do believe in understanding what your competitors are doing in your market space and what needs local auto dealers have that are not being satisfied by those competitors.

One of the significant costs associated with starting anon-prime indirect auto lending program is dealer set up and dealer marketing expenses. The CULM program includes our staff setting up all the dealers in your market area that will be sending you credit applications. The final decision of dealers to be approved lies solely with your management team.

You will receive a complete dealer file which includes:

• Dealer Agreement
• Dealer Profile Questionnaire
• Authorized Signers
• Copy of Dealer License
• Bank References
• Due Diligence Checklist

The cost for our experienced staff to perform this function is far less than the cost associated with you performing this task yourselves.

CULM’s extensive knowledge when managing risks associated with indirect auto lending is embedded in our entire training curriculum. Steps in this process include:

• Implement strategies for determining dealer fraud
• Implement an Underwriter exception approval policy

Processes to Review include:

• Performance of borrowers
• First payment defaults
• Delinquency trends
• Static pool data
• Remarketing efforts

When lenders receive credit applications from third parties (auto dealers) there is always an increase in risk that is not present when taking an application directly from the potential borrower. CULM protects their credit union partners by personally handling all potential dealer fraud issues including making the demands on dealers for contract repurchase that are sometimes necessary.

Most credit unions have efficiently run consumer lending departments that offer prime auto lending products directly to their Members. The CULM non-prime indirect auto lending program is based upon many years of trial and error and the successful performance of non-prime and sub-prime auto lending. These new members need to be handled differently that prime Members. Not because they are bad people, but because their recent track record indicates they need more intense collection efforts than prime Members. Our past partners have commented how they were able to use our best in class operational processes to improve their own prime auto lending operations.

The procedures CULM implements for your non-prime indirect auto lending program will greatly assist you in streamlining your prime operations and make your employees more productive.