Politicians are frequent speakers to credit union meetings, and why wouldn't they be: credit unions not only have some sizable PACs, the movement also turns out the voters and the volunteers. So it's not uncommon to hear Represenative Rehashtheobvious or Senator Smileoncue speaking to a credit union audience, even if they're not particularly sure if the faces they can't really make out through the lights belong to credit unions or credit collectors or labor unions.
But Illinois Gov. Pat Quinn, who has a history with credit unions, showed he had done a little homework prior to recent remarks before NASCUS' annual meeting. "I took Latin in high school many years ago and I never thought I'd use Latin in my time," said Quinn. "But the word 'credit' in Latin means 'to believe,' and that's what credit unions do: they believe in people."
• In the Oct. 3 issue, Credit Union Journal featured a long, informational exchange between an audience of credit union lenders and four auto dealers that was part of a meeting hosted by Credit Union Direct Lending (CUDL).
Before parking that story away in the garage, here are a couple of additional notes, thoughts and ideas that space did not allow to include in that story.
When credit unions asked what they might do to improve their preapproval programs, Kyle Dudgeon, general manager of Evans Toyota in Indiana, said "simple guidelines" would be a good, first step. "If it's just a matter of paperwork and this deal is done, then the dealer will use that program," Dudgeon said.
Preapproval programs may seem a win-win, observed Paul McCarthy, general manager of Stevenson Auto Group in North Carolina, but they aren't always. "A lot of times the dealership ends up looking like the bad guy, because they are preapproved for this amount of money but we can't do the deal and they think we won't sell them that car for whatever reason," he said.
When some credit unions execs in the audience at the Renaissance Hotel in Arlington, Va. responded by saying that the dealer should be happy, as the credit union is sending them ready-made buyers, and should show a little gratitude by not charging the credit union the standard flat fee, Paul Green, sales manager for Jerry's Auto Group n Maryland said he disagreed. "We send you new members on a regular basis, so I think it's quid pro quo."
One thing the dealers made no qualms about was the "relationship" begins and ends with the money. Where are fees the lowest? Where can deals be turned around the fastest? All of the dealers professed a dislike for Bank of America that had nothing to do with debit fees, yet they still steer deals to BofA. "None of us here has a good relationship with Bank of America, we've all been lied to over the years. But we're also in business to be profitable," said McCarthy, who like the others added that it's all good and everything if the credit unions stops by with donuts, but...
The same theme was abundantly clear when one credit union lender pointed out that credit unions have never broken the 20% share of market threshold in auto financing and asked, 'At the end of the day, what can I do?"
"That's where enhanced fees come into play," responded Doug Michelson, general manager of Classic Toyotal Scion in Illinois. "If it's better than the captive, that would definitely help. If you have preapprovals, that helps. I'd rather send a deal to my credit union than to the captive. The reason is you're in the community; you're going to send business to me. We need to see where together we can mesh.
Paul Green of Maryland's Jerry's Auto Group picked up on that theme. "Why do we send the deals somewhere else? To make more money. You are paying 1.5% out right now; there are some credit unions we deal with where if we send you a current member, you pay us 1%. If we send you a new member, you pay us 3%. If we are bringing you increased business, why can't we get paid for that new business?"
The dealers weren't completely heartless, by the way. Green noted that earlier in the week a woman with a 720 FICO score had arrived at his dealership with a preapproved loan from a bank with a 9.9% rate. He was able to get her into a better loan.
• Guess who's coming to Dinar? In case you missed it, and I'd hate to see you victimized, so I will pass along this strong advice announced by the Wisconsin Department of Financial Institutions, which is "urging investors to exercise caution when considering investment in the Iraqi Dinar, the currency of Iraq."
It seems some Wisconsinites have fallen for pitches for investments in the Dinar, unaware that among the thousand other red flags, Dinars can be redeemed only in Iraq.
• In Case You Missed It II: In the recent NCUA Inspector General Report on the spectacular failure of St. Paul Croatian FCU, among the failed loans was one that went to "BS Construction." While that likely sums up the attitude of anyone who's worked with a contractor, the bogus loan did not catch the attention of examiners.
It may have been the only honest thing about St. Paul Croatian.
Frank J. Diekmann can be reached at email@example.com.