‘CUDL Way of Life’ results in more booking, better dealer relations, and expanded market presence for Amplify Credit Union

When $930 million Amplify Credit Union, based in Austin, Texas, switched to the CUDL platform it was more than just a change of indirect auto lending portals, it represented a move up to the “CUDL way of life,” according to Tony Kountoupis.

Kountoupis, the credit union’s VP of consumer lending, said Amplify had been using two competitor platforms prior to making the upgrade to CUDL in June 2016 – and the positive change was quickly evident.

“Our staff quickly settled into the CUDL way of life,” Kountoupis said. “Being on the CUDL platform allows us to tap the expertise of analysts, who give us a better idea of the big picture. When we hired a new underwriter, and trained her on our systems, her feedback early and often was she much preferred working with the CUDL system.”

“With CUDL it was so easy,” recalled Kevin Garraway, Amplify’s Consumer Underwriting Manager. “On day one we noticed how much information was at our fingertips. Of course, it was new and some things were different, but the system was easy to learn. Because we are not looking at as many applications now as we were before, we can focus more on the dealer relationship aspect of lending. We encourage our people to reach out to the dealers to talk.”

When Amplify was still using its previous indirect lending platforms, Kountoupis said the management team felt the credit union was doing well from a production standpoint, but it was battling a host of inefficiencies.

“We struggled with reports and we had difficulty with dealer relationships,” he said. “Anyone who is going to operate in the indirect space knows dealer relationships are everything. We need thoughtfully-submitted applications. We wanted to expand outside the footprint of Austin and offer our program to dealers.”

Making the switch

Amplify CU has been involved in indirect auto lending for many years. Kountoupis noted most of that time it used two other platforms. “They are ok platforms… for some lenders,” he said. “For us, the relationships with dealers are so incredibly important, and with those previous platforms we were unable to maximize our dealer relationships.”

In 2015, the management team began a “serious conversation” about switching to the CUDL platform, Kountoupis continued. He said the VP of consumer lending at that time shared the “great experience” his previous credit union had using CUDL.

More booking, less fruitless looking

Amplify CU has seen multiple benefits from its switch to CUDL. Most significantly, the credit union has experienced an increase in the quality of applications, improved relationships with dealers and easier underwriting, due to the system’s use of electronic information. Kountoupis said another positive is getting away from the practice known as dealer “shot-gunning.”

“It’s a common practice for dealers to shotgun applications,” Kountoupis said. “On other platforms, a dealer might send an application to five or six places at once. However, they have no intention of sending the loan to some of those lenders. We felt we were getting an inordinate number of applications that were not going to make it to the finish line. The dealers were using us like a kid applying for college uses a safety school.”

Benefits of a CUSO partnership

Valarie Ivester, Amplify’s indirect relationship manager, said yet another benefit to upgrading to the CUDL platform is the credit union receives all the benefits of the company behind the technology.

“It is important to have a CU Direct representative working with us. Previously, we had difficulty holding a dealership accountable because we did not have good reports,” Ivester said. “I had a dealer tell me he had not worked with credit unions and never would. I told him the CUDL system was superior to other systems out there, and he needed to be open to doing more than just what he was used to doing. We worked with our CU Direct rep to sit down with this dealer -- and others -- to show them how easy the system is to use. Our rep really did the work, which is so important. We worked together to communicate with dealers to build relationships and eliminate hurdles.”

Faster funding

Ivester, Garraway and Kountoupis agreed Amplify has benefitted from CU Direct’s SmartFund program within CUDL, which allows easy electronic funding. They pointed to the obvious benefit of being able to underwrite and fund very quickly, because that makes the dealership feel good. Kountoupis said most dealers look at 15 minutes as the maximum time for a response from a potential lender.

“Really, you need to respond within 5 minutes,” Kountoupis said. “If a dealer knows you are going to respond quickly and then fund quickly, that is everything.”

Before Amplify implemented CUDL it was still using paper files for proof of income, insurance and title. This involved going through a huge stack of paper related to each application, which was “very clunky.” Kountoupis noted that the credit union likes to take advantage of technology when it is available, “and the electronic submission capabilities of the CUDL platform really works with our values. The dealers scan and upload everything, we can ask questions if there is an issue, and we typically can fund the same day. That is special.”

Building an indirect lending program does not happen overnight, Kountoupis noted. “There is effort required on the part of the financial institution. It took us about six months to get to the same production levels after bringing dealers over to CUDL. But once we reached that point, we began operating so much more efficiently. It was far less about an exponential increase in production than it was operating at an optimum level. We can put $10 million on the books in a month and it feels like a cakewalk. Previously it felt like a massive undertaking to reach that amount in a month.”

Growing relationships with dealers

With its previous lending platforms, Ivester and Kountoupis felt the best way to manage Amplify’s indirect lending program was to work mostly with 10 dealers, out of a network of approximately 45 to 50 dealers, and have those 10 send the credit union a large number of applications. They said that still can be a pretty effective strategy for some financial institutions, but expanding from 10 dealers to its present 110 has been “great” for Amplify. Kountoupis said this expansion has diversified both risk and geographic reach, and it allows the credit union to work with dealers in small towns that may only produce a few deals a month.

“We can have meaningful relationships with many dealers,” Kountoupis added. “Dealers are able to pull their own reserve statements, which is so huge.”

Garraway noted that some people would find expanding from 50 dealers on another platform to 110 on CUDL to be a little intimidating, but he said the program is very “user-friendly,” which makes it possible.

“I didn’t have to do much to coach up the underwriters after we switched, “Garraway recalled. “We have significantly cut the time needed for underwriting because all the necessary decisioning information is in one place. Once you start using CUDL, it is a seamless process. The number of deals we have to burn through is down significantly because we get better applications. Our look-to-book is way up.”

Today, Amplify receives approximately 1,300 to 1,400 applications per month. Previously, it could expect 2,600 applications per month, sometimes as many as 2,900. However, the credit union’s look-to-book was 13 percent to 14 percent; today it is 20 percent to 22 percent.

“We might even hit 25 percent in a good month,” Kountoupis said. “Keep in mind, underwriters are not robots, so it helps them by not having to see so many applications.”

In 2015, Amplify CU did $112 million in indirect auto loans. In 2018, it booked $125 million in indirect loans, and it did so while wading through less than half of the number of applications it did in the earlier time period.

All in all, Kountoupis said Amplify’s expectations of the CUDL Platform have been met and surpassed in some areas.

“We are never where we want to be, we want to keep expanding and improving, and with CUDL we can achieve this.”