San Antonio Federal Credit Union (SACU) has a membership base in excess of 200,000 and $1.7 billion in assets. It handles more than $780 million in loans annually and has 16 branches in San Antonio with two additional branches in Houston.
It had become apparent to management at SACU that a more efficient lending system was necessary if the credit union was going to maintain and grow its lending capabilities. In addition, the existing process was not nearly as member- or dealer-friendly as the credit union’s standard of service dictated. Members or indirect lending partners had to first complete time-consuming applications, have them faxed to the main office for underwriting and loan decisions (which could take hours) and only then was a decision transmitted back.
As the credit union reviewed its lending processes, SACU realized that it needed to push lending decisions out to the first point-of-contact or dealer in order to respond to its members more quickly. In order to increase the credit union’s lending capabilities, a system with the ability to auto decision and provide a response as quickly as possible was required. SACU selected APPRO’s LoanCenter Consumer™, an automated credit evaluation system developed to meet the special needs of consumer lenders through an application service provider (ASP) model.
“We chose LoanCenter Consumer because it enables us to get decisions back out to the first point-of-contact quickly, whether at the branch, via the Internet, at the car dealership, or wherever the member touched us,” said Larry Biernacki, senior vice president, Lending division. “APPRO’s system is also able to seamlessly integrate with other applications, such as DealerTrack’s online auto finance system, which enables us to offer indirect auto lenders an online, real-time loan approval system, which significantly and positively impacts our lending portfolio. It also integrates with most document preparation software which enables a more efficient work flow and enhanced member service.”
Regions Bank implemented APPRO’s system in 1995 and realized an almost immediate impact on its lending processes as a result. “We have realized a consistent return on investment from working with APPRO since we first implemented its MP-100 loan automation system back in 1995,” said Ron Luth, president and CEO of Regions Bank. “By automating our underwriting, it provided us with the necessary framework to automatically underwrite our loans and standardize our processes, which resulted in increased loan volume.”The credit union has successfully been using APPRO’s system for more than three years. Since the implementation of LoanCenter Consumer, SACU has experienced a significantly enhanced decisioning process and has increased its loan portfolio considerably. What was once a completely manual process is now fully automated through the utilization of LoanCenter Consumer.
“We have greater efficiency because our process takes fewer underwriters than before,” said Biernacki. “As a result, we have gone from 21 underwriters down to 11 and experienced loan growth in excess of 14 percent when the average credit union loan growth was just more than seven percent.”
“From the member side, we have greatly streamlined the process,” Biernacki continued. “Before implementation, members were put through a complex and slow process to gather the necessary underwriting information and receive a loan decision. Now, a member can provide the basic information and receive a decision ‘on the spot’ within minutes. It empowers us to make decisions quickly that would otherwise have to be made elsewhere.”
SACU utilizes LoanCenter Consumer for all of its loans. However, the credit union’s indirect lending channel has experienced the most growth and SACU’s current indirect loan portfolio represents a significant portion of total loans outstanding.
With APPRO’s DealerTrack interface, SACU has a complete automated process for indirect auto loans that can originate, score, underwrite, approve, document and board an auto loan with no staff intervention. With this system, dealer response time has been dramatically improved, and the credit union has been able to reduce response time from about 45 minutes to less than five. As a result, SACU recently earned the prestigious “Gonzo Award” from Scottsdale, Ariz.-based Cornerstone Advisors, a business and financial strategy and technology consulting firm for financial organizations. The “Gonzo Award” was presented to the financial institution with “the best lending process that doesn't involve humans.”
“The bulk of our loan growth, reduced response time and innovative processes is due primarily to our successful partnership with APPRO and its willingness to work with us and understand our members’ service and technology needs,” said Biernacki. “Without APPRO, we wouldn’t have increased our loan portfolio so greatly over our 3 year relationship. Not only did we have a significant increase in loan production, actual volume booked and growth of outstandings, but we accomplished this with less people than we’ve ever done before. Our next challenge is to replicate this automation completely on the direct delivery channel leveraging the APPRO technology and further deepening our relationships with our members.”
SACU is a $1.7 billion credit union, with 16 branches in San Antonio and two branches in Houston. The credit union provides convenience to members through a network of more than 100 ATM locations in the greater San Antonio area. The credit union also provides benefits to members through higher yields on savings, lower loan rates, and reasonably priced financial services. For additional information about SACU, visit the credit union’s Web site at www.SACU.com.