Randolph-Brooks Federal Credit Union loves helping its members achieve financial success. Historically, RBFCU had been conservative with its underwriting \u2014 but the credit union wanted a way to reach more members by taking a closer look at near- and non-prime borrowers\u2019 potential. To make this possible, they turned to Open Lending.<\/p>\n\n\n\n
Randolph-Brooks Federal Credit Union \u2014 a $9.3 billion institution in Universal City, Texas \u2014 wanted to engage more members, particularly those underserved by traditional financial institutions. Access to auto loans is critical for low-income families that need reliable transportation in their daily lives, and RBFCU needed a way to make a difference.<\/p>\n\n\n\n
\u201cWe have always been an advocate for our members,\u201d said Heather Sullivan, Senior Vice President of Consumer Lending, \u201cbut when it came to underwriting, we were always very conservative and wanted to be more inclusive and wanted to increase our car loans.\u201d <\/p>\n\n\n\n
It was important to RBFCU to find a partner with vast experience in the near- and non-prime auto lending market. <\/p>\n\n\n\n
\u201cWe felt more comfortable going with Open Lending rather than entering uncharted waters by ourselves,\u201d Sullivan added.<\/p>\n\n\n\n
Lenders Protection\u2122 offered a safe way for RBFCU to increase near- and non-prime auto loan volumes and yields without adding risk to their loan portfolio. With built-in default insurance, the program allowed RBFCU to model their specific overhead and funding costs and set a target ROA for their insured portfolio. The result: a profitable auto loan portfolio with carefully managed pricing and risk characteristics.<\/p>\n\n\n\n
After exploring a variety of loan decision engines, RBFCU was compelled by Open Lending\u2019s modernized underwriting process. <\/p>\n\n\n\n
\u201cWe were really impressed with the decision engine because it brings in different statistics and alternative data,\u201d Sullivan said. \u201cOpen Lending has been great about explaining what [the information is] telling the credit union. We see data that piqued our curiosity and analytics that have a story to tell.\u201d<\/p>\n\n\n\n
Open Lending also shapes lending strategy using insights from its 20+ years of proprietary client data. <\/p>\n\n\n\n
\u201cOpen Lending\u2019s vast experience in the near- and non-prime lending market, across hundreds of financial institutions, allows us to bring a wealth of knowledge to each of our clients,\u201d said Matt Roe, Open Lending\u2019s Chief Revenue Officer. \u201cThat really helps us guide our clients toward the path to success in a market where few have expertise and a winning track record. Randolph-Brooks has really taken our insights and consulting and run with it.\u201d<\/p>\n\n\n\n
RBFCU employees are happy to stand up as ambassadors for the Lenders Protection\u2122 program, Sullivan said. <\/p>\n\n\n\n
\u201cOur employees like being able to say yes. They\u2019re hearing from the members and feeling for the members. They love to get involved in what they\u2019re trying to accomplish and save them from going to a \u2018buy here, pay here\u2019 lot. It helps them feel good,\u201d she said. <\/p>\n\n\n\n
In instances where members are unable to fulfill their payment obligations, RBFCU follows its standard collections process. The credit union allows a 15-day grace period and then makes calls to help the member catch up. It also has a skip-a-pay option for short-term hardships. <\/p>\n\n\n\n
\u201cOur goal is not to repossess the vehicle. We want to try to help our members be successful,\u201d Heather said.<\/p>\n\n\n\n
RBFCU\u2019s results have been outstanding. The credit union approved 17,177 loans in 2018 that it would not have approved without Open Lending\u2019s Lenders Protection\u2122 program. In 2018, these loans equaled $109 million of RBFCU\u2019s $400+ million in auto loan growth. RBFCU\u2019s total return on investment in the Lenders Protection\u2122 program was 3.85%.<\/p>\n\n\n\n
On top of its financial success for RBFCU, the program has helped members feel valued and employees feel like they\u2019re making a difference. <\/p>\n\n\n\n
\u201cLenders Protection\u2122 helps our credit union to make more respectable loans to our members. When we considered what we\u2019d been doing, we looked at the data and many cars were low-priced and reliability was questionable,\u201d Sullivan explained. \u201cNow, with Open Lending\u2019s Lenders Protection\u2122, RBFCU is able to make higher-dollar loans for cars that tend to be more reliable, and it helps families be more successful in getting loans.\u201d <\/p>\n\n\n\n
For members, the application process for a loan with Lenders Protection\u2122 is no different from a standard auto loan application. This allows all members to have a respectful experience, regardless of their credit score.<\/p>\n\n\n\n
Open Lending remains actively involved with RBFCU. Open Lending team members facilitate onsite trainings for the credit union\u2019s 170-person call center staff and underwriters, and dedicated account managers provide consistent data updates and analysis. <\/p>\n\n\n\n
To Sullivan, Open Lending\u2019s ongoing support combined with Lenders Protection\u2122\u2019s 20+ years of proprietary data and risk analytics is the recipe for a \u201cfantastic partnership.\u201d<\/p>\n\n\n\n