Indirect Lending/Dealer Processing
More and more credit unions are moving toward some form of indirect lending or dealer lending programs. CU*BASE includes the following options to track activity and key data information for your credit union's indirect lending/dealer program.
Also learn about Indirect Lending consulting opportunities in the Lender*VP store: https://store.cuanswers.com/store/lendervp/indirect-lending-lendervp/.
Dealer Database
CU*BASE allows you to build a dealer database via Tool #245 Configure Dealer Info for Indirect Lend. that tracks key information regarding the individual dealer, including name and address, contact information, and reserve percentage. Learn More.
Link Member Account to the Dealer
Tool #438 Link/View Dealer Member Loans ties the member loan account to the dealer number to allow the credit union to track all current dealer notes in the loan portfolio. This function also allows the system to calculate the periodic reserve based upon a reserve rate and loans opened during the key period. Learn More.
Calculate Remaining Reserve Amount and Link Loan to Dashboard
The "Add/Link" option from Tool #438 Link/View Dealer Member Loans allows you to calculate the remaining reserve amount while you link the loan to the dashboard above. Learn More.
Dealer Reserve Monthly Amount and Remaining Reserve
The printed report from Tool #1150 Indirect Loan Reserves Report allows the credit union to list total loans by dealer, choose loans opened within a certain period, and filter loans to view only certain loans. The report shows monthly reserve amounts by loan and by dealer like the report below, but also shows the remaining reserve amount. Learn More.
Dealer Trial Balance and Reserve Calculation Report
The printed report from Tool #333 Dealer Trial Balance / Reserve Calc. Rpt allows the credit union to list total loans by dealer, choose loans opened within a certain period, and calculate reserve for a specific period. Learn More.
Terminology
In order to better understand how the Dealer Tracking software works, it is helpful to understand certain basic terminology:
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Term |
Definition |
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Indirect Lending |
Often, a credit union member or any borrower will apply directly with a sales company for a loan for their purchases. If the credit union has a relationship with these sales companies, the sale company loan officer may forward the loan request to the credit union for approval. If the loan is approved, the credit union would then “buy” the loan from the sales company. “Indirect” implies that the loan interview and the initial contract was completed by someone other than a credit union-employed loan officer. |
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Dealer |
In most cases, the word “dealer” is associated with a car dealership. However, the term may apply to any sales organization which brokers loans to the credit union (for example, appliance or furniture stores). |
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Reserves |
In many cases, the credit union may advance a commission to the dealer or sales company for directing the loan to the credit union. This commission is called a reserve. The accounting of the reserve generally depends on the volume of the reserves paid, but technically should be treated as an offsetting expense to the monthly income over the life of the loan.
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