This article was originally published on CUToday.
Due in part to an increased focus on indirect lending, credit unions are now seeing a marked rise in auto loan delinquencies and repossessions, according to one company.
“We're seeing delinquencies and repossessions rise all over the industry. But what has notably changed is that credit unions are starting to see a greater share of the problems,” said Brooks Stewart, VP of Auto Finance Growth and Innovation at Allied Solutions. “We're seeing credit unions starting to experience the same thing that's been going on in the auto lending for about 18 months within the subprime and nonprime markets.”
Brooks Stewart
Vice President, Auto Finance Growth & Innovation, Allied Solutions
Stewart said rising delinquencies within credit unions can be attributed, in part, to expanded lending in lower prime and non-prime segments than they have in the past.
Lower Tiers, Higher Repos
But moving into the lower credit tiers, Stewart noted, has allowed credit unions to increase their member base over the last four years, much of that coming via increased volume from indirect lending.
“Delinquencies have risen over the past 24 months as we have come out of COVID and the money from the government has stopped. Within 90 days of that money stopping, delinquencies started to rise,” Stewart said.
Stewart sees the problem...(continue reading at CUToday.info)