In a recent blog entry, popular credit union speaker Mark Arnold reports on the success of St. Louis Community Credit Union through the use of indirect lending. St. Louis CEO, Patrick Adams, has been growing his credit union’s membership at an incredibly rapid rate of 13% to 15%, according to Arnold. The credit union’s return on average assets remains at about 1%.
Arnold goes on to report that the credit union’s loans are 55% used auto, stemming in part from its indirect program. Although many credit unions may see indirect lending as a way to grow new member numbers, St. Louis Community uses it as a delivery channel to both new and existing members. CEO Adams says his members average 5.1 products each and that he gets nets about 700 new members each month on average for the past three years. Yet, he claims those numbers aren’t just from growth by indirect channels. Instead, he uses indirect lending as a way to serve existing and potential new members. Indirect lending is a delivery channel, not a catalyst for growth, says Adams.
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