Join host Vince Passione as he meets with Bill Moniz, CEO of Cinch, to discuss the turbulence and trends of the auto finance industry. From the rise of negative equity to prime-only lending strategies, Bill shares insights on how credit unions can navigate credit quality challenges, discusses educating members on financing options, and gives his thoughts on market reactions to an expected Federal rates drop.

Key takeaways:

1:21 - The history of Credit Union Loan Source and Cinch: Two organizations operating as one.

3:07 - ‘Market Day Supply’–the metric used to calculate how many days it would take to sell all of a specific car model–is still higher than long-term trends, but is leveling out to near pre-Covid levels.

6:50 - Almost a quarter of new vehicles financed have negative equity rolled into them.

9:08 - While credit unions’ market share of auto loans has increased over the last two years, so too has delinquencies–increasing risk for credit unions.

10:48 - Consumer debt priorities have changed. Now, cell phone bills are the priority.

12:59 - Could subvention be utilized more effectively in the EV market?

16:23 - Auto-focused fintechs are cutting back, not making as many inroads as they have done in previous years, but direct-to-consumer innovation remains.

18:17 - Inventory management is an underutilized innovation category that could support more auto-purchasing.

19:55 - Personal unsecured loans have underperformed, and this is a concern for lenders and a risk for credit union balance sheets.

21:17 - Auto-lending is a nuanced service that takes time and expertise to navigate successfully.

23:28 - Expectations of what happens if and when the Fed lowers rates.

Resources Mentioned:

• https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html Manheim index
• https://www.businesswire.com/news/home/20240628537547/en/KBRA-Releases-Research-%E2%80%93-CMBS-Loan-Performance-Trends-June-2024 KBRA, delinquencies on asset-backed securities report
• https://www.cbsnews.com/news/cdk-attack-update-outage-car-sales-impact/ CDK outage
• https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/accounting/current-expected-credit-losses/index-current-expected-credit-losses.html CECL reserves
• https://www.cinchautofinance.com/ Cinch

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#CreditUnions #Lending #AutoFinance #AutoLending

If the 67 million Hispanic consumers in the USA were their own nation, they’d have the sixth largest GDP in the world. And yet, they’re overlooked and underserved by mainstream banks and credit unions alike. On this episode, host Vince Passione and Victor Corro, CEO of Coopera Consulting, discuss how credit unions can earn the right to serve these nuanced members.

Key takeaways:

03:17 - “Hispanic, Latino, Latinx” are imperfect labels that fail to acknowledge the depth and nuance of individual identity.

06:51 - Credit unions need to increase their research in, and understanding of, multicultural members as the nation prepares to be “Majority minority.”

10:26 - How building and earning the trust of underserved communities is key to a credit union’s mission, and its long-term growth.

13:08 - Hispanic members gravitate towards fintech solutions because fintech have done a better job of reducing friction points.

16:05 - Key products, services and solutions to support the breadth and scale of Hispanic members.

21:27 - The credit union system is lacking a sense of urgency, and needs to be more proactive about investing in serving multicultural members.

23:25 - Multicultural consumers are often pigeonholed–and that’s leading to poor service from financial institutions.

Resources Mentioned:

• https://www.brookings.edu/articles/latinos-and-the-future-of-finance-why-we-need-to-examine-the-motivations-and-effects-of-latinos-fintech-adoption Brookings study
• https://www.cooperaconsulting.com/ Coopera Consulting

Thanks for listening to the 22 Minutes in Lending podcast. If you enjoyed this episode, please leave a 5-star review to help get the word out about the show and be sure to subscribe so you never miss another insightful conversation.

#CreditUnions #Lending #Credit

Serious mistakes on credit reports is the number one consumer complaint, but are these issues really a surprise? The systems were developed decades ago, and were never intended to take the scale and breadth of information the modern consumer can now provide. On this episode, host Vince Passione is joined by Christian Widhalm, CEO at Bloom Credit, to discuss the opportunities for improvement.

Key takeaways:

01.24: Almost a quarter of people find serious mistakes in their credit reports. The CFPB cites errors as the number one consumer complaint.

02:18: The rails credit data is transmitted on were never designed to take the modern volume and breadth of data inputs.

05:05: Even long-tenured, established lenders continue to make fundamental mistakes on credit reporting–partly due to the systems being decades old, and the data requirements being increasingly nuanced.

07.38: Bloom Credit has developed a bi-directional API providing lenders with consistent information, regardless of what credit bureau they’re pulling from.

11.12: Bloom Plus is a new product to enhance consumer management of their own credit data.

14.00: CFPB announced a new rule on Buy Now Pay Later lenders, requiring updated standards, but BNPL credit reporting continues to lag.

15.12: With each credit reporting bureau pursuing its own solution to BNPL reporting, BNPL lenders have been able to sit back and await their decisions without taking proactive steps.

18.12: Why credit reporting would also be good for BNPL lenders.

20.14: CFPB has been critical of credit reporting, and there may be a potential ‘New standard of care’ introduced.

Resources Mentioned:

• https://bloomcredit.io/ Bloom Credit
• https://bloomcredit.io/products/bloomplus/ Bloom Plus

Thanks for listening to the 22 Minutes in Lending podcast. If you enjoyed this episode, please leave a 5-star review to help get the word out about the show and be sure to subscribe so you never miss another insightful conversation.

#CreditUnions #Lending #Credit