January 9, 2024
ELGA Credit Union: Achieving Loan Growth and Success with CU Xpress Lease
ELGA Credit Union, A People-Focused Place to Bank
Established in 1951 as a non-profit cooperative, ELGA Credit Union ranks among the top twenty largest credit unions in Michigan. ELGA’s mission revolves around serving the underserved by considering the complete financial background of its members in every decision. This unwavering commitment to both members and the community has been pivotal to their success. Membership is open to residents, workers, worshipers, volunteers, or students in Michigan, including Saginaw Valley State University affiliates, immediate family members of current ELGA members, legal entities with similar demographics, and those contributing a $25.00 donation to the Salvation Army Bed and Bread Program (not available for online account opening). Since June 2022, ELGA has been a proud partner of the CU Xpress Lease (CUXL) program, and in this case study, we delve into the remarkable transformation and success that the CUXL program has brought to ELGA Credit Union.
ELGA Credit Union, A People-Focused Place to Bank
Established in 1951 as a non-profit cooperative, ELGA Credit Union ranks among the top twenty largest credit unions in Michigan. ELGA’s mission revolves around serving the underserved by considering the complete financial background of its members in every decision. This unwavering commitment to both members and the community has been pivotal to their success. Membership is open to residents, workers, worshipers, volunteers, or students in Michigan, including Saginaw Valley State University affiliates, immediate family members of current ELGA members, legal entities with similar demographics, and those contributing a $25.00 donation to the Salvation Army Bed and Bread Program (not available for online account opening).
Since June 2022, ELGA has been a proud partner of the CU Xpress Lease (CUXL) program, and in this case study, we delve into the remarkable transformation and success that the CUXL program has brought to ELGA Credit Union.
Headquarters: Grand Blanc, MI | Assets: $1.5 Billion | Members: 94,000 | CUXL Partner Since: June 2022
The Challenge
ELGA Credit Union was interested in offering leasing to help increase loan volume but was not interested in assuming any residual value risk or taking on the arduous lease maturity and remarketing process. They needed a partner who could bear all the risk and do the heavy lifting on the backend.
The Solution
ELGA’s partnership with CU Xpress Lease in 2022 was the solution to these challenges, with a primary focus on boosting loan volume, streamlining end-of-lease procedures, and aligning lease offerings with ELGA’s mission and membership.“CU Xpress Lease has been a game-changer for ELGA Credit Union. Their support and expertise have helped us exceed our leasing expectations. With their streamlined processes and unwavering commitment, we’ve achieved remarkable growth in loan volume. CU Xpress Lease is the partner every credit union needs for success.”
Lynette Shannon, Indirect Lending Manager
First-Year Highlights
703
Leases Booked
$30,353,765
Leases Funded
50%
Look-to-Book
Before CU Xpress Lease
The Rocky Road of Indirect Leasing
Before partnering with CU Xpress Lease in 2022, ELGA Credit Union had established a strong indirect retail presence but recognized an untapped opportunity in offering leasing.
ELGA was interested in offering leasing to help increase loan volume, but was not interested in assuming any residual value risk or taking on the arduous lease maturity and remarketing process. Recognizing these challenges and simultaneously desiring to tap into a market beyond their current dealership relationships, ELGA began their search for a partner capable of handling all aspects of risk and backend operations effectively.
The Discovery of CU Xpress Lease
A Path to Smooth Terrain
ELGA’s journey to partnership with CU Xpress Lease began with extensive market research, led by ELGA’s CEO, Terry Katzur. The research revealed key factors that highlighted the synergy between CUXL’s “full circle” approach and ELGA’s mission:
Significant Loan Volume Growth:
CU Xpress Lease’s expertise in indirect leasing boasted substantial growth opportunities and a streamlined process. CUXL actively engages dealers, promotes the program, and provides ongoing training and support to credit unions and dealerships. Acting as a dedicated liaison for credit unions, CUXL strengthens loan acquisition capabilities by facilitating dealer engagement, positioning ELGA for significant loan portfolio expansion while staying true to their core mission.
Elimination of Lease Maturity Handling:
CU Xpress Lease excels in efficiently managing the disposition and remarketing of vehicles at lease maturity, ensuring a seamless member experience. CUXL handles all lease maturity billing, including wear and tear, and bears the value risk on the vehicles. This alleviates the complexities involved in setting up and maintaining a leasing product for credit union partners.
Residual Value Guarantee for Peace of Mind:
CU Xpress Lease is the only provider that guarantees 100% of the full residual value, without exception. This guarantee enables ELGA to focus exclusively on originating high-quality loans.
Launching with CU Xpress Lease
Steering Towards Success
During the onboarding and launch of their leasing program, ELGA Credit Union benefited immensely from their collaboration with CU Xpress Lease. CUXL played a pivotal role in ensuring the seamless introduction of ELGA’s leasing program by offering invaluable support, comprehensive training materials, and expert guidance. Key elements of their successful onboarding included:
Dedicated Representative:
A dedicated CUXL representative enhanced communication and collaboration, managing dealer relationships and swiftly resolving any issues, fostering a harmonious partnership.
ELGA benefited from a vast network of leasing dealers in the state of Michigan, expanding their reach and potential borrower access.
Accessible CUXL Support:
ELGA appreciated the readily available CUXL team, who provided assistance and guidance as needed, particularly during the initial challenge of navigating new leasing terminology.
The seamless onboarding process and continuous support from CUXL have empowered ELGA Credit Union to establish and launch their leasing program with ease, further reinforcing the value of their partnership.
ELGA’s Success with CU Xpress Lease
Speeding Past Expectations
When ELGA Credit Union embarked on their journey with CU Xpress Lease, they held modest expectations, but the program’s performance exceeded their wildest projections.
First-Year Performance:1,419 applications | 965 approvals | 703 leases booked valued at $30,353,765 | Look-to-Approve: 68% | Approve-to-Book: 73% | Look-to-Book: 50%
Key Achievements:
- ELGA initially aimed for $5 million per month in leasing but surpassed it, reaching an impressive $10 million per month.
- ELGA attained a 50% Look-to-Book rate through an optimized application process.
- ELGA’s rate adjustments demonstrated their adaptability, contrasting with their previous rate stagnation.
A Flood of Volume:
Initially, ELGA expected a slow uptick in volume, but the floodgates were opened, leading to a whirlwind of activity. They quickly realized the program was doing precisely what it was intended to do—generate volume when needed.
ELGA strategically offered aggressive rates at the program’s outset that contributed to its initial success and generated significant volume. Recognizing the need to temporarily reduce volume, ELGA made the decision to slow down, and the CUXL team responded promptly to support this adjustment. Nevertheless, this approach helped with their overall success and demonstrated the program’s ability and flexibility to deliver when necessary.
Program’s Impact on Success:
CUXL’s impact on ELGA’s success goes beyond generating volume. ELGA has optimized their application process with CUXL, eliminating unnecessary reviews and improving overall efficiency. This leasing advantage allows them to focus their efforts on viable applications, resulting in a robust 50% Look-to-Book rate.
Additionally, ELGA can now offer their members a more financially accessible auto financing option compared to traditional loans. Leasing, with its typically lower monthly payments, provides this benefit without requiring extended loan terms, even in the face of rising market costs and interest rates. Leasing is particularly valuable for members who may face challenges in affording a new vehicle, opening up additional opportunities for ELGA that might not have been possible otherwise.
Insights Learned About the Leasing Market:
ELGA’s partnership with CUXL not only boosted loan volume but also transformed their leasing philosophy. This collaboration provided ELGA with invaluable insights into the leasing market, emphasizing the significance of the money factor and the need for adaptability in a constantly changing market. After being stagnant on rate for the previous 12 years, ELGA has made four rate adjustments since the launch of their program, demonstrating an adaptability that is crucial in Michigan’s leasing landscape. This innovative approach, which starkly contrasts with their 25-year tradition, has been a refreshing revelation for ELGA.
Conclusion
The partnership between ELGA Credit Union and CU Xpress Lease has been truly transformative, propelling ELGA towards unprecedented success and exceptional performance in the leasing market. In the first 12 months, ELGA successfully booked an impressive total of 703 leases, with a combined value of $30,353,765 and a strong 50% Look-to-Book rate. This exceptional growth in loan volume can be directly attributed to the unwavering support and dynamic dealer engagement provided by CUXL. These factors not only helped ELGA surpass initial expectations for loan volume, but also empowered them with invaluable market insights, highlighting the critical role of the money factor and the need for adaptability.
Furthermore, the streamlined lease maturity process (handled solely by CUXL), complemented by the unrivaled peace of mind offered through CUXL’s residual value guarantee, has enabled ELGA to focus exclusively on what it does best – serving their members.In conclusion, ELGA Credit Union’s ongoing success is a testament to the transformative potential of their strategic partnership with CU Xpress Lease. This collaboration underscores the immense value that CU Xpress Lease brings to the table in today’s ever-evolving financial landscape.
About CU Xpress Lease
The Nation’s Premier Auto Leasing Program for Credit Unions
CU Xpress Lease, a Fusion Auto Finance lease product, is the nation’s premier automotive leasing program for credit unions that generates a solid return on investment, delivers high member satisfaction, and guarantees 100% residual value at lease maturity. Total volume of the program exceeds $6.4 billion and 173,000 vehicles. Additional information can be found by clicking here.
About CU Xpress Lease
The Nation’s Premier Auto Leasing Program for Credit Unions
CU Xpress Lease, a Fusion Auto Finance lease product, is the nation’s premier automotive leasing program for credit unions that generates a solid return on investment, delivers high member satisfaction, and guarantees 100% residual value at lease maturity. Total volume of the program exceeds $6.4 billion and 173,000 vehicles. Additional information can be found by clicking here.