According to a survey by Wolters Kluwer Financial Services, indirect lending will play a big role in overall growth of U.S. banks and credit unions. More than half of the compliance officers and consumer lending officers who responded to the survey felt that indirect lending will be critical to the overall growth of their organization during the next two years. Credit unions were more likely to express that attitude than banks.
As lenders look to do more business in the indirect lending space, they identify risks associated with doing business with third parties, like marine, auto and RV dealers, to avoid vehicle loans that would hurt a lender in the future. Lenders’ top concerns when working with dealerships include incomplete loan documentation, lower quality applicants and dealers’ compliance knowledge.