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CUs rev engines on Invest in America
LANSING, Mich. (1/26/09)--Although the hard numbers won't be available until February, the Michigan Credit Union League reports "a ton of action" on the lovemycreditunion.org website created for "Invest in America," credit unions' auto loan discount program with auto manufacturers General Motors Corp. and Chrysler Corp. "There are two ways to look at it," said Michael Bridges, director of public affairs. "Since the program went national, we have seen more than 350,000 unique page views. Another way to look at it is the website has seen 2.2 million hits in the first two weeks of the program, or 3.6 million since the program was rolled out in December." CUDL is reporting that 8,000 GM and Chrysler vehicles have been sold to credit union members. And GM reports it is seeing a 30% conversion rate on the number of people asking for a "Credit Union Member Discount" certificate to those actually buying a car, Bridges told News Now. To generate further interest in the program, two 15-second ads ran last week on the Jumbotron at the North American International Auto Show in Detroit. "We are in the process of putting a tracking component together" to monitor the progress in sales, Bridges said. "We hope to have some hard numbers in February." Meanwhile, in Indiana, one of the four original Midwestern states in the program's pilot with GM, about 2,500 individuals registered for the program during the first week, said Kay Neidlinger, spokeswoman for the Indiana Credit Union League in fwdailynews.com Jan. 23). Of that number, about 1,500 obtained a discount code certificate and more than 150 bought vehicles. The discounts are so attractive, they could end up increasing credit union membership, but the purpose of credit union participation is to offer existing members a good deal on one of credit unions' cornerstone products, auto loans, said Neidlinger. The Louisiana Credit Union League reported it's receiving "positive feedback from members" regarding the Invest in America program and a "high volume of calls from credit unions concerning participation in the program," reported its newsletter, eNews (Jan. 14). Several credit unions in New Jersey are participating in the program, according to Paul Gentile, CEO of the New Jersey Credit Union League in an article in TradingMarkets.com (Jan. 16). ADP FCU in Roseland, Riegal FCU in Milford, and Paragon FCU in Montvale will soon offer the program's incentives. Richard Rays, CEO at Paragon FCU plans to promote the program in the February edition of its member newsletter. "We have our staff calling dealers to let them know we are participating," he said. "The trick is to make those loans to people who will have the income to repay those loans." Paragon plans to cut its interest rate to as low as 4.99% , from its current rate of as low as 6.5% for qualified borrowers. The national credit union loan average is 5.4% , according to Datatrac, a firm that tracks auto loan rates. The average bank rate is 6.9%. In New Jersey, many credit unions already have marketing alliances with auto dealers through Credit Union Auto Group, which includes 50 dealers. Kensington Valley Community CU (KVCCU), Highland, Mich., has tied the program to its 50-year-anniversary celebration. "In addition to our already great rates, our members could qualify for up to 2.75% discount on a 24- to 50-month auto loan," Linda McCoy, KVCCU lending manager, told Hometownlife.com (Jan. 15). According to Mike Long, vice president of lending at UW CU in Madison, Wis., the credit union is participating in the program because is "presents a great opportunity for our members. Not only do they have a chance to save money on most GM and Chrysler vehicles, but they can also feel the satisfaction of helping support the U.S. auto industry." For Northeast CU, Portsmouth, N.H., the program is a no-brainer. "The new program comes during a challenged economy and that is why NECU is pleased to extend this to our members," said Peter Kavalauskas, president/CEO. Giving back to members while helping the domestic auto industry also is the reason Citadel FCU, Thorndale, Pa., is encouraging its members to use the loan deals. Citadel has no trouble generating auto loans. During the last few months of 2008, it originated more than $100 million in auto loans to the local community.
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