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  • Writer's pictureJohn San Filippo

Lending Tech Live: The Tony Boutelle Interview

By John San Filippo


This year’s Lending Tech Live, the annual Origence user conference, was held June 25-27, 2024, at the Marriott Marquis San Diego Marina in San Diego, Calif. This marked the 30th anniversary for the lending CUSO. Finopotamus was onsite for opening comments from Origence CEO Tony Boutelle, followed by an exclusive interview with him.


Just the Facts

Boutelle explains all

After a brief history of the CUSO, including its origins as a joint effort between the California Credit Union League and Golden 1 Credit Union, Boutelle shared some current statistics.


“We have 122 credit union shareholders now, many of whom are here,” he told the audience. “We have actually represented at this conference 71 of the top hundred credit unions in the country.” He then showed a slide with the logos of the 45 automobile dealership owner groups in which Origence has an indirect lending presence.


“We are working on a capitalization plan going forward and we really want to see what you all think about how we might raise capital in the future,” he continued. “That’s the value of owning and controlling your delivery channel. We're doing fine today, but we really see that we need to get bigger.”


Three Businesses in One


Boutelle then discussed the CUSO’s evolution from Credit Union Direct Lending (CUDL, pronounced cuddle) to CU Direct to Origence. “CUDL became such a great brand in the sense that it was a verb; the dealers CUDL’ed the loan,” he explained. “But then we couldn't do anything else under that other than indirect lending.”


“Origence is our umbrella organization,” said Boutelle. “We have three things [under that umbrella]. We have CUDL, our indirect lending platform, which is still our biggest product. And we have our loan origination platform, which is arc OS and arc DX.” He added that a lending-as-a-service CUSO that Origence acquired a few years ago has now become Origence Lending Services.


Tesla and Beyond


The CUSO also formed a separate consumer finance company called FI Connect to help credit unions provide financing for direct-to-consumer auto manufacturers. Leveraging FI Connect, Origence is currently able to offer credit union financing directly through the Tesla website. In this environment, FI Connect originates the loan and then turns it over to a participating credit union. FI Connect is licensed in 47 states. However, based on current credit union participation, the company is only making Tesla loans in 36 states.


During his keynote speech, Boutelle mentioned that some credit unions were apprehensive about participating in the Tesla program. Finopotamus asked him if the concern is that, because FI Connect is originating the loan, the funding credit union’s own brand is not adequately represented in the transaction. “A hundred percent,” he responded. “I get it, too. But give me another option.” He added that there’s no way an individual credit union could get listed on Tesla’s website.


“Even Navy Federal is talking to us about it,” he added. “There was one credit union though that years ago was on the Tesla website, but they filled them up with so many loans, the credit union couldn't do it.” He noted, however, that Origence has no play in a situation where a member simply wants to use a direct loan from their own credit union to finance a Tesla.


The whole system relies on fast connectivity and fast computing because FI Connect must identify the credit union to which the loan will go before it commits to making the loan.


Boutelle told Finopotamus that Origence is currently developing relationships with other direct-to-consumer auto manufacturers, adding that the CUSO is also in talks with Amazon, which recently announced it will soon start selling Hyundai automobiles through its website.


Better Automation


Since its inception, Boutelle explained, the CUDL platform has relied on auto dealers faxing paperwork to the credit union, where a loan processor is required to manually input the information into the credit union’s loan origination system. This system is called Smart Fund


“The dealers do love [the current system],” Boutelle told the audience. “It’s working very well, but it isn't quite e-contracting. We do need to transfer to e-contracting for more accuracy, more efficiency, more portability of these kinds of loans. We announced today that e-contracting will be out by the end of this year.”


Boutelle continued, “We're partnering with several companies to create this whole process, which includes getting the application in our platform, having the forms, having the validation of the contract, having the signing ceremony, and then of course vaulting [the loan].” He encouraged members of the audience to volunteer as early adopters.


Boutelle told Finopotamus that one reason dealers like Smart Fund is because loans get funded faster. He said that even with Smart Fund, the CUSO can fund a loan next day via the FedNow Service. Once CUDL migrates to e-contracting, credit unions will be able to offer dealers same-day funding.


Finopotamus asked Boutelle to comment on having to satisfy both credit unions and car dealers, the two of which are often cast as nemeses. “One of the things I'm most proud of over the 30 years is that it, back when we started, it was oil and water. Credit unions and auto dealers hated each other,” said Boutelle. “A few credit unions had indirect programs, but most didn't. So, it’s just having a mutual respect for each other. Can I help you with your business? Can you help me with my business?”


In the end, he said it’s all about the member experience. “It's more convenient for the member,” noted Boutelle. “That's what's really happening. Now it's just managing that relationship and making sure that everyone gets what they need.”


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