Non-Prime Auto Lending: Tools for Implementation

It is estimated that families can increase their income by as much as 25% with access to reliable transportation. With 88% of Americans driving to work, this is a huge need and also an opportunity for credit unions to make a difference.

The Foundation, in partnership with the Filene Research Institute, worked to assist low- and moderate-income consumers with its product incubator for Non-Prime Auto Loans. The 18-month pilot program closed at the end of 2016, with 10 credit unions participating across the country.

Non-prime refers to the practice of making loans to borrowers with weak or no credit histories or limited payment capacity. Research shows there is a tremendous opportunity for credit unions to reach out to this market that has been disserved by predatory lenders and under-served by traditional lenders. Through prudent pricing for riskier non-prime auto loans, credit unions can add to their bottom lines, while at the same time fill a social need of helping consumers improve their health and well being through affordable credit for used cars.

During the Foundation's pilot, over $102 million was lent to borrowers with an average interest rate of 11.47%. Over 7,605 loans were closed. Considering the average borrower credit score of 581, the rates are lower than what most consumers would have received elsewhere.

For More Information... Danielle Brown, National Program Director, at (608) 231-4353 or

"This program is in alignment with our Mission,‘to provide for the well-being of our Members’ and speaks to our Core Values, ‘Membership, Service, Integrity, Community, and Education’. We are here to help our members, and this applies to all of our members. We provide the education to those that need it the most when it comes to obtaining safe and reliable transportation and fair pricing when it comes to the financing.”
- Jim Brown
Senior Manager, Lending
University FCU