Santa Rosa, Calif.-based Union Credit, a marketplace for credit unions to make firm, one-click credit offers at the point of purchase, recently announced a partnership with Chicago-based information and insights company TransUnion to serve the consumers’ evolving credit needs.
Union Credit, a fintech startup with a mission to help credit unions acquire new, creditworthy members from outside their ecosystems, officially launched in January 2023 with $5 million in seed funding, led by CMFG Ventures, and supported by Marin Sonoma Impact Ventures (MSIV), Array and other strategic fintech influencers.
Union Credit is the exclusive partner of CuneXus, a wholly-owned technology subsidiary of CUNA Mutual Group, that currently produces over $27 billion in loans annually. CuneXus co-founder Dave Buerger launched Union Credit with colleague Barry Kirby (Union Credit co-founder and chief revenue officer) to leverage this partnership and offer an embedded digital storefront model outside credit unions’ digital walls and into the open market.
Buerger, CEO of Union Credit, added, “TransUnion provides the fast, convenient access to data we need to give consumers more control over their financial opportunities. With TransUnion’s innovative trended credit attributes, algorithms, and fraud tools, Union Credit can more intelligently assess borrower creditworthiness, and help participating lenders determine appropriate loan amounts, interest rates and repayment terms, and make more relevant offers to consumers.”
Partnering with TransUnion enables lenders in the Union Credit marketplace to deliver financing in retail and consumer financial experiences. “Union Credit opens the doors for credit unions’ trusted relationships and competitive rates to become available in new marketplaces,” said Sean Flynn, senior director of community financial institutions at TransUnion. “We are excited to be a part of this movement by serving as the data provider of choice for their unique marketplace. Together we are empowering lenders to make more informed decisions, serve consumers more efficiently and effectively and increase financial opportunity for all.”
Getting to the Nexus of CU Memberships
“We are an embeddable marketplace for credit unions to offer preapproved loans to consumers, who are not currently members of their organization,” is how Buerger describes Union Credit.
The Union Credit marketplace aims to help credit unions break into new markets digitally with access to the front end of purchase and financing experiences, he explained. Merchants embedding Union Credit benefit from providing customers with local, competitive, and advantageous offers that are in the buyer’s best interest.
“CuneXus was sort of the pioneer in what we call ‘one-click lending’ or perpetual loan approval, elimination of the loan application entirely; replaced instead by a thorough analysis of available data,” explained Buerger. He added, “A lot of that data includes credit bureau data, of course. Thus, our partnership with TransUnion.”
Flynn acknowledged these are personalized offers. “We are doing that with trended credit data, which has much more predictive power, on the risk side; but also, the ability to personalize insights on every consumer. We are also using different algorithms and liquidity data.” Flynn pointed out this data enables credit unions to say “yes” to more loans, without adding on some of this additional risk. “That’s a huge deal; making sure that we continue to give credit unions the best tools that they can get to push their value proposition out and make sure they’re having an impact on the communities they serve.”
Buerger said whereas CuneXus focuses on expanding relationships with existing credit union members, Union Credit wants to bring new membership into the fold. That means staying relevant and well positioned “to provide their products and services to that audience at the right time, increasingly through digital experiences.”
The New Main Street
Location means everything in today’s banking environment. Said Kirby, “In the traditional credit union model, you focused on physical real estate to find audiences. So, you put your best branch on the corner of Main Street downtown because that is where you source new members. Essentially what we are doing is we are acquiring the digital ‘Main Street,’ which is in Way.com, Bankrate, Zillow. We are taking credit union brands and presenting them within those environments.”
When searching for auto loans, for example, Kirby maintained the average non-credit union member does not traditionally Google a local credit union’s auto loan rate. “They are usually checking with web sites such as Autotrader, Vroom, Carvana, and Bankrate. One of the age-old issues with credit unions is they serve local communities, but they need a national, audience distribution to reach these younger consumers.”
Kirby added, “We’re essentially unionizing all of the credit unions to present a larger entity and then meeting consumers — whether they are members or not — where they actually are transacting business. Then providing them a preapproved credit offer for any type of loan they may need. Then bringing that loan, that new member, back into the credit union.”
Meeting Consumers Where They Are
Flynn said, “We definitely are seeing and hearing from not just credit unions, but banks and other lenders about wanting to meet consumers where they are. We want to make sure that if they come to us, that they have an offer waiting.”
So where is Union Credit meeting the consumer? “We are talking to all sorts of on online retailers around in the auto space as well OEMs (original equipment manufacturers). We are also looking at more traditional online marketplaces where consumers are already looking for credit opportunities,” said Buerger.
Buerger added, “It really is anywhere where a consumer may be seeking out credit.” Union Credit plans to present a financing with a spectrum of lending products. “We’re chasing down several paths simultaneously and all are bearing fruit right now, which is fantastic.”
How Does a Credit Union Get Into the Union Credit Loop?
Kirby suggested it is relatively easy for credit unions to become part of the Union Credit ecosphere. “They literally just opt in. This is not something where they need to have like a whole project administration and a project lifecycle.”
Kirby also noted if credit unions are already using CuneXus, for example, “All they are simply doing is publishing that asset, their rate sheets and so forth over to our platform. Then that presents them within our marketplace.”
Credit unions also have the ability to define what third parties (what publishers) they are presented in. So, if they want visibility in Bankrate but not Zillow, they have the ability to opt in or out. “But ultimately this model gives credit unions the reach they need to honestly offer the services that consumers truly need, especially in a rate rising environment,” suggested Kirby.
Giving and Getting Credit
An eligibility check in the Union Credit system determines which credit union presents an offer. “Every, consumer is cross-referenced for eligibility across our network of lenders. We identify what lenders can serve them, and then we generate the offers on behalf of those lenders using that lender’s unique underwriting pricing criteria,” said Buerger. “They get to use their own pricing criteria, underwriting criteria for creation of these offers, as well as presenting it with their own brand to consumers who are eligible to join their institution.”
“The beauty of our system versus what others are offering out in the market, these are firm offers of credit from the start,” emphasized Buerger. “They are preapproved offers, not prequalified offers, through this very unique, highly valued relationship with TransUnion.”
Buerger pointed out as a consumer enters into the Union Credit ecosystem, they are continually screening them through TransUnion. “These are opt-out, not opt-in offers. Meaning we can offer them a firm offer of credit. They are preapproved, based in that methodology, but it is updated, to the kind of digital world that we are in.”
Kirby added, “The credit unions are taking over from there. We want the consumer to have that recognition experience with that credit union, which includes the document preparation, the funding process that is handled by the credit union.”
Flynn said, “For credit unions in particular, they are always trying to stay relevant and stay competitive in a very competitive and an ever-changing market. One way to do that is through some of the unique capabilities that the folks at Union Credit are bringing to market. Another way that we have found at TransUnion is for credit unions to make sure they are using the right tools. Through this partnership with Union Credit, we are really enabling credit unions to hypertarget and deliver very personalized offers, very relevant offers to consumers as opposed to painting with a very broad brush.”