#4105: How PenFed Converts Declined Credit Applications into Ongoing Revenue Streams...

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RAI Partners’ Co-Founder and Chief Growth Officer Brian Scott and PenFed’s Senior Vice President, Consumer Chief Lending Officer Sumeet Bhalla stopped by the show to discuss how PenFed is working with RAI Partners with its Acceptance Program to convert declined credit applications into ongoing revenue streams for the credit union.

In particular, Brian and Sumeet talked about their acceptance program providing a second look at these applications, significantly boosting approval rates. This initiative aims to retain members and enhance loyalty, particularly among younger demographics, while also exploring future growth in credit offerings.

Q&A summary...
What is the main goal of the partnership between PenFed and RAI Partners?
The partnership aims to convert declined credit union applications into ongoing revenue streams, helping credit unions serve more members, especially those who might otherwise be turned away.
How does the acceptance program work for PenFed members?
When a member's application is declined, it is sent to RAI Partners for a second look. If approved, the member can stay within the credit union family, which is beneficial for both the member and the credit union.
What unique features does the acceptance program offer to credit unions?
The program allows credit unions to maintain their brand on the cards issued, offers options for co-branding, and integrates seamlessly into their digital banking systems.
What has been the approval rate for applications sent to RAI Partners since launching the program?
The approval rate has been around 75 to 80%, which is considered a strong performance for the program.
What future developments are RAI Partners considering for their services?
RAI Partners is looking into options like acquiring portions of credit portfolios and creating affinity programs to serve specific groups, such as schools and universities.
How does the acceptance program enhance member loyalty for credit unions?
By offering credit cards, even indirectly, credit unions can build stronger relationships with members, leading to increased engagement and loyalty compared to traditional auto lending.

Check it out and let us know your thoughts. And be sure to watch the entire episode below for all the details.