“Credit unions, like any organization, can’t excel at every task internally due to resource and time constraints. If we can’t handle everything internally, we prioritize partnership and collaboration,” Silva added. 

Upstart stood out among the competition due to its ability to identify creditworthy borrowers that the traditional credit system overlooks. By leveraging Upstart’s AI and machine learning models to more accurately assess credit risk, AMOCO FCU would be enabled to reach and serve a broader and potentially more profitable customer base, which resonated with its leadership’s vision of staying at the forefront of the industry.

Upstart’s Referral Network also enabled an end-to-end digital experience for personal loans while delivering AMOCO FCU with a new, qualified member in the process. Qualified personal loan applicants on Upstart.com who meet AMOCO FCU’s field of membership requirements and credit parameters would automatically be matched with a personal loan from the credit union. Then, those applicants would seamlessly transition into an AMOCO-branded online experience from application through closing and same-day funding.

Setting and meeting program goals

AMOCO FCU collaborated closely with their Upstart account manager to set clear program goals, including volume targets, returns and acceptable loss thresholds. This collaborative approach allowed the credit union to align its strategy with Upstart’s capabilities and set key performance indicators (KPIs) to measure program success.

In order to ensure the partnership consistently aligns with the credit union’s member needs and strategy, Silva regularly reviews the economics of the program while also considering macroeconomic impacts on loans and credit quality. One year into its partnership with Upstart, AMOCO FCU has been meeting its personal loan growth objectives, and loss rates have outperformed expectations. Additionally, Upstart has generated hundreds of new members for AMOCO FCU a year into the partnership.2

Liquidity and balance sheet managements

Managing liquidity and the balance sheet during a high interest rate environment presented unique challenges, and Silva explained his approach:

Portfolio diversification

AMOCO FCU diversified its portfolio by shifting focus from auto loans with a moderate yield to unsecured loans and credit cards, which provided a higher yield. The credit union also capitalized on a strong local real estate market by focusing on first mortgages for new purchasers. This strategy aimed to create a more profitable balance sheet while also avoiding the more competitive auto lending landscape.

Operational efficiency

Partnering with Upstart allowed the credit union to generate loans they couldn’t originate in-house, enhancing their lending capacity. With the Upstart Referral Network, AMOCO FCU can attract new members via Upstart.com and provide an all digital personal lending experience so its team can focus on one-to-one member service. 

Looking to the future

Looking ahead, AMOCO FCU plans to continue achieving its strategic objectives more efficiently through fintech partnerships, and it aims to diversify its income streams by continuing to explore different loan products and partnerships. Collaborating with other credit unions also broadens leadership’s perspective and helps prepare for various scenarios—a strategy that has already allowed the credit union to navigate rate increases successfully and focus on personal loans and mortgages.