Florida Pilot Program

1
Florida Pilot Program

• Ford Purchase Pilot
• Ford/GM Leasing Pilot

2
Agenda

• Invest In America (IIA) Overview
• Mission/Vision
• Program Overview
• Results
• Florida Pilot Program
• IIA Lease Program
• Program Overview
• Lease Process
• Roles and Responsibilities
• Benefits
• Partner Opportunities
• Credit Union Leasing of America (CULA)
• GrooveCar
• Q A

3
Mission

• To develop and promote exclusive credit union
  member discounts on products and services offered
  by American owned corporations to provide a
  stimulus for stronger financial results for the
  U.S. economy, increase credit union membership
  and member satisfaction
• Develop an extensive program with domestic
  automakers that generates incremental vehicle
  purchases and credit union loans
• Identify and expand member rewards by partnering
  with larger Fortune 1000 companies

4
IIA Vision

• Invest in America is our brand for credit union
  membership enhancements in order to drive growth
  and retention

5
IIA Scorecard
Objective Metric Program to Date
40 League Participation 45
1000 Supporting Credit Unions 1,648
80 CU membership Opt-Ins 42.5
400 of Top 500 CU Opt-Ins 217
75,000 New CU Members TBD
300,000 CU Loans 81,648
360,000 Vehicle Sales 102,061

25 League Participation 21
600 Supporting Credit Unions 406
Automotive
Sprint
As of 5/15/09
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Chrysler

• Contract extension anticipated through year end
• May 6 June 1, 2009 Up to 1,000 discount on top
  of the members best deal on the following 2009
  models

500 Incentives Dodge Journey Dodge Grand Caravan Dodge Ram (1500/2500/3500/4500/5500) Dodge Dakota Chrysler Town and Country Jeep Grand Cherokee (inc. SRT8) Jeep Commander 1,000 Incentives Dodge Nitro Dodge Charger (inc. SRT8) Chrysler 300 300C (inc. SRT8) Chrysler Sebring Convertible Jeep Liberty
7
GM

• Supplier pricing continues through year end
• GM Total Confidence extended through May 31, 2009
• GM Private Offer (500 discount)
• April 1 May 31
• Credit Unions were required to enroll

8
GM Lease Pilot

• 90 Day Pilot Program
• Leasing Pilot in NY, NJ, FL and MI markets July 1
  through September 30, 2009
• Pilot will start with select 2009 models from the
  four core brands and expand as 2010 models are
  launched

2009 Models 2010 Models
Malibu Equinox
Traverse Terrain
Acadia LaCrosse
Enclave SRX
CTS
9
Ford

• 90 Day Pilot Program
• Purchase pilot program in Florida providing
  members with 500 discount on top of members
  best deal on the purchase of new Ford, Lincoln or
  Mercury vehicles
• Leasing pilot program in
• FL, NY, NJ and MI
• market areas

10
Sprint

• Member Discounts
• 10 off most regularly priced service plans
• Waived activation fee on new accounts
• Waived upgrade fees
• Business Discounts
• 15 discount on most corporate recurring charges
• Waived activation (new accounts) and upgrade fees
• Equipment discounts
• 20 off accessories

11
Florida Pilot Program

• Credit Union Member Purchase Offer
• 500 discount on Ford, Lincoln or Mercury
  vehicles on top of the members best deal.
• Credit Unions must enroll and agree to the
  following in order to offer this incentive
• Offer an interest rate 50 bps lower than the
  standard rate their member qualifies for on a 60
  month loan.
• Market the offer and IIA through website and
  lobby posters.
• Credit Union Member Lease Offer
• An attractive lease payment on a 39 month lease
  on Ford, Lincoln or Mercury vehicles.
• A subvention to offset residual risk of 750 per
  vehicle leased.

12
Leasing Pilot Overview

• Ford/GM is offering a Low Risk leasing program
  pilot
• Credit unions serving the FL, MI, NJ, NY
  Philadelphia markets will be eligible to
  participate (Markets defined by Ford/GM)
• July 1 September 30, 2009

What
Where
When
13
Leasing Pilot Overview (continued)

• Ford/GM and Lease Partner will fund a residual
  escrow account equal to 10 of ALG (Automotive
  Lease Guide) residual value to cover end of lease
  losses
• Lease Partner will obtain residual value
  insurance to cover losses exceeding 10 of the
  ALG residual value
• League and credit unions establish advertisable
  APR rate
• Credit unions promote to their members all
  leasing offers on eligible models
• Ford/GM will market lease payments to general
  public to increase dealership traffic
• Dealers will turn to participating credit unions
  for lease financing on all eligible models

How
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Lease Process - Origination

• Dealer directs current or potential member to
  participating credit unions via Route One,
  DealerTrac, AppTrac or other systems
• Credit Union makes credit decision, if necessary,
  sends Adverse Action letter to lessee
• Credit Union charges member the established
  acquisition fee
• Dealer prints lease agreement from their Dealer
  Management System (DMS) or Lease Partner web site
• Dealer closes the lease and processes the title
• Credit union charges dealer for manufacturers
  lease subvention as an administrative fee
• Dealer is reimbursed by Ford/GM for
  administrative fee
• Credit union forwards administrative fee and
  acquisition fee to lease partner
• Lease Partner deposits administrative fee along
  with Lease Partner contribution into escrow
  account

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Residual Value Escrow Account
Ford/GM Lease Partner deposit into escrow
account ( to 10 of ALG value)
RVI Lease Partner pays claims on losses exceeding
10 of ALG
Per each vehicle returned
If a gain is realized, the excess is deposited
into the Escrow Account ()
If a residual loss occurs, the Escrow Account is
used to cover loss (-)
Escrow account performance reviewed quarterly
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Who is the RVI Group?

• RVI Group is the worlds largest specialist in
  residual value insurance
• Specializing in the passenger vehicle, commercial
  real estate and commercial equipment markets
• Current clients include many of the worlds
  leading financial institutions, leasing companies
  and equipment manufacturers
• A.M. Best Company rating currently B
• Residual value insurance
• Protects against a decline in market value of
  tangible assets
• Provides a critical tool for asset risk and lease
  accounting

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Lease Process Life of Lease

• Credit union receives and posts payments to
  principle, interest and sales tax
• Credit union remits sales tax monthly to Lease
  Partner
• Lease Partner files sales tax reports and remits
  tax to government entities
• Credit union provides normal collections and
  repossession activities for non-payments

18
Lease Process Lease End

• Lease Partner manages member education at lease
  end and remarketing (vehicle disposition) process
• Member has first opportunity to purchase the
  vehicle
• Originating dealer has second opportunity to
  purchase the vehicle
• Vehicle sold through national network of dealers
• Credit union has no responsibility to dispose of
  returned vehicles
• Lease Partner sells the vehicle and uses the
  sales proceeds plus the Residual Escrow Account
  (If applicable) to pay off the ALG residual with
  the credit union.

19
CUcorp/Manufacturers Role

• Ford/GM will market the leasing program to
  consumers through TV, radio, print ads, etc.
• Ford/GM will promote an attractive lease offer on
  a 39 month lease on selected models
• CUcorp will develop turn key marketing materials
  for credit unions to use in marketing to their
  members
• CUcorp will solicit credit union participation
  and enrollment
• CUcorp will ensure Ford/GM dealer network in
  pilot market areas can be properly serviced by
  participating credit unions
• If adequate credit union participation is not
  reached in a market area the pilot will be
  cancelled for that market area

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Lease Partner Role

• Provides forms and documents that comply with
  Federal, State and NCUA requirements
• Provide accounting and remittance for Federal and
  State income tax
• Provide necessary insurance coverage (GAP,
  residual, contingent liability, contingent
  physical damage, garage, etc.)
• Provide training for credit union staff and
  dealerships

21
Lease Partner Role (continued)

• Provide all vehicle remarketing services
  including contacting and educating members on
  options, vehicle inspections and sales
• Third party vendor management with ALG, insurance
  companies, vehicle inspection services, auctions,
  lease tracking services, etc.
• Establish and manage government backed secured
  escrow account and provide Ford/GM RVI with
  quarterly accounting and reviews

22
Credit Union Role

• Determine credit criteria
• Decision each loan
• Rate setting use standard rate or reduce for
  competitive purposes
• Funding the dealer
• Billing and collecting payments
• Collect acquisition fee from member as
  established by Lease Partner
• Collect administrative fee from dealer
• Forward acquisition and administrative fees to
  Lease partner
• Collecting lease payments from the member during
  the lease term

23
Credit Union Requirements

• Enroll in and agree to program terms
• Complete enrollment form on www.lovemycreditunion.
  org
• Offer leases on all eligible models from Ford/GM
• Offer 39 month lease with advertised payment or
  lower
• Offer a lease rate that is not higher than any
  other lease rate offered to other manufacturers
• Collect acquisition and administrative fees and
  forward to Lease Partner
• Accept new qualified members through the
  dealership

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Benefits to Members and Credit Unions

• Member receives lower monthly payment than on a
  purchase
• Member is able to drive new car with latest
  features and safety equipment
• Lower cost of ownership since warrantees
  generally cover the lease period
• Credit unions will not be competing with captives
  and banks for lease business
• Credit union earns a higher rate of return than
  on auto loans
• Credit union assumes a credit risk that is
  similar to auto loans
• Ford/GM promotes to the general public providing
  opportunity for membership and auto loan growth
• Dealers will direct consumers to participating
  credit unions

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Similar Credit Risks as Auto Loans
Assumptions 30,000 loan amount, 5.99 APR, 7
sales tax, 12,000 Residual
60 Mo Loan 579.84
39 Mo Lease 572.17
Payment Balance Payment Balance
12 26,425.14 12 24,858.00
24 20,400.01 24 19,330.86
36 14.002.98 36 13,463.37
39 12,342.95 39 12,000.49
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Lower Payments for Members
MSRP 28,945 Factory Invoice 26,102 Cap Cost
27,897
27
Higher Return for You
MSRP 28,945 Factory Invoice 26,102 Cap Cost
27,897
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CULA (Credit Union Leasing of America)
Bringing proven performance, experience and
security to our credit unions
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Who is CULA?

• Credit Union Leasing of America (CULA) is the
  nations largest provider of indirect leasing
  services to credit unions.
• 21 years in business
• 65,000 vehicles leased exclusively through credit
  unions
• 2 billion
• 25,000 vehicles successfully remarketed
• Corporate office located in San Diego, California
• 19 employees with over 100 years combined leasing
  experience
• 1/3 of employees have been with CULA longer than
  10 years each
• Member of National Vehicle Leasing Association
• 3 employees with CVLE designations through the
  NVLA

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Who is CULA?

• Alliances
• Cary Boyden- legal counsel
• 35 years in lease industry
• Counsel for NVLA
• Paul Doyle- CPA
• 35 years in lease industry
• NVLA tax accounting counsel

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CULA Map
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CULA ROLE

• Lease Accounting
• Sales Tax Filings and Remittance
• Complete Document Packages Customized for your
  Credit Union
• Residuals
• Residual Risk Management
• Lessor - related Insurance
• GAP
• Residual Value Insurance
• CL/CPD (state minimums acceptable)
• Garage Keepers

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CULA Role

• Insurance Tracking Service
• Member Education at Lease End
• Remarketing Services
• Repossession Assistance Program
• NCUA State and Federal Program Compliance

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CULA Role

• End of Term Process Management
• Initial and On-going Staff Training
• Dealer Training
• Dealer and Member-friendly Website
• On-line Origination System
• New and Used Vehicle Leasing
• The Seamless Lease Connection

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The Seamless Lease Connection

• Proprietary Lease Management Software
• Internet Based
• Real time
• Complete lease portfolio management tool
• Validates lease at origination
• Provides reconciliation at lease end
• Manages sales tax changes, updating, reporting
  automatically
• Connectivity to core DP systems
• Connects to CULA Online Origination System
• Lease Validation Worksheet for funding ease
• Numerous ad hoc reporting features
• Archived images

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Roles
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The Credit Union Lease

• Simple Interest
• No Security Deposit
• No Prepayment Penalties
• Can Convert to a Loan at any Time
• Insurance State Minimums
• GAP is Included
• Numerous Options at Lease End
• 500/1,000 Wear and Tear Waiver

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CULA Remarketing Services

• Lease End Member Education
• 120- Day Brochure Inspection Template are sent
• 90 day- member education about lease end their
  vehicle specifically
• 60 day- order inspection and finalize lease end
  decision
• 30 day- review inspection results coordinate
  turn in at originating dealer (if applicable)
• Turn In
• Member- friendly process is coordinated through
  lease end consultants and third-party vendors
• CULA requests lease end fees prior to turn in
• Dispositions
• Member given first right of refusal
• Vehicle remarketed to originating dealer, or
• Vehicle remarketed to national network of
  dealers, or
• Vehicle sold at auction

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CULA Report Card

• 65, 488 total leases 7 complete lease cycles
• 52,088 leases with NO RESIDUAL loss
• CULA cash reserve
• Great American Policy
• 11,798 leases with minimal risk most CUs will
  have no loss
• RVI Group Policy A
• CULAs cash reserve
• 0 to 55 basis points estimated loss
• 1,602 leases with NO LOSS LIKELY
• RVI Group Policy B
• CULAs cash reserves

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Summary

• The Credit Union Lease opportunity mirrors your
  existing indirect lending product. You
• Set rates
• Underwrite
• Fund dealer
• Post payments
• Service member
• CULA manages all lease-related functions, so you
  do not have to add staff to add the lease product
• Risk is minimized through successful business
  practices
• Credit union rate setting and underwriting
• CULA residual risk management

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CULA (Credit Union Leasing of America)
Bringing proven performance, experience and
security to our credit unions
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CU XPRESS LEASE
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The Life of a Lease
Point of Sale
Servicing
Remarketing
Servicing Remarketing
(Fundamentals)
Full Service Leasing Product Specializing in all
three components
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The Life of a Lease
Point of Sale
Remarketing

• Relationship Management
• Accountability
• Motivating dealers
• Providing credit unions with a competitive edge
• Drive incremental business
• Provide key technology
• Protect the interests of credit unions and
  their members

• Maximize resale opportunities
• Wholesale/Retail Multi level approach
• Including national online retail sales
• Credit union is made whole
• Key nationwide strategic partnerships
• Allow credit unions to gain win through legacy
  loan program
• Manage portfolio growth
• Leverage technology and location

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The Right Experience

• Official Invest In America Partner
• 1 CU Automotive Buying Resource in the NY Metro
  Region
• A decade of experience working with the nations
  largest CUs
• Auto Dealer relationships throughout the nation
• Servicing over a million CU members throughout
  North East
• Provides complete indirect lending solution
• Our credit unions will fund nearly 500 million
  in 2009
• The nations 1 originator of new credit union
  leases

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Compete at the Highest Level

• Maximizing dealer cooperation through
  communication, training, and technology (Yours or
  ours)
• Keeping your credit union relevant in dealers
  daily business
• CU lease specials advertised in local
  print/electronic media
• Presence in dealer lease quoting systems (i.e.
  LeaseStar, LeaseProfit, RR, ADP, etc.)
• Offering off lease vehicles directly to your
  members first!

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Technology Support

• Works seamlessly with current credit union/dealer
  interface
• No Interface? Our plug play interface is ready
  to go
• Credit union dealer training
• Cross Selling program
• Credit union marketing essential for SEG based
  credit unions
• Member toll-free phone support

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GrooveCar Business Alliances
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Focused Expertise

• Industry leader in lease-end management
• Developed Mercedes Benz lease-end remarketing
  process
• Critical - High quality lease-end experience
• Adopted No-Surprises excess wear/tear program
• Primary/secondary remarketing vendor for billion
  lease portfolios
• Strategic partnerships with largest fleet leasing
  companies
• The nations 1 owner and servicer of new credit
  union leases

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Maximizing Resale at Every Level

• We utilize layers of resale opportunities before
  ever going to auction
• Fully engaged lessees will purchase their vehicle
  with CU support
• National online auto sales via GrooveCar with
  exclusive access
• CU Xpress Lease Vehicle Center 40,000 sq ft
  autoplex in NY
• Utilize GE Fleet largest seller of off-lease
  vehicles in the world
• Business alliance with ADESA nationwide
  transportation system

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Managing Value Risk is our Business

• Our capital investments indicate our commitment
  to success
• Wear-and-tear and mileage are part of Fusions
  value risk, not yours
• Credit Union partner is paid 100 of residual
  value, period.

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Leasing Success

• The nations 1 credit union leasing product
• Stable and successful long lasting credit union
  relationships
• Vast knowledge of credit union indirect lending
• Critical knowledge and expertise of your market
• Leadership with over 200 years of leasing
  experience
• 2 companies as experts in their field - offering
  1 dynamic product!
• References that will support every claim we make

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CU Xpress Lease The Next Generation in Auto
Leasing
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• Q A

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Florida Pilot Program

• Ford Purchase Pilot
• Ford/GM Leasing Pilot