Innovation In Lending

Coastal Federal Credit Union: How To Keep A Growth Machine Humming

Bruce Upbin
November 24, 2021

David Jacobs is a loan growth guru, someone very much worth listening to at a time when every credit union is eager to accelerate its lending to keep up with surging deposits. As VP of consumer lending at Coastal Federal Credit Union in Raleigh, NC, David has generated 18% loan growth every year since 2017 while racking up all sorts of “best places to work” awards. Coastal also plans to double in size over the next five years. How do they do it?

We sat down with David for our latest episode of Zest’s Leaders In Lending series. He's a 28-year veteran in financial services (Wachovia, Sovereign Bank, Coastal for 12) who began his career due to his love of cars, especially fast ones. There was a job opening at a local bank in auto lending, so he took it.

A couple of decades later and David is still learning and investing in the future. One of his most recent investment decisions was to adopt Zest AI software to bring AI-driven lending to its auto loan business. Some lenders view AI as too complicated, but not David. Once he found the right partner, especially one who is already integrated with Coastal’s loan operating system, the decision was easy.

“The Zest team has been great at helping get everything set up. Not only doing it but telling us the reason why and providing the documentation that will allow us to show auditors what’s going on behind every score,” says David.

Coastal will be using AI to approve more auto loan applicants, especially those new to the credit union or current members that it may have denied in the past. That includes a good portion of folks in low-income areas, where Coastal does nearly 40% of its auto lending. “You only know what you know. We never know of the members we declined and how they performed. So we were able to pull that swap-set through Zest to give us an idea of which of those people could repay.”

Watch the entire episode to hear more on:

  • How Coastal plans to double its lending volume in five years
  • Automation and using AI bots to eliminate menial tasks
  • How to keep a team innovating
  • The importance of financial education
  • Indirect auto strategies
  • Growing safely down the credit spectrum

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