MINNEAPOLIS — In a bit of good news for auto dealers, a majority of banks and credit unions surveyed recently by Wolters Kluwer Financial Services said the indirect lending will be vital to their growth in the next two years, though many still expressed a few concerns about the process.

In light of auto loans increasing popularity among some lenders following the mortgage crisis, Wolters Kluwer surveyed banks and lenders in September to get a feel for their plans for indirect activities in the future.

According to company's research, 53 percent of the 146 compliance officer and consumer lending officer respondents who were surveyed believed that indirect lending would prove to be crucial to their organization's growth over the next 24 months.

What's more, over 60 percent of credit union respondents expressed the same sentiment.

That said, it is important that lenders examine how they can manage growth as they expand into indirect lending, and this includes determining what risks are involved when working with third parties such as auto, marine and RV dealerships.

"Risk and fraud prevention are critical in helping avoid problematic vehicle loans that can hurt a lender in the future," explained Lee Domingue, chief executive officer of indirect lending at Wolters Kluwer Financial Services.

Among the top concerns that respondents identified regarding working with dealerships on indirect loans are the following:

—Incomplete loan documentation.

—Lower quality applicants.

—Dealers' compliance knowledge.

"Lending institutions — particularly credit unions — can see a benefit in expanding their presence in the indirect lending market," Domingue continued.

"However, this research shows dealerships that lenders, regardless of size or type of organization, really have the same concerns when it comes to financing vehicle loans," he added. "It's important for dealers to be proactive in addressing those concerns if they want to build and maintain strong lender relationships."