Consumer Portfolio Services, Inc. (CPSS) entered into a forward‑flow agreement with Valley Strong Credit Union that commits the credit union to an additional $900 million in annual auto‑finance origination volumes. The deal, announced on January 13 2026, began on December 12 2025 and will allow CPSS to serve borrowers across the full credit spectrum, including prime customers, through its AI‑enabled auto‑finance platform.
CPSS’s recent earnings report highlighted a challenging quarter: the company posted an earnings‑per‑share of $0.20 in Q3 2025, missing analyst expectations of $0.15 by $0.05. The miss was driven by a combination of higher servicing costs and a slower than expected uptake of its sub‑prime contracts, offsetting a modest 6.67% revenue growth over the prior twelve months. The new agreement is therefore a strategic counterbalance, providing a predictable revenue stream that can help smooth earnings volatility and support a 12% revenue growth forecast for fiscal 2025.
The partnership signals CPSS’s intent to broaden its market reach. By leveraging Valley Strong’s extensive branch network and member base—over 360,000 members and $4 billion in assets—CPSS can introduce its AI‑powered underwriting and servicing tools to a prime‑credit customer base that it has historically under‑served. This move is timely, as the auto‑finance industry is experiencing increased competition in the sub‑prime segment and a growing demand for prime‑rate products that offer lower risk and higher margins.
Valley Strong’s president, Nicholas Ambrosini, emphasized that the collaboration will enhance member experience by providing access to competitive auto‑financing options backed by advanced technology. The credit union’s leadership views the partnership as a way to differentiate its product suite and strengthen its position in a market where digital platforms are becoming essential for customer acquisition and retention.
Strategically, the $900 million commitment expands CPSS’s portfolio mix, reducing concentration risk in the sub‑prime segment and potentially improving overall portfolio quality. The AI‑enabled platform is expected to streamline underwriting, reduce servicing costs, and improve risk assessment, which could translate into higher net interest margins over time. However, CPSS will need to manage integration challenges and ensure that its technology can scale to meet the increased volume without compromising service quality.
Mike Lavin, CPSS’s President and COO, noted that the partnership “contributes to the growth in our origination volumes, allows us to move closer to our goal of being a full‑spectrum lender for our dealer partners, and expands our national footprint of our AI‑enabled platform.” The agreement aligns with CPSS’s broader strategy to diversify revenue streams and strengthen its competitive position in the evolving auto‑finance landscape.
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