LANSING, Mich. — Credit union auto loan portfolios may benefit — in the long run — from the shuttering of car dealerships by Chrysler and GM.
But in the short term credit unions may have to scramble to build new indirect lending partnerships, which in turn could be complicated by other FOM-related issues, according to several analysts.
Chrysler announced that it will close 789 of its dealerships by June 9. GM has not disclosed its plans, but sources informed Credit Union Journal that GM closings are targeted for October 2009.
"In some cases the credit union may have had a good relationship with a Chrysler dealership nearby that is shutting down and not so great a relationship with one 20 miles away," observed Dave Adams, president and CEO of the Michigan league, which has championed the Invest in America lending initiative between credit unions, Chrysler and GM. "So they are probably having to do some scrambling to get repositioned."
Invest in America, a program that provides discounts on those brands to CU members nationally, may also help CUs reduce the affects from the closings, offered Adams. Invest in America was developed by league subsidiary CUcorp and has generated $1.6 billion in loans year to date.
