CHICAGO-Loans for recreational vehicles have remained strong for at least one CU, which is offering advice on making loans for RVs and other non-auto vehicles.
Mountain America CU-based in West Jordan, Utah-serves members throughout Utah, Idaho, Arizona, New Mexico and Nevada, an area of the country VP of Consumer Lending Jade Beckman described as "RV territory." Beckman said that the outdoorsy lifestyle that goes along with the mountain west makes RV lending a natural fit for the 381,000-member, $3.1-billion credit union.
Beckman said MACU has seen "massive growth" in RV lending in recent years, and double-digit growth during the last two or three years. While auto lending goes through peaks and valleys, RV lending has generally been a smoother road, he said.
Beckman spoke here recently as part of a panel on non-auto vehicle financing during CU Direct (CUDL)'s 2012 Lending Conference.
A typical Mountain America deal on RVs (or other non-auto vehicles) averages $28,000, with a 750 FICO score or above. Beckman said that 60-day delinquencies are at 0.75%, and the 12-month charge-off rate stands at 0.35%. While charge-offs are higher per occurrence-about $15,000 per loss, he said-this is MACU's best portfolio for charge-offs, even though individual losses are higher.
Beckman said that while turnaround time for RV loans is similar to turnaround time for traditional auto loans, there's significantly less pressure for speed when it comes to RV loans.
MACU has more than $250 million in RV loans-both direct and indirect-along with a portfolio of more than $800 million in direct and indirect auto lending. In 2011 MACU saw 6,031 applications for RV loans and booked 2,518 of them for a total of $71.9 million. The CU funds 86% of the RV loans it approves, said Beckman. "We get the deal when we're willing to do it."
