ONTARIO, Calif. — Despite two of the Big 3 automakers having filed for bankruptcy, Credit Union Direct Lending predicts that CU auto loan volume will remain level for the rest of the year and increase significantly in 2010.
"There is pent-up demand," explained CUDL President and CEO Tony Boutelle. "Right now consumers are not buying on ego. They are buying based on their transportation needs. But there are also a lot of people who are sitting on the fence, and I think we will see that demand in 2010. Ford has indicated that they are ramping up production in the third and fourth quarters."
So far this year, Boutelle said CUDL is not seeing a huge effect thus far from the carmaker bankruptcy filings. "In fact, in the first quarter we saw a 10% increase in auto loans in our system versus the same time last year."
What lies immediately ahead, according to Boutelle, is the challenge of finding ways to help credit unions navigate through potential risk issues with all the GM and Chrysler dealer closings. CUDL is counseling CUs not only on what to do with dealerships that are slated to go out of business, but how to detect signs of a dealer that may be in trouble, and to take appropriate risk management steps to protect the titles the CU has with those dealers.
"There is a big push in our company to get our credit unions information on how to mitigate risk," Boutelle said. "They have to be really careful with dealers that may be going out of business, making sure a situation does not occur where a dealer closes its doors and the credit union does not have its titles perfected."
