Credit unions have helped jump-start car sales by funding consumer loans when the domestic automakers' finance companies were short of cash.
Now initiatives are afoot that could allow credit unions to provide inventory financing to new-car dealers too.
Many lenders that are skittish about auto sales are yanking dealers' credit lines for wholesale inventory financing, or floorplans. Those dealerships soon go out of business if they fail to line up another lender quickly.
Some credit unions view the floorplan crisis as an opportunity to expand their automotive finance portfolios so they are seeking ways to meet dealers' commercial lending needs.
"Every dealer is a part of our Main Street business communities," says Henry Wirz, CEO of SAFE Credit Union, a large institution serving the four-county Sacramento, Calif., area. "We want to keep them in the community. Support for them is critical."
Sid DeBoer, CEO of Lithia Motors Inc., works extensively with credit unions to provide retail financing for customers. An expansion into floorplan financing "would be terrific," says DeBoer, whose public dealership group is based in Medford, Ore.