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Seminar Examines Impact of TALF on RV Credit Market

RV finance and asset backed loan specialist Rob Snow of Capital Carillon led “TALF and the RV Industry,” a seminar outlining how the Term Asset-Backed Loan Facility (TALF) may affect credit markets and help the RV industry recover from the current economic challenges, in South Bend on March 11.  

This was the keynote session in a series of free member seminars hosted by RVIA. Snow, who has been a lender for 20 years, began his presentation by highlighting the credit crisis facing the nation, and in particular the RV industry, and explaining the government efforts to loosen the credit markets. Snow outlined the Troubled Asset Relief Program (TARP) and TALF and how these programs work.

Snow explained that, under TALF, the United States Treasury is providing $20 billion in credit protection to the Federal Reserve Bank of New York, which will then lend up to $200 billion to investors looking to purchase asset-backed securities (ABS) that are backed by the following loan collateral: RV, auto, motorcycle, credit cards, student loans and SBA loans, as well auto and RV floorplan facilities.

 

Through the effort, financial institutions will be encouraged to make RV floorplan and consumer loans because they can be assured a secondary market exists for those loans when securitized, Snow said. 

 

While remaining cautious about the immediate ability of government programs to free up credit, Snow was positive about the RV industry's ability to recruit new consumer lenders, and praised the stability of RV consumer loans. While consumer loans of all kinds are doing poorly in the current environment, Snow said, RV loans have performed “far better than most.” The key to free up consumer credit for the RV industry, he maintained, is to educate banks about RV loans and the strong demographic of RV borrowers.

“Traditionally, RV loans have been a very small part of the overall vehicle financing market,” Snow said.  “Because of this, banks do not understand or appreciate RV loans and borrowers. But in fact, now is not a bad time for banks to get into the RV lending business. Credit quality on new loans is pretty good - industry leaders need to push banks to come into the market.”

Snow played the “RV Financing: A Vehicle For Growth” video produced by RVIA and remarked that the video is a good way for the association, industry leaders and dealers to introduce RV loans to the banking community. The DVD provides an informative and positive look at the RV market and explains why financial institutions should consider including RVs in their lending portfolio.  To receive a DVD in the mail, contact Bill Baker at RVIA at bbaker@rvia.org or (703) 620-6003 ext. 331.

As part of the session, RVIA Vice President of Government Affairs Dianne Farrell discussed RVIA’s other efforts to help alleviate the impact of the economic crisis on the RV industry, outlining the association’s successes in securing a sales tax deduction for motorhome purchases in the American Recovery and Reinvestment Act, and extending the Net Operating Loss carryback period.

 

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