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CUDL works to minimize dealers closing impact on CUs
ONTARIO, Calif. (5/19/09)--CUDL, a point-of-sale and indirect auto lending network for credit unions, is working to minimize the impact that the closing of many Chrysler dealerships nationwide will have on credit unions. On Thursday, Chrysler announced that it would close 789 of its dealerships by June 9. “The most obvious shift is where some credit union members will be going to purchase vehicles,” said Joe Greenwald, CUDL vice president of marketing and communications. “However, members still need transportation and will be looking to their credit unions for help in financing vehicles.” CUDL’s 10 regional business units are working with their credit unions to provide strategies and steps to mitigate any negative impact from the closings. About 10-12 credit unions have contacted CUDL about the closings, Greenwald said. CUDL also is monitoring General Motors (GM) announcements for closures. “We are awaiting further details from GM before we finalize strategies or make any further recommendations to our credit unions,” Greenwald said. He noted that the present timetable for GM dealership closures indicates they may take place over a “longer-term horizon” but said things could change. “The general points of action that we recommended to our credit unions for the Chrysler closures should certainly be taken into consideration and applied by credit unions for any dealership that closes,” he added. CUDL recommends that credit unions:
* Identify the number of open titles outstanding with that dealership and work to expedite the perfection of those titles; * Understand the broad picture for the dealership, most specifically whether or not that dealership has other franchises under one roof; * Consider prior history with that dealership and dealer owner/principal; * Ensure that any loan packages have the required documentation prior to funding; * Understand the source of extended service contracts because responsibility and location of service may vary among manufacturer warranties, manufacturer-backed extended service contracts and extended service contracts issued by other third parties; and * Determine if they wish to continue businesses with dealerships that could convert to independent dealerships after their franchise closes.
Credit unions need to continue strong risk management practices, CUDL said. “By following prudent lending policies, credit unions will remain well-positioned to help their members finance the vehicles that enable them to get to work, school, and the many places their lives take them,” Greenwald said.
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