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Midwest CUs GM team up on 10 billion auto loan pilot
LANSING, Mich. (12/11/08)--General Motors Corp. (GM) and credit unions from four Midwestern states have teamed up to help credit union members obtain vehicles with a purchase price discount from GM. Credit unions from Michigan, Ohio, Indiana and Illinois also have pledged $10 billion in the “Invest in America” low-cost auto loans program to their more than 12 million members. The purpose of the six-month pilot program, which runs through June 30, 2009, is to assist both consumers and the auto industry in dealing with the nation’s economic stress and to help move America forward. “Credit unions have a long history of helping hard-working Americans in troubled times,” said Daniel A. Mica, president/CEO of the Credit Union National Association. “In this period of severe economic stress, we are pleased credit unions can be a part of a program that utilizes one of their primary services—auto loans—to make auto purchases more affordable for millions of consumers and, in the process, help energize our nation’s economy,” Mica noted. According to David Adams, Michigan Credit Union League president/CEO, “Roughly 1,295 credit unions in the four states account for $90 million in assets and $23 billion in liquid funds that are available for loans.” Credit unions are able to make the offer because they haven’t been hit as hard by subprime lending and problems with capital markets, “so we’re in a position to help,” he said. Adams and Mark LaNeve, GM vice president, North America Sales, Service and Marketing, announced the program in a press conference Wednesday. Invest in America will provide value to consumers who take advantage of a GM Supplier for Friends price discount program on purchases of eligible new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac cars and trucks. An additional $250 bonus cash is offered between now and Jan. 5 on their eligible purchase. Depending on the individual credit union, total incentives could run between 5% for just the dealer program to 10%-20% when combined with other offers. Michigan Gov. Jennifer M. Granholm praised the initiative. “The purchase of a new car is one of the most significant investments citizens make,” she said. “Providing them access to the funds they need not only helps them, but provides a much-needed boost to our domestic automakers and our struggling economy. I applaud Invest in America for investing in our citizens and our state,” Granholm added. LaNeve noted that the Michigan league and GM began talking about a partnership three or four months ago. The arrangement “creates a tremendous value for GM and for thousands of credit union members. We appreciate the credit unions’ promotional support and are pleased to make this offer. “As GM maps its future, one thing is clear,” LaNeve said. “Americans are resilient and willing to step in and show confidence in each other. This is a great example of that spirit.” He added that $10 billion could finance up to 400,000 to 500,000 vehicle loans in an average price range of $20,000-$30,000. Adams noted that many credit unions in the pilot serve occupational groups such as auto manufacturers’ and suppliers’ employees, and their members are affected by what is happening in the auto industry and economy. “It’s a gesture that the credit union movement wants to be helpful in moving America forward.” He also said credit unions are less affected by the credit crisis and have strong capital ratios and liquidity positions. Credit unions also typically offer better rates than banks. He cited an October Datatrac survey in which credit unions’ rates averaged 5.4% compared with 6.9% at banks. The program will be piloted in the four states, with the potential to go nationwide in early 2009. The discount is available to credit union members in the four states no matter where they choose to finance their vehicle purchase. CUcorp, a wholly owned subsidiary of the Michigan league, will coordinate the program with GM. CUcorp also is in talks with Chrysler and Ford Motor Co. For more details or to obtain an authorization number to take to any GM dealership, use the resource link.
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