Think Outside The Car

For many credit unions, financing recreational vehicles is a powerful way to shift loan portfolios into overdrive.


The best lenders don’t just mimic the competition — they adapt to the unique challenges and opportunities in their own marketplace. If you’re situated near an outdoor Mecca where alternative modes of transportation are a way of life or in a growing regional economy where members can afford to spend money to enhance their lifestyle, financing other vehicles besides cars and trucks is probably already a central component of your loan strategy.

But even for cooperatives that don’t fall into these special categories, a modest investment in recreational vehicle lending and dealer relationships can enhance traditional auto strategies or supplement volume during a slowdown.

Shipments of towable RVs and motor homes were up 14.6% and 27.3% respectively year over year in 2012, according to the Recreation Vehicle Industry Association. Motorcycle sales were up 2.6% last year, according to the Motorcycle Industry Council.

The three credit unions profiled below all have a significant lending advantage versus their comparable piers, achieving auto loan penetration rates ranging from 5% to 26 % above normal levels for their assets size. This success is due at least in part to an emphasis on recreational vehicle lending.

The Right Membership

“Our current portfolio is 19% recreational vehicles including boats, ATVs, motorcycles, utility vehicles, and campers,” says Linda Bodie, CEO of Element Federal Credit Union ($26.6M, Charleston, WV).  

“These types of loans are very important to our lending strategy and have helped us meet our goals without adding substantial risk to our portfolio,” she says.

Although some of these products could be considered a niche for other institutions to fill, Element saw the potential in the region and proactively addressed this need in a way that disconnected, large-scale national competitors couldn’t.

© Callahan & Associates |


Generated by Callahan & Associates' Peer-to-Peer Software.

“West Virginia certainly lives up to it's motto of wild and wonderful,” Bodie says. “We are a very outdoors kind of place, and people use these vehicles for work and play.”

In a competitive market, recreational vehicle loans provided the extra boost that Element needed to achieve roughly 1.6% growth in used autos and a whopping 16.63% growth in new auto loans in 4Q 2012, according to Callahan & Associates’ Peer-To-Peer Software.

The Right Partnerships

Element’s new indirect lending strategy drives much of its success with recreational vehicle lending. Currently, the credit union partners with seven area dealerships that sell every kind of vehicle imaginable, from standard new and used autos to ATVs, RVs, and even boats.

© Callahan & Associates |


Generated by Callahan & Associates' Peer-to-Peer Software.

“Our members always know they can come back to us for an auto loan, but for the most part we’re focusing on offering our services to dealerships,” says Emily Chandler, lending manager for the credit union.  

One of the most important practices gleaned from this process is that dealers  — much like the credit union’s members — all have their own unique set of needs and expectations for service and accessibility.

 “We encourage dealers to text, Skype, or email us to stay in constant contact,” Chandler says. “We’re out there working right along with them.”

Going the extra mile in a business-to-business environment creates relationships that really last, for both the businesses and their customers.

“I was working with a boat dealer recently. He had a gentleman who couldn’t get approved for a loan so he called me,” says Miranda Nabers, loan officer and member services representative for Element. “I went ahead and processed the application, and the guy had great credit. He just had some student loans that he was paying on, but it was enough that nobody else was going to touch him. So I told the dealer, ‘Hey, we got this.’” 

The Right Timing

For some credit unions, shifting economic circumstances can be a cue to refocus or double down on recreational vehicle sales. In a region populated primarily by either high-earning federal government workers or employees in the booming oil industry, WesTex Community Credit Union ($52M, Kermit, TX) has experienced a steady demand for high-end consumer goods from its membership.

“When we have sustained good times, members start buying toys more and more,” says CEO Devora Mitchell. “Whether it’s boats, ATVs, or motorcycles, these toys are what members want.”

Although WesTex’s new auto loan balances dipped 2.95% in 4Q 2012, loan balances for used cars were up 14.4% during the same period.

At other credit unions, the booms are more seasonal. Spokane Teachers Credit Union ($1.7B, Spokane, WA) has seen its loan portfolio grow 12.2% for used cars and an incredible 76.2% for new cars as of 4Q 2012. 

© Callahan & Associates |


Generated by Callahan & Associates' Peer-to-Peer Software.

“RVs showed some surprising growth in 2012, and that category is expected to continue in 2013 as the weather begins to warm up,” says Bill Before, STCU’s chief financial officer.

Whether members are out to cast off the cabin fever brought on by a long winter, are preparing for the start of the hunting and fishing season, or are simply out to enjoy the fruits of a ripening local economy, success with these types of loans is often all about timing.

As marketing dollars remain tight, credit unions should schedule their biggest sales, incentives, and dealer pushes to coincide with prime buying seasons in their own specialized regions.