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Repos fewer car loans sign of the times
TUMWATER, Wash. (7/27/09)--Credit unions in Washington experiencing a decline in auto loans and an uptick in repossessed vehicles are attributing the trend to the recession and the slow economy. In addition to increasing bad car loans, total credit union car loans are down statewide, David Bennett, director of public relations for the Washington Credit Union League, told local newspapers (The Olympian via The News Tribune.com July 24). Washington credit unions' car loans peaked at more than $7 billion in 2007, but they dropped to $6.8 billion in 2008. They were at $6.7 billion through early March, the league said. Two Washington credit unions described their experiences. At $124 million asset O Bee CU, President/CEO Bruce Cramer noted some borrowers are voluntarily returning their cars to the Tumwater-based credit union because they can't make the payments. In a stronger economy, O Bee CU typically repossessed eight to 12 cars a year. Year to date, repossessions total 37, a small percentage of the 2,600 car loans the credit union makes each year. Of the 37 repossessions, 12 were voluntarily returned. O'Bee CU said that when a vehicle is returned, it first tries to sell the car, hoping to recover 60% to 80% of the loan. If it doesn't sell or get at least three bids, the credit union sends the vehicle to an auction company. Before selling a car, though, O Bee CU makes every effort to assist the borrower in restructuring the loan or the payment, Dave Echtle, vice president of lending, told the newspaper. To deal with 16 repossessed vehicles, Washington State Employees CU, a $1.4 billion asset credit union in Olympia, has scheduled a sale for car dealers in August. Year to date, Washington State Employees CU has repossessed 526 vehicles, compared with 700 in 2008. Of the 526 vehicles, 97 were returned voluntarily. That compares with 182 voluntary repossessions for the entire year in 2008, Ann Flannigan, spokeswoman, told the newspaper. She noted that voluntary returns are down this year so far because the credit union is working more closely with borrowers to help them keep their car.
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