ORLANDO, FLa. — With so much news — at times, conflicting — coming out of Washington, there was no better place to be yesterday than in a room brimming with lenders and industry executives.
After President Barack Obama’s address about reviving the auto industry, which was streamed live into the conference hall, attendees at the Consumer Bankers Association’s Auto Finance Conference were buzzing. Some folks were encouraged by the President’s recognition of the import of our industry, while others objected to the ouster of GM CEO Rick Wagoner. Some contended that 30 days was not enough time for Chrysler to finalize a deal with Fiat, while others suggested that the short timeframe was indicative of an imminent deal.
Discussions bounced back and forth all day, but one theme recurred: What will happen to dealers and how will capital be restored to the floorplan business?
Lenders from banks nationwide have noticed increases in the number of dealers “out of trust” — those who sell vehicles without repaying their floorplan providers. And floorplan restrictions won’t lift anytime soon. Though floorplan loans are eligible for the government’s Term Asset-Backed Securities Loan Facility (TALF), the likelihood of a floorplan securitization is slim because of the requirement for a triple-A rating.
Mike Jackson, chairman and CEO of AutoNation, summed up the situation this way: “Our industry is going to go into cardiac arrest if we do everything else and don’t find a solution for floorplan.”
