Rep. Joe Donnelly Talks TALF with RV Industry
Rep. Joe Donnelly, D-Ind., addressed RV industry leaders on the various efforts at the federal level to help stimulate the RV market during a March 11 conference prior to the day-long session of Recreation Vehicle Industry Association (RVIA) member seminars at the Century Center in South Bend, Ind.
According to a press release, Donnelly focused most of his comments on efforts to improve the credit squeeze facing RV consumers and dealers, recognizing that without adequate floorplan financing dealers cannot purchase new products from manufacturers.
RVIA said that Donnelly was the champion in Congress – along with Rep. Pete DeFazio, D-Ore., and Rep. Mark Souder, R-Ind. – for including RV consumer and floorplan loans in the Term Asset-Backed Securities Loan Facility (TALF) – a program to encourage lending by providing federal support for the origination and sale of new loans. Currently funded at $200 billion, the program could expand to as much as $1 trillion to address the shortage of money available for lending.
“TALF is expected to be very lucrative and profitable for lenders and investors with the Treasury Department backing up loans in a big way,” said Donnelly. “As the program rolls out this month, our hope is that it will open up credit markets and attract more dollars to the RV industry.”
He also reported on efforts to expand TALF eligibility beyond AAA-rated securities. In its present form, only asset-backed securities (ABS) carrying an AAA-rating by two rating agencies are eligible.
“We are talking to and educating the Federal Reserve Board about the problem that the AAA-rating presents for the RV industry,” Donnelly said. “Our focus in these conversations is to have RV floorplan loans covered even if they don’t meet the AAA threshold.”
In addition to his conversations with the Federal Reserve Board, Donnelly also offered to arrange a meeting or call between the Federal Reserve Board and RVIA so the association could press the industry’s case on this issue.