CIT Group, a company involved in RV lending since the 1930s, abruptly stopped providing loans to retail buyers of RVs earlier this week.
CIT was acquired by electronic components manufacturer Tyco International Ltd. effective June 1, and on June 4, the company sent a letter to its RV dealer customers that reads as follows:
“After an extensive evaluation of our business, The CIT Specialty Finance Group has decided to discontinue the origination of recreational vehicle financing at the close of business on June 5, 2001,” wrote Ben Sergi, senior vice president of CIT Specialty Finance Group. “This difficult decision reflects our strategy to focus on building leadership positions in the manufactured housing and home equity businesses.”
As a result, CIT stopped accepting RV credit applications effective Wednesday (June 6). However, Sergi also wrote, “We will continue to fund existing recreational vehicle credit applications through June 29, 2001.”
CIT also will continue servicing its outstanding RV loans until its portfolio is liquidated as a result of RV buyers paying off their loans.
CIT was generally believed to be one of the five largest sources of loans to retail purchasers of RVs.
Also, it is believed that many RV dealers depended upon CIT as their sole source of loans for retail customers. Consequently, many dealers had to scramble this week to find new sources of loans for their customers.
Tyco executives did not return telephone calls.
CIT left the RV dealer inventory finance business last year.