Rep. Joe Donnelly, D-Ind., whose district includes part of RV industry hub Elkhart County, hailed the emergency federal actions on Tuesday (Feb. 10) to ease the nation’s credit crunch as a big step forward for the beleaguered RV industry.
The Treasury Department and Federal Reserve moved to commit large sums of money to help thaw credit markets and slow layoffs that have left 3.6 million Americans unemployed, according to the Associated Press.
Treasury Secretary Timothy Geithner outlined how the Obama administration would spend the remaining $350 billion of the $700 billion bank bailout program started last fall under President Bush. He also announced a new public-private partnership to help strengthen banks.
Then, in a related government commitment of financial support, the Federal Reserve broadened a program designed to boost resources for consumer credit and small business loans – upping it from $200 billion to up to $1 trillion.
Both consumer lending and wholesale floorplanning for RVs are included in the fed’s plan. “We’re very hopeful that will significantly loosen up the credit markets,” Donnelly told RVBusiness.
RV loans were included in the final terms of the Term Asset-Backed Securities Loan Facility (TALF), which was established in November. The TALF program purchases asset-backed securities from financial institutions, to free up banks to make loans more readily available to small businesses and consumers. Donnelly and Rep. Mark Souder, R-Ind., encouraged the Fed to take such action last year. The lawmakers believe the program will make it easier for RV dealers to receive floorplan loans to purchase inventory and for consumers who want to buy RVs.
When proposed in November, the TALF program only applied to auto, student, credit card and small business loans. Donnelly praised the action and said it is the first step toward increasing the flow of credit and returning the RV industry to profitability.
The government hopes that getting the private market for bundled loans humming again will unlock credit in the rest of the economy.
The latest government bailout actions came following President Obama’s historic visit to Elkhart, Ind., on Monday.
Donnelly flew to Indiana on Air Force One with the president and was with a group of government leaders that spent an hour on the plane with Obama discussing the economy.
“A huge portion of that discussion was about the health of the RV industry and credit,” Donnelly said.
Donnelly said he told Obama that the people of Elkhart County want to work and “build the best products in the world. We love our families, we love our country, but we just want a chance.”
Donnelly also supports the president’s stimulus package designed to put millions of Americans back to work.
“The trip for me,” Donnelly said, “was about jobs No. 1, jobs No. 2 and jobs No. 3. Obviously, if our jobs are increasing, our companies are doing well.”
Obama had visited Elkhart County twice during his campaign. “He was genuinely excited to be going back,” Donnelly said.
Minutes after the president finished speaking to a crowd of 2,000 in Elkhart, Donnelly told RVBusiness, “Take this back to the RV industry, he gets it.”
On the flight back to Washington, D.C., Obama spent much of his time preparing for his first press conference as president that unfolded on national TV hours later. But, Donnelly said, “He came back for five minutes to say hello and say how much he appreciated being back in Indiana.”