While some dealers say the departure of National City Corp. from the marine lending business won't hurt them directly, others say the loss of another lender could ultimately hurt the consumer.
National City, in a letter dated May 23, announced it would no longer offer indirect retail marine and RV loans through its dealer and service clients as of May 25. The lender said it would process all approvals issued by that time through the close of business June 23.
The real concern, according to Ed Lofgren, owner of 3A Marine Service in South Hingham, Mass., is the loss of competition among banks, which doesn't bode well for consumers.
"Any time we lose a vendor like that, it's not a good thing for the industry," said Lofgren. "I hate to see just one person left standing."
Mike McLenighan, manager of Minnetonka Marine in Minnesota, was surprised to hear National City was leaving the business, but said he didn't think it would hurt his dealership.
"I don't think it really greatly affects us," said McLenighan. "We liked working with them because of the representative that we had, good personalized service. They weren't our primary lender. It's not going to blow us out of the water so to speak."
Sonny Lodder, owner of Lodders Marine near Cincinnati, has not done business with National City for years, but he can relate to other dealers who are faced with finding a new lender. Lodder, who has been in the marine business for 40 years, said several lenders through the years have withdrawn from marine lending.
"Banks are up and down like yo-yos," said Lodder, who recently switched lenders after his bank for the past decade also pulled out of marine lending.
Lodder says bank CEOs are typically not familiar with boating, and therefore are more likely to cut marine lending divisions when changes are to be made. Changes also are often made when banks hire a new CEO, he said.
"Over the years, banks get in and they get out," said Jack White, sales manager at 3A Marine. "It depends on how competitive they were and what markets they're strong in."
Cleveland-based National City had been one of the top lenders in the marine industry, with more than 50 years' experience in the marine and RV field. Its dealer finance area provided a wide variety of financial services for marine and RV dealers, including floorplan financing and retail financing, according to the company's Web site.
The company operates primarily in Ohio, Indiana, Illinois, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally.
In 2005 the bank reported revenue of $8.03 billion, down from $8.9 billion in 2004. Last year's profits of $1.98 billion were down from $2.78 billion the previous year. Diluted earnings per share in 2005 fell to $3.09 from $4.31 in 2004. The financial results for 2004 include a pre-tax gain of $714 million from the company's sale of National Processing.