Group is lobbying to make boat loans easier by extending relief to non-bank marine lenders
Amid a recession and tightening credit, the National Marine Manufacturers Association is working with Congress to help lenders who specialize in recreational industries such as boating.
The association is not seeking actual bailout dollars for boating’s small businesses but assistance to lenders to free up credit so consumers can buy boats again.
“So far, they are only providing money to banks, and what we are suggesting is there are lot of non-bank finance sources that are very important in consumer finance, especially in the recreational industry,” says NMMA president Thom Dammrich.
The NMMA is taking a three-part approach, he says.
“First, we’re trying to get the attention of the Treasury Department to make sure that whatever action they take to ease credit will ease all forms of consumer credit, not just car loans or student loans or credit cards, but boat loans and RV loans and snowmobile loans, [and] that the assistance they provide on the consumer side should be universal, not just to one industry,” Dammrich says.
Second, if there’s going to be another stimulus package, some of those dollars should go to aid small business, Dammrich says.
“We’re working with a large coalition of organizations that represent small business,” Dammrich says.
“It’s not just the NMMA, though the NMMA is taking a leadership role.”
Third, the NMMA is looking to add water-based infrastructure projects such as dredging or adding marina ramps to any stimulus packages, according to Dammrich.
The Department of Treasury is just one avenue the NMMA is exploring as it looks for help, says Mathew Dunn, a lobbyist working on Capitol Hill for the NMMA.
“The flow of credit to the small business community and consumers is in fairly bad shape,” Dunn says. “The spigot is not off, but it is dripping, if you will.”
Because Congress has mandated that the Treasury Department distribute rescue dollars in an effort to free up credit, the NMMA is asking that the department expand the distribution of capital to include non-bank financial institutions and specialty lenders that provide retail and floorplan financing, as well as financing for other recreational industries, Dunn says.
Because the bailout money was initially used for giants such as AIG, lenders in specialty niches, such as boats and recreational vehicles, were left out, Dunn says.
“As consumers buy less product, the cash flow toward retailers is less, the balance sheets are problematic and, at the same time, lenders are having cash-flow problems and are increasing requirements to do this commercial lending, which is kind of essential to running a business in the U.S.,” Dunn says.
In early December, discussions were still in the preliminary stages, but the NMMA was posting letters to various lawmakers in an effort to get them on board.
40 percent decline
A Nov. 12 letter to Treasury Secretary Henry Paulson, signed by Dammrich, said the “financial landscape is having a severe impact on the American recreational marine industry,” and cited a 26 percent industry-wide decline in 2008 and a 40 percent overall decline since the onset of the housing crisis.
“As you continue your efforts to stabilize financial institutions, we wish to draw attention to our growing concern that the resources made available through the Troubled Asset Relief Program (TARP) are not reaching critical sectors of the financial industry with sufficient pace,” the letter to Paulson said. “The boating industry is uniquely vulnerable to volatile credit markets and illiquidity, as financing for marine dealers is limited to a handful of specialty financial lending institutions.”
With KeyBank, Citizens Bank and Wachovia all pulling out of commercial marine lending last year, the letter urged the Treasury Department to “purchase assets of non-bank financial institutions, and inject these firms with available capital to increase the flow of credit.”
Letters were also sent to members of Congress, including House Speaker Nancy Pelosi and members of the Senate Finance Committee, asking for help, including job retention tax credits, expanding unemployment benefits to those whose days are cut from five to four and investing in marine infrastructure.
A hunt for ‘champions’
NMMA lobbyists are also meeting with members of Congress, but didn’t want to say which ones.
“Everything is so preliminary at this point,” Dammrich says. “We’re looking for our champions, and I don’t think we’re in a position to tell you who those champions are yet ... since there is no specific piece of legislation that’s been introduced that has broad support.
“People on Capitol Hill are still trying to figure out what the best approaches will be and what they want to champion,” Dammrich says. “It’s premature for us to comment because members of Congress haven’t yet commented.”
In the meantime, the NMMA is putting together estimates of how many jobs have been lost in the marine industry. While they haven’t made any final projections yet, Dammrich says the numbers will be “significant.”
“There’s a lot of work going on that we can’t discuss publicly because the conversations haven’t jelled into specific commitments,” Dammrich says.
He is hopeful the work will pay off for the boating industry.
“We are doing our absolute best to try to find some avenue of relief or assistance for the recreational boating industry, and we do recognize that getting the consumer buying again is the ultimate answer,” Dammrich says.
Copies of the NMMA’s letters are available at www.nmma.org/government/federal.
This article originally appeared in the January 2009 issue.