Bank of America discontinued its indirect retail lending through marine dealers earlier this week, but will continue to offer direct consumer financing on marine products through its online e-lending channel at bankofamerica.com.
"We remain committed to the industry and continue to offer wholesale, or floorplan, financing to marine dealers," Bank of America spokesman Jefferson George said in an e-mail to Soundings Trade Only. "In addition, the above change does not affect our origination process for auto and RV dealers."
But despite the bank's assurance of its commitment to the marine industry, some dealers say they will be hurt by the move.
"It's devastating. It continues to shrink the available markets for consumer lending," said Larry Russo Sr., of Russo Marine. "As the largest boat dealer in New England, we're down to two sources. A couple of years ago, we had a dozen retail sources for our customers; we're down to two. Ouch. And Bank of America was getting half of our business."
Though the dealership may continue to process loans through a third-party broker, Russo said Bank of America's decision just adds another layer to the loan process for consumers and makes it more complicated.
"That really hurts because we're the one on the street, face-to-face with the customer, and a lot of boat dealers have enough volume to earn a dealer-direct relationship and not have to push the customer through a third-party broker," Russo said. "It just layers the process. It makes it more difficult for us and it certainly reduces our profitability because now we have to share it with a broker."
Phil Keeter, president of the Marine Retailers Association of America, said it's just another obstacle dealers have to face at a time when they don't need any more challenges to doing business.
"It seems like whenever we open one door a little bit, another one slams behind us," he said.
Bank of America, Keeter said, is a large funding source for consumer loans, possibly accounting for 20 to 25 percent of the nationwide total.
But not all dealers are adversely affected by the changes.
Darren Plymale, from Galati Yacht Sales, says his dealership lends for Bank of America on a direct and indirect basis, so it's one of a handful that won't be hurt by the changes.
"We're one of the few dealerships that have that ability. I'm probably one of maybe five dealers in the country that will not be affected," he said. "Anytime you have an indirect lender that is exiting the industry it's always a concern, but I understand their reasons. They're trying to curb their losses."
— Beth Rosenberg