GM, Chrysler, Credit Unions Expand Loan Programs

By Bree Fowler

NEW YORK -- Automakers General Motors (GM Quote) and Chrysler, along with a group of credit unions, said Wednesday that they are expanding to all 50 states programs that offer low-cost loans and special pricing incentives to credit union members.

David Adams, president and chief executive of the Michigan Credit Union League and the national credit union group CUcorp, said the expansion of the "Invest in America" program is expected to give 90 million members of nearly 8,000 credit unions potential access to low-interest loans for GM and Chrysler vehicles.

Adams said that while there aren't any specific numbers yet, in the weeks since the original program began its Web site has received over 1.3 million hits and some of the larger credit unions in the affected states have reported increases in auto lending of 20% to 80% on an annualized basis.

Automakers and dealers have blamed last year's steep drop in sales partly on a lack of affordable financing for potential car buyers, which has compounded already weak consumer spending stemming from worries about job security and a weak overall economy.

With the expansion of the program, over $80 billion in credit is now available for auto loans through credit unions across the country, enough to finance the purchases of about 4 million vehicles, Adams said.

"I think it's safe to say that there's no better solution for the troubles that are facing the auto industry," Adams said.

Adams said his group also has been in "positive talks" with Ford (F Quote) about starting a similar program, but doesn't have anything to announce yet.