Newsletters

DECEMBER, 2011

IN THIS ISSUE...

• A Message from the President
• 2011 Conference Wrap-Up
• BoatU.S. Foundation Receives $5,000 NMBA Donation
• U.S. Marshal Can Charge Sales Commission on Bank Credit Bids
• Agencies Issue Statement to Clarify Supervisory and Enforcement Responsibilities for Federal Consumer Financial Laws
• National Titling for Boats Update
• Statistics Corner

December 2011, President's Letter

Over the past four years our financial and economic climate has been one that you could sense, feel and perceive: one minute it would be a powerful thunderstorm with torrential rain, tornado force winds, and damaging flood waters, and then just when you thought the sun was starting to peak through the clouds, a hurricane would come out of nowhere, taking down your neighbors’ huge oak tree, and planting it in your yard! The boating industry has had a pretty rough go of it and it looks like this trend will continue into the first half of 2012.

The latter part of 2011 is seeing a tremendous shortage of job growth, falling consumer confidence, and slow GDP. This is due to many external factors including the Greek financial crisis, the US debt ceiling debate and failure of the “Super Committee” to come up with a plan for deficit reduction. That being said, the second half of 2012 is poised to perhaps see some upward momentum. Pent up demand may indeed spur sales in the retail sector and we may see purchases starting to rebound, albeit at a very low rate. We need to remind ourselves we are “America”, unlike any other country in the world. We have the American entrepreneurial spirit, and will rise up again and take back what we lost, we will dig in our heels and we will take the necessary steps to make things right again.

This is what the NMBA is planning to do in the first quarter of 2012. The Board of Directors and others will meet to discuss how we, as an association, need to identify the things we do well, discuss initiatives and programs that have worked in the past and how we can improve upon them, and determine what needs to be done to keep the association beneficial to our members. This strategic planning meeting will be moderated by an independent consultant and we expect to come away with a specific action plan for 2012 and beyond. Your input as a marine lending colleague is of vital importance to us as we ramp up for this meeting. Speak up and share your thoughts with us on what you would like to see your association become, and what changes you would like to see us make.   Contact me at 410-268-1545 or email Karen@sterlingacceptance.com. I would love to hear from you.

In the midst of this challenging stormy weather, the National Marine Bankers Association has steadily been focusing on ways to help improve lending for marine vessels. Our Annual Conference, recently held at the Westin La Cantera Resort in San Antonio, TX November 6-8, 2011, focused its agenda on education. Highlights from the conference include an update on the Dodd Frank Bill, financial fraud prevention, lending best practices, collateral evaluation, and our annual economic forecast roundup from Gina Martin Adams. Many thanks to Bill Otto and Jackie Forese who served as co-chairs of this year’s conference committee. Their many hours of long hard work surely paid off with a conference to remember. Of course, our annual gathering would never be as successful as it is without Mike Smith and Mike Bryant taking the charge with sponsorships and golf respectively. Thanks to all who attended and please provide us your feedback by completing the post conference survey that was sent out recently.

Please join me in welcoming our newest members to the association - Ken Landon of First Federal Lakewood, John Redmond of Community & Southern Bank and Craig Chamberlain of Mariners General Insurance.

Our Marine Lending Workshop is now scheduled for January 22-24, 2012 in Fort Lauderdale. This comprehensive 2-day program is a complete soup to nuts review of the marine lending business, and provides participants one-on-one time with instructors with many years of experience in the marine lending industry.

Also, lenders please look for our 4^th quarter statistical measure of the marine loan climate which will be emailed in early January. It is a quick and easy survey of the lending environment and we want to hear from each of you. Our goal is to obtain 100% participation! Please help us achieve this goal.

Finally, please give thought to how you can become engaged in your association. We need forward thinking ideas and recommendations, and participation is very personally rewarding. Please call me 410-268-1545 or email Karen@sterlingacceptance.com to find out what you can do.

Hope you had a blessed Thanksgiving and Happy Holidays.

Karen

2011 SAN ANTONIO CONFERENCE WRAP-UP

Marine Lending Saw Gains for Most of 2011

Marine lenders gathering for their Annual Conference described the past year as one of growing interest in loans with a moderate increase in bookings through the early fall boat show season followed by a stall in mid to late October. This slowdown was likely precipitated by the global financial crisis and a related decline in consumer confidence. Looking ahead, lenders see slow growth in both boat loan demand and funding, static borrower standards and terms, and interest rates continuing at historically low levels.

Held in San Antonio, November 6 to 8, the event marked its 32^nd anniversary and was attended by lenders and firms that provide services to the lending market. Remarketers offered that they see some decline in volume as new (or aged) boat inventory is largely worked off. Marine insurers said premium revenue had grown a bit on a steady book of clients. Marine surveyors and maritime attorneys had similar views suggesting the pre-owned market continued to be responsible for the core of their activity.

Reporting on the third quarter survey of members at the beginning of the Conference, National Marine Bankers Association President Karen Trostle of Sterling Acceptance Corp., said two-thirds of respondents indicated lending criteria (credit history, asset/net worth, debt ratio, income, collateral, and other lender requirements) has remained the same with the balance divided between saying it became more or less stringent. About half indicated dollar volume of loans booked in the 3^rd quarter was the same as the previous year, 22% said volume was up and 33% reported it being down. When asked about their outlook for 4^th quarter, 66% indicated they expect business to be the same or increase over the same period in 2010. Other responses indicate credit quality is largely the same or better and financing on new boat purchases remains well below 50% of loan volume booked in 3Q11. Fifty percent of respondents indicate their average loan amount is the same or higher than 2010.

Economist Says “Erratic” Scenario to Continue

Gina Martin Adams, an institutional equity strategist and retail sector specialist with Wells Fargo Securities and a regular speaker at the NMBA Conferences, underscored what the marine segment has been experiencing in her “Navigating the New Era of Thrift” presentation. Consumers can be expected to spend in fits and starts in coming quarters, with activity driven by, in order, employment, stocks, politics (taxes), credit, and gas and food prices. There is significant headwind to a robust recovery since not enough new jobs are being created, turmoil in stocks (based on European troubles) will continue, low confidence in lawmakers has a direct link to overall consumer confidence, and credit growth will remain slow because of unchanged lending standards.

Though federal economists don’t link gas and food to core inflation, these are “going through the roof” Adams says and notes consumers know their ability to spend directly hinges on these costs. This also erodes confidence related to long-term spending on boats, and other discretionary purchases.

Softness in housing, directly related to how people feel about their financial health and wealth, may not be resolved for another five years, Adams predicts. Average home prices continue to decline, down 5 to 8 percent this year. As such, there is no rush to buy, though increasing rents may move some to become homeowners. Until the bubble from overbuilding in housing is resolved, the other major drag on the economy will be a depressed construction jobs picture and growth in the many sectors that benefit from growing household formation. Construction jobs were a primary driver of the economic growth through 2008; lack of them is why this recovery has been so tepid.

Retail sectors seeing growth are non-store firms (e.g., Amazon), warehouse clubs, health and personal care food and beverage, and restaurants. On the decline side are furniture and home furnishings, appliances and electronics, department stores, and building material/garden stores, all influenced by the weak housing market.

Adams sees the above sector bright spots combining with meager job creation, consumer debt reduction which leads to some disposable income growth, and improvement in savings and net worth keeping the U.S. economy out of another recession in 2012. Long term, however, she cautions until the government deals realistically with deficit reduction – tied tightly to health care reform – the vitality of the overall U.S. economy remains in peril.

NMMA Chief Shares Ideas to Grow Boating

NMMA President Thom Dammrich painted a realistic and sobering view of where the boating market has been over the past decade yet expressed a hopeful scenario for future stabilization and growth based on the ability of diverse industry segments to work together, reach out to non-traditional customers, and leverage and promote the good things that come to people who spend time on the water.

Since 2006, new boat sales have declined 55 percent to approximately 140,000 annual units. Broken down, those new units represent just 17 percent of overall boating sales with the 83 percent balance coming from pre-owned transactions. Only 1 percent of boat sales are over 40-feet. Despite the contraction, boating is still a big business in the U.S. with $30 billion in revenue from all sources, wholesale shipments up in units and dollars this year, and an expectation of modest growth for the short term.

The average age of boats now in use is 21 years, leading Dammrich to suggest owners will need to decide if they will continue boating with something new or newer, since 25 years is the expected boat lifespan, or exit the lifestyle. He’s optimistic that many will choose to remain in boating, though perhaps downsizing due to age or affordability or changing to a different type of boat to accommodate a changing family scenario.

For the boating industry to experience recovery and new growth, Dammrich says it must continue to do a better job taking care of the customers it has with improved products and enhanced experiences. But it also needs to reach out to people who don’t see themselves on the water and children to become a next generation of participants. This can be accomplished by picturing growing ethnic groups and minorities in all promotional imagery and encouraging current boaters to invite non-boaters to try it out. Many of the resources to support these goals are integral with renewed funding of Grow Boating’s “Welcome to the Water” campaign. Dammrich encouraged the lenders and ancillary businesses to become part of the effort, pointing them to www.GrowBoating.org for details on how to get involved and access promotional materials, and showed highlights of the campaign over the past summer which can be viewed at _____________________.

NMMA is hosting a growth summit in December with about 200 industry leaders from all segments including the NMBA. Dammrich says the industry promotional campaign to bring more people into boating has been successful, but more needs to be done. “Passion for the water is contagious. Be a part of the movement,” he appealed to Conference participants. The NMBA will be represented by its president Karen Trostle, immediate past president Jim Coburn, and director Bill Otto.

Victim Became I.D. Theft Expert, Crusader

John Sileo told an engaged NMBA Conference audience how his identity was stolen out of his corporation and used to commit a series of crimes, including $300,000 worth of digital embezzlement. While the data thief (an “internal spy”) operated behind the safety of Sileo’s identity, he and his business were held legally and financially responsible for the felonies committed. Ultimately, the data breach destroyed his corporation and consumed two years of his life as he fought to stay out of jail. He chose to fight back and speak out.

After his crisis, Sileo became president of The Sileo Group which alerts and trains individuals on up to corporations how to anticipate and avoid exposure to identity theft and all forms of information exposure, adapt to a rapidly changing data landscape and gain better control. He has numerous corporate clients, appears on many national media outlets, and bills himself as America’s leading professional speaker on identity theft prevention.

Sileo explained the profitability of privacy. Sensitive data – whether personal or professional – is the most valuable asset inside an organization. And safe data is profitable data, whether it’s a client’s credit card number, a patient’s medical file, an employee’s benefit plan or sensitive intellectual capital. Early in his presentation, Sileo illustrated just how easy it is to steal sensitive information and personal identification details using volunteer’s business cases, wallets, smartphones, and laptops.

Identity theft prevention is not a one-time solution, Sileo cautions. Layers of privacy and security are accumulated over time. He covered numerous identity theft prevention tips in his presentation, the top three being:

- Trust Your Instincts. Most of prevention is common sense; if it sounds like a scam or looks like a phish, it probably is.

- When someone asks you to share private information, think – Hogwash! Anytime someone requests or has access to any of the names, numbers or attributes that make up identity, or to the paper, plastic, digital or human data where identity lives, the trigger should trip and sound an alarm in your head.

- Ask aggressive questions to spot a ConJOB: The primary tool for evaluating risk once your reflexes have been triggered is to interrogate the person or institution asking for your information. Interrogation is clear, aggressive questioning used to establish whom you can trust, how far you can trust them, and with what information.

 Sileo offers extensive information on protecting personal and corporate information on his website, www.sileo.com. Details about his new book, “Privacy Means Profit,” can be found at www.thinklikeaspy.com/store/privacy-means-profit.

Foiling Fraud – Marine & Otherwise - with the Feds

Osvaldo “Ozzie” Alaniz, Supervisory Special Agent for the FBI’s White Collar Crime program, enlightened conference attendees about the Bureau’s significant involvement in breaking and helping prosecute a burgeoning number of consumer fraud cases in the U.S. and offshore and reviewed recent marine cases that have accounted for tens of millions of dollars of losses to individuals and lenders.

Alaniz said to look ahead to anticipate where new fraud threats might emerge based on past outbreaks. For example, in 2008 cases involving mortgage fraud, appraisers and real estate attorneys took off. Since then, limited credit availability has escalated fraud related to small business bankruptcy, credit card misuse and check kiting. Other areas the FBI is seeing increases involve phony funds transfer and payment routines, commercial loan fraud, I.D. theft, and all forms of bogus consumer applications, especially those filled out on line. Threats flow from the U.S., but he said to be aware of those from Europe, Asia and Africa, whether or not business is conducted in these regions.

The FBI is there to help when fraud is suspected, though Alaniz says claim amounts of $100,000 and up get priority, due to availability of agent resources as opposed to merit of the case. Lower dollar level cases have a better chance to be investigated by the FBI if there is admittance of guilt or an offer of restitution. Smaller cases might also be a better fit for local or state courts. For cases beyond U.S. borders, FBI agents in U.S. embassies can be a resource particularly when stolen collateral is involved.

For marine lenders, Alaniz suggested going back to basics about knowing borrowers. Verify where prospects live (with utility bills), work (pay stubs), bank (statements), where they plan to spend the borrowed money (is the new or used boat at the correct marina?; is the student enrolled in the college where tuition is to be paid?); consider an in-person interview with the borrower to see if he/she matches background information provided; and be cautious of those using free email accounts. Always be suspicious if the borrower’s paperwork looks too good to be true. In terms of verifying loan collateral, Alaniz says there’s no better way than to go take a look. And if everything is not in order when funds are to flow, he simply advises, slow down the rush to loan.

Dodd-Frank Wall Street Reform and Consumer Protection Act

This legislation was signed into law by President Obama on July 21, 2010 with the original intent to prevent a future economic crisis, like the one we had in 2008 – 2009, by increasing regulation of the financial industry. It was the most sweeping over haul of financial regulation since the Great Depression some 80 years ago. Bankers have criticized the law as being a huge government over reach which will hurt consumers through unintended consequences and not achieve its goal of preventing another economic crisis. Here are initial impacts of this legislation.

• The Durbin Amendment, implemented in June of this year and effective October 2^nd, limited the fee banks could charge on debit card interchange transactions to 21 – 24 cents.  While this created a windfall to retailers, it will cost the banks billions of dollars in lost revenue. Retailers do not plan to share this savings with consumers, following what happened in Australia after a similar law was instituted there. The impact on consumers has been an increase in fees on checking accounts and the loss of reward programs on debit cards.  Financial institutions offering free checking accounts have dropped from 76% to only 26%.  
• Federal Definition of a “Dwelling” under the new rules from Dodd-Frank, in conjunction with definitions from the SAFE Act, have caused boats to be included in the definition of a dwelling. This exposes new loans to full time liveaboards to all the requirements of real estate mortgages. Banks cannot comply with this requirement due to system constraints, profitability, etc., so most marine lenders have discontinued making loans to liveaboards.  It appears one NMBA member, Essex Credit Corp, is taking necessary steps to comply with these laws and will focus on lending into this niche market.
• Consumer Financial Protection Bureau (CFPB) opened for business July 21, 2011 (one year after Dodd-Frank was signed into law) without a director. President Obama did not recommend his number one choice, Elizabeth Warren, who had helped set up the CFPB, to be its first director, because he did not have the votes among Republicans or Democrats for senate confirmation. She had become a lightning rod for criticism because of her hard left anti-bank activist views. The Republicans prevented Mr. Obama from using a recess appointment to install a director over the summer by using a technique to keep the Senate in session over the summer recess. Obama appointed Richard Cordray, to be the CFPB director 3 days before the bureau opened for business. This was a very controversial choice because of his previous work as Attorney General of Ohio, where he supported consumer activists in legal action against banks to block them from foreclosing on delinquent homeowners.  The Senate Judiciary Committee voted 12 -10 on Oct. 6^th to send the nomination to the full Senate for consideration.

 A letter to the President signed by 44 Republican Senators vowed to block the confirmation of any director and demanded that the CFPB be run by a 5-member commission instead of the director that was set up under Dodd-Frank. The senators also demanded the bureau be accountable to Congress and funded by congressional appropriations. Bills have been introduced to make these changes to Dodd-Frank.

Because the CFPB does not have a Senate-confirmed Director it does not yet have the legal authority to regulate non-banks. For the marine industry this means for now the CFPB will not have authority over marine finance service companies. Boat dealers were already exempt from CFPB oversight under a special exclusion negotiated when Dodd-Frank was being written.

• High Profile hires at CFPB so far include Holly Petraeus, wife of CIA Director General David H. Petraeus, as Director of the Office of Service Member Affairs, a division in the bureau that will be responsible for protecting military families from financial scams. The Dodd-Frank financial overhaul law, which created the bureau, mandated that it open a military division. Hubert H. "Skip" Humphrey III has also joined the CFPB. Humphrey, a former attorney general for Minnesota and son of former Vice President Hubert H. Humphrey, will head the CFPB's Office of Older Americans
• Transfer of Consumer Protection Authorities from other Government Entities has begun, effective 7/21/11, and the following government entities have been impacted: Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Federal Trade Commission (FTC), Office of Thrift Supervision (OTS), Office of the Comptroller of the Currency (OCC), Department of Housing and Urban Development (HUD), and the National Credit Union Administration (NCUA). The Office of Thrift Supervision (OTS) which regulated savings and loans and savings banks transferred to the Office of Comptroller of the Currency (OCC) on 7/21/11 as part of Dodd-Frank law.
• Volker Rule – On October 11^th U.S. bank regulators unveiled proposed regulations that outline how banks should restructure their operations to comply with a new ban on risky speculative bets. Under this Volcker rule, banks would have to stop any proprietary trades (defined as those lasting 60 days or less) by July 21, 2012, and would be barred from using foreign affiliates to conduct trades. The Dodd-Frank financial-overhaul law seeks to prevent banks from putting themselves, and the broader financial system, at risk by prohibiting so-called proprietary trades, or those in which banks seek to profit by trading with their own money. Regulators have spent months working out the details of the regulations, which also restrict most relationships with hedge funds and private-equity funds. Several institutions have already closed trading desks that made bets with the firm's own capital and many traders have moved to smaller firms that aren't subject to the rule.
• The Living Will rule implements the Dodd-Frank Act’s requirement that the largest bank holding companies design an exit strategy in the event of their own bankruptcy. The so-called living wills must outline steps for a rapid and orderly resolution to bankruptcy during times of financial distress. Companies with over $250 billion in assets will be required to submit living will plans by July 1, 2012 with smaller banks having a longer time frame.

§  Federal Preemption caused enormous concern last year when the Dodd Frank was passed, as it restricts the ability of national banks and federal savings associations to assert preemption, but it appears preemption is not dead.  Clarity with regard to national standards is vital to smooth functioning of the nation's economy, because it provides the predictability that business and banks need to provide products and services effectively and efficiently. Generally, the Dodd Frank Act and the rules will do the following:

•  
  • Eliminate preemption for operating subsidiaries of national banks and operating subsidiaries of Federal savings associations;
  • Apply to federal thrifts the same preemption standard as applies to national banks, and apply to Federal thrifts the visitorial powers standards applicable to national banks;
  • Eliminate ambiguity concerning the preemption standards in OCC regulations by removing language from OCC rules that provides that state laws that "obstruct, impair, or condition" a national bank's powers are preempted; and
  • Revise the OCC's visitorial powers rule to conform the Supreme Court's Cuomo decision, recognizing the ability of state attorneys general to bring enforcement actions in court to enforce applicable laws against national banks as authorized by such laws.

·         If paid a fee for the loan by a bank the originating broker cannot be paid by the consumer also

·         The rule prohibits a loan originator from steering a consumer to consummate a loan that provides the loan originator with greater compensation, as compared to other transactions the loan originator offered or could have offered to the consumer, unless the loan is in the consumer’s interest.

·         Prohibit lenders from paying brokers fees based on “yield spread premiums”.

·         Requires state and federal licensing (SAFE 2009)

·         All compensation of the broker must be disclosed in the Good Faith Estimate

Unfair, Deceptive or Abusive Acts or Practices

The CFPB published its first examination manual October 13, 2011 and one section provides new insight into the bureau’s intended use of its authority under Dodd-Frank to prohibit what it considers to be an “unfair, deceptive or abusive act or practice.” The Act provides CFPB with rulemaking authority and, with respect to entities within its jurisdiction, enforcement authority to prevent unfair, deceptive, or abusive acts or practices in connection with the provision of consumer financial product or services or offers to do so. While standards for what is unfair or deceptive are somewhat established, the CFPB’s ability under Dodd-Frank to regulate practices it considers “abusive” is new territory, and an act or practice is not abusive unless it:

1. Materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or
2. Takes unreasonable advantage of –
   a. A lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service;
   b. The inability of the consumer to protect its interests in selecting or using a consumer financial product or service; or
   c. The reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

The manual does not yet clarify enforcement activity based on practices that are deemed abusive. Though it has been reported the Bureau’s focus will be on improving disclosures and not prohibiting financial products, the Manual suggests a comprehensive risk assessment that includes many qualitative and/or highly subjective items such as:

• Products are bundled in a way that may obscure relative costs.
• The terms of the product are subject to change at the discretion of the entity, and the entity has frequently made changes in the terms.
• Complex products are marketed to consumers not likely to benefit from them or who may be likely to be harmed by them.

The NMBA Legislative Committee believes given the number of Democrats in the Senate that don’t agree with parts of Dodd Frank and the fact that the House is now controlled by the Republicans, unlike the situation when Dodd-Frank was originally passed, that the CFPB Director confirmation will be stalled until the 2012 elections which will delay some parts of Dodd-Frank being implemented. The NMBA Legislative Committee does not believe a wholesale repeal of Dodd-Frank will happen prior to the 2012 elections, given that banks are being vilified by government officials to deflect attention and criticism from their responsibility for economic problems and their policy failures. Stay tuned for more updates as the drama continues to unfold.

BoatU.S. Foundation Receives $5,000 NMBA Donation

 During the Annual Conference, NMBA presented the nonprofit BoatU.S. Foundation for Boating Safety and Clean Water with a donation of $5,000. It was the second time the Foundation was chosen at this recognition level.

Foundation President Chris Edmonston was on hand to accept the award and highlighted the work that the group does for widespread benefit of all boaters. The Foundation promotes stewardship of America’s waterways and works to make boating safe and enjoyable. Programs include the Children's Life Jacket Loaner Program which is now established in all 50 states with over 500 active sites, the EPIRB rental program which has saved 63 lives to date, and the more than $1 million awarded to local community groups through the Grassroots Grants safety and clean water programs since 1997.

In addition to these donations, the NMBA has recognized the efforts of Grow Boating, with contributions of more than $9,500 in the past several years.

U.S. Marshal Can Charge Sales Commission on Bank Credit Bids

Robert D. McIntosh, Partner at McIntosh Schwartz, P.L. has advised marine lenders that the U.S. Marshal can charge a fee when a bank makes a credit bid at auction. It is common for banks to submit a credit bid of a nominal sum in an attempt to avoid payment of the U.S. Marshal’s commission. The bid may be accepted but the fee will be established based on the amount of the judgment lien or the established appraised value of the property. Currently the Marshal’s fee is capped at $50,000. The complete details can be found in United States Code Title 28, 1921.

Agencies Issue Statement to Clarify Supervisory and Enforcement Responsibilities for Federal Consumer Financial Laws

Washington--A statement that explains how the total assets of an insured bank, thrift or credit union will be measured for purposes of determining supervisory and enforcement responsibilities under the Dodd-Frank Wall Street Reform and Consumer Protection Act was issued today by five federal financial supervisory agencies.

Under section 1025 of Dodd-Frank, the Consumer Financial Protection Bureau has exclusive authority to examine for compliance with federal consumer financial laws and primary authority to enforce those laws for institutions with total assets of more than $10 billion, and their affiliates. Section 1026 confirms that the four prudential regulators--the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency--will retain supervisory and enforcement authority for other institutions. The policy statement issued today clarifies the application of sections 1025 and 1026 by addressing two key matters: the measure to be used to determine asset size and the schedule for making such determinations.

The statement explains that a common measure of the asset size of an insured depository institution is the total assets reported in the quarterly Reports of Condition and Income (Call Reports), which banks, thrifts, and insured credit unions are required to file.

The statement also explains the need to establish a schedule for determining the size of an institution that avoids unwarranted uncertainty or volatility regarding the identity of an institution's primary supervisor for federal consumer financial laws. Such conditions could both impose increased burden on institutions and interfere with the orderly implementation of the agencies' responsibilities with respect to the federal consumer financial laws. In order to avoid these adverse consequences, the agencies are adapting criteria used for deposit insurance assessment purposes. Accordingly, after an initial asset size determination based on June 30, 2011, data, an institution generally will not be reclassified unless four consecutive quarterly reports indicate that a change in supervisor is warranted.

Released November 17, 2011 by Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency

National Titling for Boats Update

The Uniform Certificate of Title Act for Vessels (UCOTAV) was passed in July, 2011 by the the Uniform Law Commission to (ULC). The Act is similar to most state boat title structures and will serve as a valuable tool the U.S. marine lending community as well as consumers, insurers and law enforcement.

The next step will be from the work of a newly formed “Enactment Committee”. The primary purpose of the Committee is to facilitate UCOTAV’s enactment by making strategic support connections with stakeholders and sponsors via outreach programs.

The Committee held its first meeting on October 25^th and will be operating on a fast track having already obtained support from major trade associations, state agencies and the U.S. Coast Guard. NMBA’s participation on the Committee continues to focus on bank protections and operational effectiveness as well as full enactment of the Act.

Please feel free to contact your legislative committee members Don Parkhurst (don.parkhurst@suntrust.com), Jim Coburn (jcoburn@coburnassociates.com) or Jim Stewart (jimstewart@ks.com) with any questions you may have. 

UCOTAV (the Act) may be found at www.uniformlaws.org

STATISTICS CORNER

National Growth by Boat Type Time Trend

• Retail sales for new boats nearly flat with 2010
• Both aluminum and fiberglass outboard boats are showing slight YTD increases over last year – 5.1% and 2.6% respectively – and together make up 62% of sales in 2011
• Inboard boat sales total only 4% in 2011
• Inboard cruiser sales dropped 24.4% in 3Q2011, dragging YTD growth down 12.2% from 2010
• Inboard ski boat sales have dropped 3.7% YTD

National Monthly Comparison

• Seasonality of new boat sales remains consistent, steadily increasing in the spring and peaking in June with sales of about 19,000 units
• Little change in 2011 sales from 2010  

National Two Year Comparison by Boat Type

• Below 3 slides represent retail sales of new boats only in 26 states, which represent about 62% of the US sales