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Kit
Menkin’s Leasing News
www.leasingnews.org Monday,May
6, 2002 Accurate,
fair and unbiased news for the equipment Leasing Industry
Headlines---- Las
Vegas EAEL/UAEL Conference---Steve Geller
Bob Rodi Report on the Las Vegas Conference
Mission Accomplished---Reitman Brings “Archie” Home
This Week ---May 6-10
Duane Russell Experience at the Commercial Money Center Ron
Caruso on the Leasing Industry—Profound and Current Comments
Only time will solve bad reports on credit---Ann Perry
Streamlined Sales Tax Update - NCSL Task Force Meets __________________________________________________________________ Las
Vegas EAEL/UAEL Conference---Steve Geller Steve
Geller on the Joint Eastern Association of Equipment Lessor/United
Association of Equipment Leasing Las Vegas Conference this past
weekend 271
people in attendance at the joint EAEL/UAEL conference, as reported
by UAEL President Bob Fisher at lunch. Great turnout. Workshops
have been very good. This was a very informative and useful conference
with a lot of networking. Too
bad you missed it (your editor was at a family wedding in Pacific
Grove, California). It
seems that the major thrust of the educational sessions zeroed in
on the on-going "app-only" business and the use of scoring
models. There remain a large number of defenders of scoring; however,
it was stated that scoring in and of itself is not the only tool
to use to determine the acceptability of a credit. That has contributed
to the downfall of a number of lenders. Our
funding sources must take the overall credit into account and utilize
scoring as only one piece of the decision-making process. That seems
to me to be different, and wiser, use of the process. App-only
lenders are either groping away or severely restricting the maximum
dollar amount that can be app-only. My
opinion, which is shared by many, is that full financial disclosure
is going to be expanded and moved to a lower dollar threshold on
transactions. We must all work smarter and become more professional
in our approach to sending transactions. More brokers/lessors must
learn how to read and evaluate financial statements and understand
the use of the equipment/collateral being acquired and financed.
More
understanding of the vendor relationship is vital and funders must
get their message out better as to their credit criteria to create
greater marketplace efficiencies. The adversarial relationship
between suppliers of business and acquirers must change into a true
partnership. This can only be achieved through greater education. In
other conference news, a follow-up inter-association meeting was
held. Representatives from EAEL and UAEL, as well as invited representatives
from NAELB, Gerry Egan and Mike Meecher, and Jim Lahti, representing
the CLP Foundation, were in attendance. There are many issues, and
I am proud this was first recommended by a reader of Leasing News
that you wrote about several times, contacting the various association
president. This is the second meeting. Issues on standardization,
ethics, and coordinating the many conference dates to everyone’s
advantage. It seems that this cooperative effort is working well
and I am sure there are big plans in store. The
Certified Leasing Professional Foundation held a board of directors
meeting. The members of the board, as well as volunteer CLP's have
been working diligently to continue refining the mission statement
of the foundation, the educational objectives in order that the
foundation will become a major contributor in educating our industry.
The foundation is under taking an exam re-write and preparation
of educational materials for CLP candidates to utilize. Any CLP
interested in volunteering for any of the activities of the foundation
are most welcome and should contact Cindy Spurdle at foundation
to learn what can be done. The foundation is in serious need of
funding through donations, sponsorships and dues in order to continue
its good work. Anthony
Gaiie, the conference's feature speaker, gave a presentation about
the subconscious aspects of business and the use of self-hypnosis
in developmental training. His demonstration using audience volunteers,
highlighted by Connie Brazier's salute to Bob Fisher, and Daryl
Warnbrand's inability to lift up a "10,000 pound" hackysack,
and Larry LaChance's "telephone calls" from his major
vendor, pointed out how much "mind over matter" is involved
in our success in business, as well as other life situations.
Mr. Galie is a physotherapist, author and guest lecturer. A phone
call to either association office can get information as to purchasing
his materials. (e-mail:
joanie@uael.org or EAEL Alison
Pryor Amfnyc@aol.com) The
lone casualty at the conference occurred when Geraldine Walker stepped
off Caesars Palace curb and ended up in a wheelchair with ankle
damage. I never got the entire story, but I hope that Geraldine
was behaving herself. Maybe
you can run a story about all the new funding sources I have been
able to meet at these Spring meetings and how I am able to get funding
for a greater number of brokers who need the funding. Steve
Geller (
Steve is a member of the Leasing News Advisory Board. His company
is Leasing Solutions, where he helps others find leasing sources
for lines of credit or for individual transactions, often making
the actual presentation. He had over 11 years with Orix Credit Alliance
in charge of buying broker business. He was at Tilden before that.
) Bob
Rodi Report on the Las Vegas Conference The
conference actually truly turned out great. There was a lot of
camaraderie there and a great session between the broker/lessor
group and the funder group on Saturday was one of the highlights
of the conference. Joanie
(Dalton) and Allison (Pryor) did a great job of putting this one
together and the food was some of the finest we have to date at
any conference. Caesar's Palace is still a first class venue for
a meeting. There were some very interesting new people there and
the entire group was upbeat and positive. The
speaker on Saturday was Hypnotherapist, Anthony Dailey. His session
was very informative and his use of humor and hypnosis, to get his
point across was fabulous. There
was excellent interaction among all the members of UAEL and EAEL.
The new president of NAELB, Gerry Egan and his wife, were also there.
They are delightful people and I hope they will come to another
one of our conferences in the near future. All-in-all
I do not think that it could have been any better. Hats off to
Gordon Roberts and Brent Hall for a job well done and my sincere
thanks to all of the EAEL/UAEL members who came to the conference
and demonstrated that the Independent Originator is, indeed, alive
and thriving. One
last thing. I would like to publicly thank UAEL Past President
Joe Woodley for the incredible job he is doing for our Association.
Every UAEL member owes Joe a debt of gratitude for stepping into
a difficult position and getting a difficult situation under total
control. THANKS JOE!!! Bob
Rodi, CLP drlease@leasenow.com Past
Presdent UAEL The
Week Ahead May
6-10 Washington
Post May
6 Monday Criminal
trial of Arthur Andersen set to begin in Houston. Federal
Trade Commission opens four-day conference on fuel prices. Stock
of newly merged Hewlett-Packard and Compaq (HPQ) begins trading. German
metalworkers union set to go on strike over wages. May
7 Tuesday Federal
Open Market Committee meets to set interest rates. Senate
Commerce Committee holds hearing on merger approval agreement reached
by Federal Trade
Commission and Justice Department. Senate
Governmental Affairs subcommittee holds hearing on role of board
of directors in Enron collapse. Economic
indicators: First-quarter productivity May
8 Wednesday Senate
scheduled to vote on farm bill. House
scheduled to vote on plan to store nuclear waste at Nevada's Yucca
Mountain. May
9 Thursday Senate
Armed Services Committee marks up defense authorization bill, including
likely provision protecting
funding for Army's new Crusader howitzer, made by Arlington-based
United Defense Industries. Federal
Reserve Bank of Chicago opens two-day conference on regulating financial
markets through various stages of the business cycle. Libertarian
Cato Institute celebrates 25th anniversary and awards the first
Milton Friedman Award, posthumously, to British economist Peter
Bauer, who died last Thursday. May
9 Friday Securities
and Exchange Commission holds Investor Summit, including panel discussion
and questions
and comments from the public. Economic
indicators: April producer price index ------------------------------------------------------------------------------------------- Mission
Accomplished---Barry Reitman Brings “Archie” Home. April
24 eMail to Leasing News: The
plan: I have made my reservations with Delta. On the evening of
4 May I shall fly into Little Rock on the way back from the Eastern
Association of Equipment Lessor and United Association of Equipment
Leasing Conference in Las Vegas. The following morning Archie,
ears and all, will be crammed into a soft-sided larger-than-regulation
puppy carrier. The roadblock is the size of the under seat bag.
It has been resolved by using a soft-sided bag, and fudging on the
size. A friend with ties to the airline industry spoke to his contact
at Delta Corporate. She said to make sure that when I book my first
class Sky Miles seat, I tell them to enter into my "Personal
Name Record" that I have an English Terrier puppy in a Pet-Mate
bag. Then at the gate, look the agent in the eye and say with authority,
"It was all cleared. Look in my PNR. The bit about citing
the PNR (Personal Name Record) apparently is worth knowing about
for a host of things. Of course, you have to say it with authority
-- and a straight face! http://www.keystoneleasing.com/newkid.html The
Bull Terrier Club of America rescues approximately 75-125 dogs each
year. The combination of intelligence and sweet sensitivity
that make them such wonderful companions, means that Bull Terriers
in need have special requirements. Your check made payable
to "BTCA Rescue" will be a blessing. It can be sent
to: If
you know Bull Terriers, you know that within that massive, muscular
chest is a soft, sweet heart. The Bull Terrier Club of America
Rescue Support group cares for dogs that, because of reasons such
as death of the owner or financial distress, are in need
of a new home or other care. --------------------------------------------------------------------------------------------------- Duane
Russell Experience at the Commercial Money Center Very
interesting to follow the developments re the unwinding of CMC… As
you know I’m retired from over 45 years in the leasing and
equipment finance business. I
have read with interest the E-mails and particularly the latest
from Ty. I
don’t know Ty… I’ve met him fleetingly on a couple
of occasions, but I have known his father for a number of years… I
can’t prove or disprove any of the allegations, but I do think
Ty has to be totally biased, simply because of his role and his
involvement… As
you know Kit, I worked with CMC for a while as a marketing consultant.
I believed, and still do, that there is a market and a place for
this last resort type product. As long as terms and conditions
are not hidden or misrepresented to the Lessee, then I would support
it all the way. In
my opinion, and based on my experience, the product was not misrepresented
as far as terms and conditions, or cost were concerned. They were
very upfront about the rate, and they had a real “take it or
leave it” approach which was almost refreshing. I
gave up however when I saw repeated delays in funding, with frequent
excuses that just didn’t ring true to me. Also I saw instances
where they would ask for additional documentation on the eve of
funding when the package had been in their offices for a considerable
amount of time. In
my experience, I have seen this before and it almost always was
due to a company that was having problems with their credit lines. I
finally gave up on trying to sell the product, and walked away.
I must tell you that CMC doesn’t owe me a dime, and they have
never “cheated” me. I
would however pose some questions to the “powers that be”
and to Ty… 1)
Why don’t we hear from Ron Fisher rather than Ty
who by his own admission really was not “in the know”?
If that’s the case, how can he defend anyone. Regarding his
comments about the processor, in my experience in senior management
for many years, quite often the workers in the trenches knew as
much or more than I did because of their “hands on” work,
and their network of information sources. 2)
As far as Ron advancing over a million dollars to a funder/surety,
was that truly out of the goodness of his heart? I have seen the
exact same thing done to protect a funding line of credit in order
to avoid audit or examination that might result in the entire facility
crumbling. Was this a CYA maneuver? 3)
One might ask how much money in salaries and commisiions
the senior management took out of the company over the past three
years, including money that may have gone off shore. I’m sure
we will never know, but it would be interesting to know how much
Bill Hanson and those above him to the top took out in each of the
past three years. I use the figure of three years assuming it would
take us back to virtual inception, and I have no doubt they did
not take out as much in the last year. 4)
Will Ron or any of the senior people testify under oath
that they never knew about, or endorsed origination of any transactions,
which were fraudulent or misrepresented to the funding sources? 5)
Would they also attest that they always disclosed to their
sureties and funders, full and complete information regarding subsequent
defaults or problems with funded leases? 6)
Would they also swear that they never misapplied funds
to make transactions that were in default appear to be current to
the funding source? I
am not accusing anyone of wrongdoing, but we really don’t know
the truth unless those “in the know” will speak, and speak
truthfully. Ty should not defend unless he is “in the know”
any more than I should accuse. And make no mistake, I’m not
accusing, but I smell smoke and though there may be absolutely nothing
amiss, unless those at the top speak the truth, we will never know. Duane
Russell (You
may use my name and that does not make me a man with backbone.) --------------------------------------------------------------------------------------------------- Ron
Caruso on the Leasing Industry—Profound and Current Comments (((((((
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UP THE VOLUME !! by
Ron Caruso On
the heels of the recession that wasn’t, we now have the recovery
that isn’t. What gives? In case you were expecting a touchy-feely
type of rebound, forget it. No Virginia, Santa Claus is
not about to appear. The unfortunate reality is this recovery will
continue to creep along at some marginal, sustainable level, until
the bottom line, make that the true, real bottom line known as
corporate earnings begins to show some significant positive growth. This
quasi- recession had two very distinctive features: 1)
Consumer confidence sustained the economy during this downturn- spending
for new homes, new cars, et.al., continued at very high levels.
The continued low, lower, lowest interest rates courtesy of
the Fed gave all of us a belief that we had more money to spend,
so we did. 2)
The downturn with laser-like precision devastated capital spending
budgets. Even today, with inventory levels much lower than
they were six months ago, unused factory capacity remains high.
Until this present unused capacity shows some significant decline,
and corporate profits show some significant upturn, industry
will not be convinced there is a need to open their wallets
for new capital spending. The
message for the leasing industry remains (unfortunately) the same:
there are no discernible, convincing signs that an upturn in capital
spending is around the corner. Most economists and other soothsayers
agree the Fed is not likely to raise interest rates until
late summer at the earliest. There is concern that psychologically
any uptick in interest rates could abort an economic
resurgence. Additionally, the gray clouds emanating from serious
political issues, e.g., in the Middle East, oil prices and the
continued threat of terrorism, continue to cause business to be
hesitant to make long-term investments at this time. At
this juncture, perhaps the best we can hope for is more of the same
for the rest of this year. The leasing industry has gone through
a massive wave of consolidation and cost-cutting. It was anticipated
this would allow the survivors both to be in better financial
shape and also to enjoy fatter spreads. However, the lack
of volume in all three market sectors, small ticket, middle market
and big ticket has (if anything) intensified the competition.
Surprisingly, the credit/collection situation has not deteriorated
significantly. Although this is little consolation as lessors
experience run-offs in their portfolios, for those of us who
can remember the red ink of the early 90’s, there is a recognition
that things could be worse. What
Will Lead the Resurgence? This
is a question which lends itself to a great deal of debate, and
what-ifs. Will
unused broadband capacity suddenly disappear and will the equipment
demands of the now departed dotcoms be replaced? Will
airlines consider replacing their aging fleets? Will
the manufacturing sector take the plunge and seek to bring in new
equipment? Will
demand for transportation, both passenger and cargo, resurge? Will
consumer demand for cars, homes. et.al., continue to pump- prime
the economy? A
“yes” answer to any one of these questions could trigger
a domino-like
resurgence in capital spending. For now, however, the prevailing
answer seems to be-not right away. Stay tuned. ------------------------------------------------------------------------------
Only
time will solve bad reports on credit (also
legitimate addresses for correcting credit reports) Ann
Perry For
some problems, there are no quick fixes. A
bad credit record is one of them. Despite all the ads that promise
to clear up your credit history, there is no fast way to erase negative
information in your files if the information is correct. "
'Credit repair' is really a misnomer," says Paul Richard, executive
director of the San Diego-based nonprofit Institute of Consumer
Financial Education. "If something is genuinely broken, you
don't fix it. The only thing that works is time." Deanne
Loonin, staff attorney with the National Consumer Law Center in
Boston and co-author of the book "Credit Repair," concurs.
"If
there is bad information on your report that is accurate,"
she says, "there is little you can do except wait until the
information becomes obsolete." Some
San Diegans, however, have learned this lesson the hard way after
wasting money on fraudulent credit-repair schemes. Unfortunately,
this is an all-too-common scenario, according to credit counselors,
attorneys and law enforcement officials who try to help those with
debt and credit problems. Authorities say such schemes almost never
provide consumers a service of real value. That
shouldn't be so surprising. Borrowers themselves are the only ones
who can positively impact their credit records – by changing
their behavior. Many
people with credit problems, however, don't really want to change,
Richard says. That's why they fall for the false salvation of credit-repair
gimmicks: "All the consumers want is to continue spending."
For
those who do want what a good credit record can bring – lower
interest rates on credit cards, the ability to buy a home and even
the opportunity for better jobs – there is hope. But it will
mean learning to live within a budget and being vigilant about making
payments on time. "You
can do a lot to rebuild your credit," Loonin says, "but
only if you're back on your feet financially." Here's
how to get started: Get
your cash flow under control. You need to know how much money is
coming in each month, how much is going out, and exactly how you
are spending each dollar. The best approach is to keep track of
everything you spend for two months. If you seem to have more "month"
than money and you're having trouble devising a budget, you can
take a class on budgeting at Springboard Non-Profit Consumer Credit
Management. For information, call (888) 462-2227 or visit the following
Web site: www.credit.org. Understand
how credit bureaus work. These for-profit companies gather information
on the credit histories of consumers, then sell them to lenders,
banks, insurance companies and landlords. The sources of their information
are usually creditors and collection agencies. But they also search
legal records for bankruptcies, judgments and property liens. Your
credit history lists your different accounts, how long you've had
them, how much credit you've received and your repayment record.
"A
company looks at your credit history to see if they can make money
doing business with you," Richard says. If your history shows
a poor track record of repayments, companies will conclude they
could lose money extending you credit. Order
copies of your credit report. It's smart to order copies of your
credit report from all three of the major credit bureaus. Reports
typically cost about $9 each or $35 for all three when you order
them all at once through online sites such as www.qspace.com and
www.creditreport-net.com. Here's
how to contact the three credit bureaus individually: Equifax, P.O.
Box 105873, Atlanta, GA 30348, (800) 685-1111, www.credit.equifax.com;
Experian, National Consumers Assistance Center, P.O. Box 2002, Allen,
TX 75013, (888) 397-3742, www.experian.com; Trans Union, Consumer
Disclosure Center, P.O. Box 1000, Chester, PA 19022, (800) 888-4213,
www.tuc.com. Federal
law entitles you to a free copy of your credit report if you: have
been denied credit because of information in the report and you
request a copy within 60 days; are unemployed and intend to apply
for a job within 60 days of your request; receive public assistance;
or believe your report contains errors due to fraud. Look
for information that is out of date or incorrect. Negative information
that is accurate becomes out of date at a certain point, notes Loonin.
After seven years, lawsuits, paid tax liens, late payments and accounts
sent out for collection should drop off your record. Bankruptcies
are supposed to fall away 10 years after discharge, though most
Chapter 13 bankruptcies are listed for only seven years. Credit
inquiries, or requests to see your report, should stay on your report
no more than two years. In
addition, check for the following errors: incorrect name; incorrect
Social Security number; incorrect account histories; and accounts
listed as open that have been closed. If you find an error, complete
a "request for reinvestigation" form from the credit bureau
and send it with a letter explaining what is wrong. The bureau must
look into the matter and contact you within 30 days. If you are
trying to get a mortgage or a car loan, you can request a rush investigation.
Ask
the credit bureaus to include positive information. If you're making
payments on time to an account and that information isn't being
reflected on your credit reports, mail your recent account statements
to the credit bureaus and ask them to include that information.
Use
credit to get credit. You need to show a history of good credit
repayment. You can achieve this by doing something as simple as
getting a credit card, making small purchases each month and paying
them off on time. Be
patient. It might take as long as two years for your credit to recover
to the point where you can get a credit card, and it can take as
long as four years to qualify for a mortgage. |