April 25, 2001






     "End of Story" for U.S.Capital

       ELA Code of Fair Business Practice

        Consumer Confidence Now 52.7%, Reports BIGresearch

         eLease on the Monitor Daily News

           Bob Rodi Small Broker Re-Visited



   Equipment Leasing Association April 26 San Francisco meeting Thursday


  ---Mention Leasing News and attend at MEMBER PRICE----


            also attendees will receive FREE giveaways including:


   +ELA Survey of Independent Leasing Companies - a $99 Value!

   + Equipment Leasing and Finance Foundation B2B Report - Net Readiness

          of the Equipment Leasing and Finance Industry - $250 Value!

   +Door Prizes and other Giveaways


  Weather is great, too!!! Spring in the City





    U.S. Capital, Santa Barbara, California  "End of Story"


Santa Barbara Sheriff Detective Vic Alvarez said it was "end of story."


U.S.Capital principal Ken Nelson turned 40 on Sunday, and committed suicide on Monday, leaving

a note that he could no longer handle the debts that his company and he incurred.

He had been living in hotels, Detective Alvarez reported, driving a 1999 Corvette that

was six month's behind in lease payments.


"He died with nothing," Alvarez said. " There were perhaps about another $80,000 in

advance rentals not returned.  He had no assets.  It's really a very sad situation.  He

had no friends, only some relatives to inform about his death."


He left a note that was addressed to relatives.


This company appeared on the Leasing News Bulletin Board last year as not paying

commissions or returning rental fees. JDR Capital, among other brokers and super brokers, were

having difficulties. There were alleged ties with United Capital

and UniCapital.  He was reportedly a former salesman at Multifund, San Jose, California.






         Small Broker Re-Visited



  Bob Rodi's summary of the funding environment for the remainder

of the year...I believe that Bob is right on target with his predictions for the balance of

2001.  I expect the credit climate will remain a conservative one as the major funding sources

keep a wary eye on portfolio performance in the short term. The current reduction in funding

sources is reminiscent of the situation that existed in the early 90s.  Just as the stock

market has been subject to painful corrections, the leasing industry is now undergoing a

similar adjustment, with a renewed focus on credit quality and margins.  Based on my past

experience, I anticipate that funding options for brokers will increase once again as the level

of mergers and acquisitions activity subsides and new players inevitably enter the market.

Having spent the last year outside the leasing industry  working with several Internet

companies, I appreciate the opportunity that the leasingnews.org site provides to keep

up-to-date on the leasing world.



 Kathy McGurk






  ( Several readers may be new to Leasing News, as Bob Rodi has been predicting

   what is now happening exactly one year ago in Leasing News. Before we

   started these, Bob was talking about this way before anyone else. Why,

   he was part of Prodigy, the first active internet company over ten years

   ago. His partner left, was active in it, and retired as a multi-million

   when he saw the writing on the wall. Bob has been a broker/lessor for

   many years, was the first I know of to enroll in the Faire/Issac credit

   scoring, is a computer nut like I am, and as an ex-cop in Balitmore, he never

    forgot what it was like to work in the street. Several readers wrote in,

   "So What?" about his latest  predication for Christmas for the broker community.

   I asked him for a reaction: )




I have received a few comments from some people who, I assume, took offense

at my comments regarding small brokers, Superbrokers and the direction of

the dot com/high tech market. Please pass on to everyone that I wasn't just

predicting delinquent accounts in the dot com/high tech sector.  I had

already done that at the beginning of last summer, long before the high tech

scene was the disaster it is now.  I was merely pointing out that the dot

com demise and the accompanying default and high delinquency has a

"downstream" impact on our industry that is just starting to hit us.  This

is why my comments state that there is "no margin for error". 


Consider this. There is a liquidity "crisis" in the banking industry.  Just

look at the fallout in the Pacific Northwest in our industry from B of A

cutting off lines of credit to third parties.  I heard from one funding

source CEO that he was tired of reading business plans from brokers and

lessors who were cut off by B of A in that region.  Raising equity for a

leasing company was tough beginning two years ago, right now it's next to

impossible.  If this situation causes mainstream funding sources to "lower"

their risk profile, even a little, then the credits on the margins suffer.

So do the lessor/brokers who package and sell those credits because the

sources that buy them dry up temporarily.


Let's take any major funding source who has several divisions and a diverse

set of financial services products.  Third Party business is undoubtedly a

very small part of that.  In a fast paced market, that business represents

enough incremental profit to keep the funding source interested, even though

it may create lower a ROE and represent a higher risk to the overall

portfolio.  In a slower, tighter market, one where costs and risk are being

managed much more tightly, those transactions are cut from the mix because

of the cost of booking and managing them.  This is where the term "high

maintenance" business comes from. In case anyone hasn't noticed financial

services companies are cutting back on "high maintenance" business or

raising the price on that business to "force" it to justify its existence.

A lot of the companies on Kit's list did the high maintenance deals and

didn't price them right.  This is done to get market share, increase sales

for captives, etc. It affects us because, as an example, Sun Microsystems

Leasing is really GE Capital Vendor Services.  They share a building with

Colonial GE. Although Colonial had no part in the Sun program I can almost

guarantee that any problems with the Sun portfolio will affect them

indirectly.  This will be true with any company because management will

shift burdens to more profitable divisions to maximize shareholder value.

If they don't their shares get sold off and the stock price drops.

Management will only tolerate that so long or they'll be replaced.


I know this sounds like big picture stuff and small brokers wonder how this

even matters to them.  Those of us that were around in the late 80's and

early 90's will remember the bank owned leasing companies that tanked

because of the real estate debacle.  The bank exposure was enough to have

them catch a cold but the far weaker leasing subsidiaries got pneumonia and

died.  As I recall, they took some third party companies with them.


The same thing is going to happen to anybody that had heavy exposure to dot

coms and high tech companies.  The sad thing is that even if you didn't do

this business and you were dealing with a funding source, bank, Superbroker,

etc. who did then your business will be affected by the delinquency and bad

debt in that segment.


If you couple the problems in the high tech sector with the general

liquidity crisis you get a pretty bad scenario for anybody that made their

living on the fringes of our industry. It's not a great scenario if you do

mainstream A/B business either, but it's manageable and may even represent a

growth opportunity.  I'm not trying to insult anyone, I'm just trying to

give them a heads up.  It's  just my opinion and you know what everyone says

about opinions. 


Bob Rodi



1-800-321-LEAS (5327) x101


 Equipment Leasing Association---Fog City

San Francisco, CA - Thursday, April 26, 2001  Tomorrow

Renaissance Parc 54 (55 Cyril Magnin Street)


*Sponsored by GnazzoThill, San Francisco, CA*


Join us for a Packed Luncheon Program on these Informative Topics:


Complete Electronic Lease Transaction

Charles J. Nabit, Southport Financial, Baltimore, MD

Matthew Shieman, Matsco Financial Corporation, Emeryville, CA


See what technologies are involved in an electronic lease transaction - see how it actually

happens! Finally the talk becomes reality! find out who was involved in the first electronic

lease transaction and more...


How to Put Together and Store an Electronic Lease

that your Lender will be Willing to Accept as

Collateral Ruth A. Strauss, GnazzoThill, San Francisco, CA


What will your lender look for? How do you and should you put together and store an electronic

lease that your lender will be willing to accept as collateral? This presentation will cover the

influence of Revised Article 9 on the perfection of security interests in chattel paper,

proposals for corrective amendments to address uncertainties, and security measures that you

should take in the interim.


Legal Update on Digital Signatures

Mark Schreiber, Cooper White & Cooper, San Francisco, CA


Need to know the latest on digital signatures? An important legal update on this great step

forward in e-business


Schedule: Registration 11:30 a.m.

Luncheon & Presentation: 12 Noon - 2:30 p.m.


Registration Fees: ELA Members $65. Non-Members $100


However, anyone responding from Kit Menkins Leasing News will automatically receive the member

price! Just note it on your registration form!


All Metro attendees will receive FREE giveaways including:

*ELA Survey of Independent Leasing Companies - a $99 Value!

* Equipment Leasing and Finance Foundation B2B Report - Net Readiness of the

Equipment Leasing and Finance Industry - $250 Value!

*Door Prizes and other Giveaways

For further information on this and other ELA Metros go to the ELA web site at

http://www.elaonline.com/events/2001/metros/index.cfm. To register, print the Registration Form

and fax to ELA Meetings at (703) 527-2649. Questions? Call Jeanne Lund at (703) 516-8366.


Katie Plona

Director of Membership Equipment Leasing Association







 Far Be if for Leasing News to Quote the Daily Monitor, but this banner ad has been appearing

for at least a month:



eLease created the capital equipment leasing industry's first automated leasing platform for

developing and delivering lease process automation (LPA) solutions.

Utilizing the eLease Platform™, eLease delivers web-enabled leasing solutions that add leasing

functionality to any Website, lease sales force automation solutions, configurable workflow

solutions for back office lease processing and a B2B marketplace for acquiring capital


leases and lease lines.

Add leasing functionality to your web site, visit us at www.elease.com




Now, if you call, you will find the number is disconnected, as the company went out

of business when Primestreet pulled their plug.



eLease first made the Leasing News Lis thttp://www.leasingnews.org/list.htm in

 June of last year:


"eLease ( 2/2001 )employees Let Go, Prime Street is "History." (12/2000) purchase by

Primestreet (June/July/2000)senior management changes )"


We also confirmed it with a leader in the leasing and internet leasing field:


"elease's name (URL) went to Insight in exchange for compensation on elease's lease line.

WiredCapital bought the source code of the existing elease product and hired over three

remaining tech employees of elease. Everything became a fire sale once PrimeStreet hit the

toilet...Definitely elease is no longer an entity"


 Kathleen Wiest



But I don't think Sue Angelucci is worried about this.  The Monitor Web Site gets

75,000 hits a day, and their daily newsletter reaches 5,000, she tells me.  We

even advertise their ourselves.


Molloy Asociates, publishes the Monitor, and is primarily a personnnel specialist in

the leasing industry "With a data base of almost 20,000 leasing professionals nationwide, we’re

able to focus our efforts quickly and efficiently. And, when you add the Career Showcase in both

the Monitor and our new MonitorDaily web site, your job opportunity can be posted as soon as it

becomes available."







Fed Sparks Confidence -- Consumers Feel Better About the Economy


    COLUMBUS, Ohio----April 25, 2001--Alan Greenspan's lowering of interest rates has started to

revive consumer confidence according to just released findings from BIGresearch surveys before

and after the announced rate cuts.


    Consumers say that their feelings about the chance for a strong economy in 2001 are higher

than prior to the Fed's dropping interest rates by 1/2% on April 18, 2001.


    In a study conducted by BIGresearch between April 4-13, 2001, 3400 consumers exhibited the

following response to a question on confidence in the economy:


    "Which of the following best describes your feelings about

    chances for a strong economy in 2001?"


    Very confident 5.0%

    Confident 39.1%

    Little confidence 47.0%

    No confidence 8.9%


    After the April 18th announcement, the responses from consumers

    surveyed from April 20-23, was:


    Very confident 5.5%

    Confident 47.2%

    Little confidence 39.3%

    No confidence 8.0%


    There was an overall increase in confident/very confident feelings for a strong economy to

52.7% post Fed announcement compared to 44.1% pre announcement -- a solid 8.6% increase in

confidence. However, consumer confidence is still not where it was when BIGresearch asked the

same question during the week of January 17-23. At that time BIGresearch reported that consumer

confidence was at a level of 59.9% (confident/very confident).

    "Consumer confidence certainly is a real measure of trust and hope in our leaders. But

consumer confidence is also highly influenced by TV media exposure," said Joe Pilotta, Ph.D.,

Vice President of BIGresearch. "It will be important to see if the level of confidence will

continue to increase over the next several weeks. BIGresearch will continue tracking consumer

confidence, and analyze the determinants of confidence," said Pilotta.

    About BIGresearch:

    BIGresearch gathers very large samples from the world's largest online community of over 51

million e-mail newsletter subscribers and employs new computer intensive statistical methods to

extract previously unknown, comprehensible and actionable information for crucial business or

policy decision-making. www.bigresearch.com.

    Complimentary top line findings are available at http://www.formsite.com/prosper/info. The

data is available for purchase from BIGresearch, which includes the ability to cross tab

respondents by age, sex, zip code, geographic regions, and all other data points.




          Code of Fair Business Practices - Equipment Leasing Association


"Mike Fleming has advised me that we do not issue statements regarding ongoing complaints but I

am enclosing a link to the text of our code of ethics on our website.  It is a little lengthy."


Katie Plona

Director of Membership

Equipment Leasing Association




          Equipment Leasing Association Code of Ethics




Code of Fair Business Practices


The Equipment Leasing Association (ELA) Code of Fair Business Practices signifies voluntary

assumption by members of the obligation of self-discipline and notifies the public and business

community that members intend to maintain a high level of ethics and professional service. In

essence it proclaims that, in return for the faith that the public and business community places in them, the members accept the obligation to conduct their activities in a way that will be

beneficial to the public and business community.

The Association enforces the Code of Fair Business Practices by receiving and investigating

complaints of violations of the Code and by taking appropriate disciplinary action against any

member lessor found to have violated its Code. In the final analysis, however, it is the desire

for the respect and confidence of the industry and of the public and business community that

should motivate lessors to maintain the highest possible ethical conduct.

PreambleWhereas, the leasing industry has evolved because of the increasing need by general commerce for competent, objective, and trustworthy advice with regard to the acquisition of capital goods, and the need to acquire the use of such capital goods by leasing them; and

Whereas, many of those engaged in the leasing industry have joined together in an organization

known as the Equipment Leasing Association of America; and

Whereas, despite a wide diversity of interest and activities among lessors, lessees, their

financial intermediaries, agents, and representatives, there are nevertheless certain

fundamental standards of conduct which should serve as guiding principles for all engaged in the industry.

Now, therefore, the ELA hereby adopts on October 13, 1992, the following Code of Fair Business

Practices for commercial transactions, subject to applicable Federal and State laws:


Section 1

General Standards of Professional Conduct

A Lessor should conduct himself with integrity and dignity and encourage such conduct by others

in the industry.


A Lessor should encourage practices and should conduct his activities in a manner which reflects

credit on himself and the industry.

A Lessor should act with competence and strive to maintain and improve his competence and that

of others in the industry.

A lessor should use proper care and exercise independent professional judgment.

Section 2


The Lessor or Intermediary and His Relationship to the Lessee

In dealing with a Lessee, a Lessor or an Intermediary should:

Disclose all relevant information as to the terms and conditions of the lease which may affect

the Lessee's decision;

Hold in strict confidence all financial information supplied by the Lessee on a confidential


In the event the Lessee is advised by the Lessor or Intermediary about taxes, accounting or

legal aspects of the lease, recommend independent verification from the Lessee's tax, accounting or legal counsel, and;

Treat in a fiduciary capacity all funds received from the Lessee which may be returned to the



Section 3

The Lessor and His Relationship with the Vendor

In dealing with Vendors a Lessor should:

Not make payments to salesmen of the Vendor without the knowledge of the Vendor;

Comply with all valid terms and conditions of the Vendor contract which are not in dispute, and;

Inform the Vendor immediately if the Lessee refuses to accept the leased equipment or otherwise

fails to comply with the terms of the Lessor's purchase order to the Vendor.


Section 4

The Intermediary and His Relationship to the Lessor as a Funding Source

A. In dealing with an Intermediary, a Lessor should:

Hold a strict confidence all information pertaining to a lease supplied by such intermediary on

a confidential basis, and;

Not make payments to a salesman of an Intermediary without the knowledge of the Intermediary.

B. In dealing with a Lessor, an Intermediary should:

Reveal all relevant aspects of a lease proposal to a Lessor which may affect the Lessor's


Correctly represent his relationship to and agreements with Lessees;

Not make representations to a Lessee on behalf of a Lessor without the Lessor's express

approval, and;

Make certain that both the Lessee and Lessor understand the Intermediary's position in the



Section 5

The Intermediary

The Intermediary should:

Not knowingly mislead a Lessee as to his source of funds or ultimate successful conclusion of a

lease, and;

Not simultaneously offer a lease proposal to more than one Lessor without revealing that action.


Section 6

The Lessor and His Relationship to Other Lessors

A. General Statement of Principles:

Honesty, integrity and forthrightness should govern all dealings and relationships between


Competition should be keen but fair, and;


A Lessor should not knowingly misrepresent facts to another Lessor concerning any aspect of a

leasing transaction or mutual Lessee;

A Lessor will not take, or induce a Lessee or any other party to take any action that results in the Lessee breaching the provisions of an equipment lease with another Lessor.

B. Exchange of Credit Information: The following provisions are based on The Robert Morris

Associates' Code of Ethics for the Exchange of Credit Information:


Article 1

There are to cardinal principles in the exchange of credit information: confidentiality and

accuracy of inquiries and replies. This includes the identity of inquirers and sources which

cannot be disclosed without their permission.


Article 2

Each inquiry should specifically indicate its purpose and the amount involved.


Article 3

Responses should be prompt and disclose sufficient material facts commensurate with the purpose

and amount of the inquiry. In responding to specific questions, careful and frank replies should be given.


Article 4

It is not permissible when soliciting an account to make an inquiry to a competitor without

frankly disclosing that the subject of the inquiry is a prospect. Reply is at the discretion of

the Lessor.


Article 5

A request for information based on actual or contemplated litigation shall be clearly identified as such. Reply is at the discretion of the Lessor.


Article 6

All credit correspondence, including form letters, should bear the manual signature of a

responsible party.


Article 7

The sharing of credit information on a mutual customer should not be more frequent than

annually, unless a significant change in the relationship requires an earlier revision.


Article 8

When multiple inquiries are made simultaneously on the same subject, the inquirer should clearly state that information from the Lessor's own files is sufficient.


C. Enforcement Provisions: The following provisions, consistent with the provisions of Article

VIIB of the ELA Bylaws, will set forth the procedures tobe followed in complaint proceedings:

An ELA Fair Business Practices Committee, consisting of three members of the ELA Board of

Directors, shall be appointed by the Chairman of the Association who shall also designate one

member of the Committee as Chairman of the Committee.

A proceeding alleging violation of a provision or provisions of the ELA Code of Fair Business

Practices may be initiated by a member of ELA or by the Association by filing a written

Complaint sent to the ELA President at ELA Headquarters by registered mail. The Complaint must

identify the section or sections of the Code alleged to be violated, must set forth in detail

the facts claimed to support the charges of Code violation, and must include pertinent documents in the possession of the Complainant relative to the Complaint. In addition, the complainant may submit affidavits from the complainant and others in support of the Complaint.

Copies of the Complaint and supporting documents, if any, shall be sent by the President to the

members of the ELA Fair Business Practices Committee.


If the Committee determines that the Complaint and supporting documents, on their face, do not

state facts constituting a violation of the Code, the complainant shall be so advised by the

Chairman of the Committee, and no further action shall be taken.


If the Committee determines that the Complaint and supporting documents allege facts which, if

true, would or might constitute a Code violation, the Chairman of the Committee shall request

that the ELA President send a copy of the Complaint and supporting documentation to the party

complained against (respondent) who shall have 30 days after receipt of the Complaint and

documentation within which to send an Answer to the Complaint by registered mail to the ELA

President. The Answer shall include all documents which respondent claims support the Answer,

and, in addition, affidavits from respondent and others may be submitted. The Answer and

supporting documents shall be sent by the ELA President to the members of the ELA Fair Business

Practices Committee. The President shall send a copy of these procedural rules to both the

complainant and respondent.


A copy of the Answer and supporting documents shall be transmitted to the complainant who may,

if so desired, send to the ELA President, by registered mail, a Reply to the Answer together

with any additional supporting documents, within 20 days of the receipt of the Answer. The Reply shall be sent by the President to the respondent and the members of the Committee.

If the Committee decides, on the basis of the submissions made, that it is clear that there is

no violation to the Code, the parties shall be so advised, and no further action shall be taken.

If paragraph (7) hereof is not applicable, and if the complainant and the respondent each waive

a hearing, the ELA Fair Business Practices Committee may decide the matter on the basis of the

documents filed. If requested by either party, the Committee shall hold a hearing at which the

parties may be represented by counsel and given reasonable opportunity to present evidence and

be heard on matters related to the charges. The Committee may request others to testify at the



The views of the Committee shall be in writing. If the Committee is of the opinion that the

respondent should be censured, or suspended or expelled from membership in ELA, the matter shall be transmitted for hearing on the existing record before the ELA Board of Directors, and the

parties may be represented by counsel. No additional documents may be filed or any testimony

taken, unless ordered or requested by the Board. If the Board is of the opinion that the

respondent should be censured or suspended from membership in ELA, the Board may censure or

suspend the member by a two-thirds vote of the directors present. If the Board is of the opinion that the respondent should be expelled from membership in ELA, it may, by a two-thirds vote of

the directors present, suspend the respondent and make a recommendation for such expulsion to

the Association membership, which recommendation shall require for approval, as submitted by the


Board or as may be modified by the membership, the vote of at least two-thirds of the voting

members of the Association present.

In case of the proceeding initiated by the Association, the respondent shall have all the rights set forth in the foregoing provisions.


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