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Kit Menkin’s Leasing News www.leasingnews.org Monday, April 22, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- Cal
Bank Automates DecisionExpress™ from LiveCapital
Shari Lipski NAELB Conference Chair 2003 CIT Tyco Floating Rate/Fix Payment Fred is Back!!! Executive Caliber Most Recent Newsletter
BancPartners Chooses Steve Logan as VP for Austin, Texas office.
The why behind your FICO score is what's important ###
Denotes Press Release John Kruse of CapitalStream will be serving at the Las Vegas Conference his “ Leasing Wallbanger.” The Week Ahead April 22-27 April 22 Monday Equipment Leasing Association National Funding Exhibit, Chicago, IL Microsoft Chairman Bill Gates testifies at federal court hearing on what to do about firm's operating-system monopoly. CSX, Cox Communications and Lucent Technologies issue quarterly reports. April 23 Tuesday 2nd Day Equipment Leasing Association National Funding Exhibit, Chicago, IL Senate Commerce Committee hearing on how drug companies manipulate approval process to thwart competition from generic drugs. Senate Banking Committee hearing on reform of bank deposit insurance. Senate Judiciary Committee hearing on proposed merger of ATT and Comcast cable system. House Government Reform Committee hearing on fuel prices. CACI, Freddie Mac, Exxon Mobil, Gillette, Hilton, Lockheed Martin and Verizon issue quarterly reports. April 24 Wednesday Closing Day- Equipment Leasing Assoc. National Funding Exhibit, Chicago, IL House takes up legislation to reform corporate auditing and executive responsibility. AT&T and Xerox issue quarterly reports. Economic indicators: March new-home sales and durable-goods orders, Fed "beige book." April 25 Thursday Senate Commerce Committee hearing on nomination of Harold Stratton to be chairman of the Consumer Product Safety Commission. Aetna, Black & Decker, Bristol-Myers Squibb, Kodak, Starbucks and Viacom issue quarterly reports. Economic indicators: March existing-home sales, first-quarter employment cost index. April 26 Friday Economic indicators: First-quarter GDP, March consumer sentiment. --------------------------------------------------------------------------------------------- ### ################################### ########################## California
Bank & Trust Automates Credit Decision Process with DecisionExpress™
from LiveCapital
Leading
commercial bank speeds processing, reduces costs
San Mateo, CA.– LiveCapital, a leader in business credit automation, today announced that California Bank & Trust (CB&T), the third-largest SBA lender in the California market, has implemented DecisionExpress to automate and streamline the loan decision process in all branch offices. “DecisionExpress has reduced our application processing time from about 5 to 7 days, in our paper-based system, to less than 20 minutes, so we can provide our customers with an answer as we’re discussing their needs,” said Mike Mantle, Executive Vice President and Director of California Bank & Trust's Community Development Division. “In addition to dramatically reducing processing costs and time in our branch offices, we are now able to let our customers fill out an application and get a decision on the Internet, which is a new channel for us. DecisionExpress helps us capture more business with a fast decision.” “Implementing DecisionExpress for credit automation has a tangible economic impact,” said Mike Grossman, CEO of LiveCapital. “CB&T’s experience of rapid improvement in their credit process, in higher sales and reduced costs will go straight to their bottom line.” DecisionExpress was implemented for CB&T in less than three months, and was rolled out to all the branch offices starting in early March, providing quick payback on CB&T’s investment. Adoption of the solution was rapid and provided feedback so quickly that CB&T has already requested additions to their implementation, including a shorter credit application for smaller loan amounts. The economic benefits to CB&T include increased sales, decreased processing costs, and reuse of an existing customer's credit data to provide a new credit decision. DecisionExpress’
flexible decisioning engine accommodates different business and consumer
credit data sources, custom and standard scorecards, business rules
and risk-based pricing for credit. Optional process management capabilities
provide for streamlined workflow of any decisions that must be made
by credit analysts, as well as managing the required documentation. About
LiveCapital
LiveCapital is a leading provider of credit automation products to Fortune 1000 companies. The company's core product, DecisionExpress, automates the credit approval process to speed sales and reduce operational costs. Privately held and headquartered in San Mateo, California, LiveCapital has streamlined credit management for industry leaders including United States Steel, John Deere and Federated Capital. Investors include Kleiner Perkins and XL Capital. For more information, please visit www.livecapital.com. About
California Bank & Trust
California Bank & Trust is among the largest commercial banks in the State of California with over $8 billion in assets and nearly 100 branch offices. With local management and decision-making and an emphasis on relationship banking, CB&T provides a variety of products, resources and financing solutions for businesses and individuals, including wealth management, Internet banking, commercial and small business lending, cash management and international banking. Visit CB&T's website at www.calbanktrust.com. # # # ### ################ ################################## SHARI
L. LIPSKI, CLP TO BE CHAIRPERSON
OF
THE NATIONAL ASSOCIATION OF
EQUIPMENT LEASING BROKERS’ 2003
ANNUAL CONFERENCE April
18, 2002, this past Saturday at the Annual Conference of the National
Association of Equipment Leasing Brokers in Orlando, Florida, Bob Bell,
CLP, Director for NAELB and this year’s Chairperson, announced
that Board of Directors were pleased to announce that Shari L. Lipski,
CLP has accepted the position of Chairperson for their 2003 Annual Conference
to be held in Chicago. “I
am tickled pink to announce that Shari has agreed to be our 2003 Conference
Chairperson. For several reasons, not the least of which is similar
to our “back to basics” focus. As an industry veteran, Shari
has the experience and expertise to help NAELB continue on its vision
to provide beneficial industry education and events to the broker community.
I look forward to working with her and her committee for our next venue
in Chicago”, said Bell, President, Independent Leasing
Associates. “As
an active member in the leasing industry since 1989, this is a tremendous
honor and I look forward to putting together a committee of brokers,
funders, and service providers to make next year’s event the best
ever. With the venue in Chicago, we can’t go wrong!” stated
Lipski in her acceptance speech on Saturday. The NAELB is an organization formed to promote the interests of equipment leasing brokers through education, advocacy, improved communication with funders and programs designed to upgrade the professionalism and profitability of brokers, funders and others engaged in the business of equipment lease financing. For more information please visit www.naelb.org. ( Date of the Chicago conference has not been chosen. Orlando,FL conference attendance 120 brokers/50 funders, according to Jeff Taylor’s report http://executivecaliber.ws/sys-tmpl/naelbspringconference2002/ editor ) ### ######################################## # CIT Tyco Floating Rate/Fix Payment In response to the CIT structure of a floating rate/ fixed payment, I was taken back to my E.F. Hutton/Chrysler Capital days of the mid 80's. Though I don't believe we actually closed a deal with such a structure we did offer a fixed payment /floating rate options. At the end of each 12 month period, the "float" impact would be calculated and the lessee would make an adjustment payment or possibly receive a refund or credit on the next payment. In reality it is not as bad as it sounds. The structure is intended to give the lower rates normally associated with a "float" yet provide a consistent payment for the lessee. On the other side, the lessor can book and amortize the deal just like any other with the yearly adjustment. The difficulty was getting the lessee to understand the concept. In addition, an agreement on the interest method used to calculate the adjustment sometimes became complicated since both the lessee and lessor were looking for the advantage. Documentation was not a real issue. I believe that this structure would be appealing to larger corporations in larger, very competitive transactions but may be too complicated for smaller deals. Len Sperl, CLP Onyx Capital Corp Pittsburgh, PA --- Regarding the story about CIT and their fixed payment-floating rate leases. We did floating rate leases back in the early 1980's when I was at MNB Financial Corp.(Merchants National Bank). We had several structures, but in one plan the payment was fixed for the term of the lease. If the underlying index changed up or down, the term was lengthened or shortened accordingly. In another plan a lump-sum adjustment was made annually. There is, of course, no way to predict what the adjustment will be. However, the payment doesn't change. CIT is obviously trying to recover some yield by only moving the rate upwards. If you will recall, rates were historically high and there was a big demand by the lessees for floating rates in hopes that the rates would decrease. Now the demand for floating rates is coming from the lessor. Interesting. Bob Teichman, CLP Teichman Financial Training 3030 Bridgeway, Suite 213 Sausalito, CA 94965 Tel: 415-331-6445 Fax: 415-331-6451 e-mail: BoTei@aol.com "Providing education and training to the equipment leasing and financing industry." John Kruse to Serve “Leasing Wallbanger.” Learn About the 2002 UAEL/EAEL Spring Conference! May 2-4, Las Vegas, California Download the Spring Conference Brochure (PDF) http://www.uael.org/events/spring/2_1Bro.pdf First Timers: $425 Invitation to all who were previous members under a company no longer in business, merged, acquired, or no longer employed there. You are invited at the “first timer” fee. Contact Joanie Dalton directly at (510) 444-9235 x27 or joanie@uael.org for rooms at Caesars Palace. Not to late to come to the conference and also ask John Kruse of CapitalStream for a “Leasing Wallbanger.” Fred is Back!!! Fred St Laurent has joined MSI International, leaving the leasing brokerage business, after a short stint. MSI is a great firm. They have been around 34 years.. I let Spencer Richman of American Financial know I was being recruited and told him today when I finally decided. It was a difficult decision but I do love recruiting and let's face it, I must humbly admit that I am a good recruiter. The website for American Financial is almost done and can be seen at www.afnleasing.com We are still adding text and graphics and I fully intend on completing this for Spencer in the next few weeks. I had a lot of fun designing and building the site. I have to say that Spencer Richman is one of the best guys I know in the business and over the last few months I have received some great training and mentoring from him and have developed a real friendship with him. He is a great guy to work for. The recruiter comments of this week have been intriguing. I have a lot of respect for Teri Gerson and Hal Horowitz, they are two of the top recruiters in our industry and the comments they made were incisive and relevant to the issues faced by recruiters today. The leasing industry has been a difficult industry to recruit in over the last year for many. Other industries have been hit much harder though. The tech industries have been in real trouble over the last year, engineering has been hard hit as well as many others. I have to disagree with these two fine professionals on the issue, even though I believe they are both correct in their observations, and I was really impressed with Mr. Horowitz's "bad paper" comment; "A short term placement to us (recruiters) is tantamount to a bad lease." and "If you don't hire the person who meets all of those qualifications, you're buying your own bad paper." (I plan on using Hal's example often...) The issue that I must address here is the perception that the Companies or Clients have somehow forgotten or have become confused about what a recruiter does and therefore is missing out on the true value of what it is we do as recruiters. The error in this is: I believe that WE as recruiters have forgotten or become confused about what it is WE do!!! Let me explain. 1) Recruiters have taken on the role of a "glorified Human resource department" filling jobs for companies, using the Internet, reducing fees and basically offering to outsource what most companies have done for themselves for decades. The boom economy helped to facilitate this; the "normal economy" of this last year should be a wake up call for us as recruiters. 2) Client companies do not need a recruiter to fill or backfill jobs, in a market where there are so many people on the street. People need jobs and will do what they must to find jobs and feed their families. Companies can find them in all "the usual places" why do they need to pay fees? Just to qualify people beyond the resume? Believe me when I tell you that a good HR team can do it a lot cheaper than a recruiter on a fee-per-placement basis, and be just as thorough and effective. 3) Recruiters have always been most effective in finding the GREAT candidates that have a job now!!! A company that needs TOP people not JUST people will always be more than happy to pay a fee for a HIGH QUALITY candidate who is working now at a competitor who was not looking for an opportunity until the recruiter called. We, as recruiters need to focus more on finding the RIGHT clients. I don't believe that anyone can educate a CEO, President or Owner about what it is a recruiter can do for him or her. They either; know and don't care; or they know and can't afford it; or they are using recruiters effectively. The more we drop our fees and try to be an extension of HR the more we will frustrate ourselves as recruiters. Recruiters can identify, locate, engage and entice top people working for a competitor, and get them to consider an opportunity with a client company. That is what we do. We can help companies take the quality of their employees "up a notch". We are not order takers and we are NOT an extension of Human Resources. Does that make sense? Please put me back on your list of recruiters. Fred St Laurent MSI Intl Inc Member of ELA UAEL NAELB 321-952-1422 fstlaurent@cfl.rr.com -------------------------------------------------------------------------------------- Executive Caliber Most Recent Newsletter http://executivecaliber.ws/sys-tmpl/door/ Jeff Taylor reports on the Equipment Leasing Association “Capitol Hill” legislative trip: http://executivecaliber.ws/sys-tmpl/elacapitolhillday2002/ and National Association of Equipment Leasing Broker’s Orlando Flordia Conference (he reports 120 attendees and 50 brokers in attendance.) http://executivecaliber.ws/sys-tmpl/naelbspringconference2002/ The newsletter has many other interesting features including the History of Equipment Leasing: http://executivecaliber.ws/sys-tmpl/historyofleasingpart1/ To learn more about Mr. Taylor: http://executivecaliber.ws/sys-tmpl/companybackground/ Please make time to read this very informative equipment leasing newsletter. __________________________________________________________________ ###
################################### ######################### BancPartners
Announces New Vice President for Austin, Texas office.
BPL-BancPartners announces that Steve Logan has accepted the position of Vice President of Sales and will be responsible for its Texas operations. Steve was formerly Business Development Manager for Dell Financial Services and possesses more than 20 years experience in the equipment finance industry. ( He replaces Jim Lahti, he has re-opened Affliated Corporate Services, Lewistown, Texas.) BancPartners offers a comprehensive turnkey private label equipment-leasing program to community banks. The program allows banks to offer equipment leasing as a financing option to their customers with little additional risk or overhead. Mr. Warren Hawkins, CEO of BancPartners, commented, “We are pleased to have Steve join our organization to continue to develop our Texas banking network. Steve will be responsible for the developing of our presence in the Texas market by strengthening our sales and support network. These changes are necessary to insure no interruption of customer service as we complete our recent announced separation from ACSI. ACSI management and staff possess extensive experience with the leasing broker industry. The separation of the two companies should be complete by April 30th.” Mr. Hawkins further commented, “We wish Rick Galtelli and Jim Lahti continued success as they re-establish ACSI and its broker network.” BancPartners Leasing Corporation is one of the largest independent leasing companies in the Southeast and Southwest US, with program banks in Texas, Alabama, Tennessee, Florida, and Georgia. Its private label-leasing program is the most comprehensive program offered to community banks. BancPartners can be found on the Internet at www.bancpartners.com. ### ################################. The why behind your FICO score is what's important BY BETTY LIN-FISHER Knight Ridder Newspapers When it comes to credit scores, it's the details that count. Credit scores are those elusive numbers that for years were secretive figures only seen by lenders deciding whether to approve a consumer's application. Within the last year, the three major credit bureaus - Equifax, Experian and TransUnion - have begun offering credit scores to consumers in addition to detailed credit reports that show your credit history. Credit scores assign a number to a person based on the information in an individual's credit report using complex mathematical equations. The number, which summarizes the information in your credit report, is designed to tell credit lenders the likelihood that a consumer will repay a loan. Jan Davis, executive vice president of consumer products for TransUnion, compared a credit score to a trip to the doctor: "Your credit score is kind of like your cholesterol number. You can't impact the number directly. You have to look at the underlying reasons," she said. Scores have gained popularity since the early 1990s when mortgage lenders began using the figures to make the loan-approval process more objective. Scores are now used by virtually all lenders for loans for homes, autos and credit cards. There are literally hundreds of different models designed by businesses to come up with a credit score, though the most widely used is what's known as the FICO score. The FICO score ranges from 300 to a high of 850 and is produced by Fair, Isaac and Company, which pioneered the technology for credit scores in the late 1950s. Until 1989, the company was developing custom credit scoring models for individual lenders, many of which are still used. But now, at least three-quarters of all mortgage decisions use the FICO score as do 23 of the largest 25 credit-card issuers and 40 of the 50 largest financial services institutions, said Craig Watts, consumer affairs manager for Fair, Isaac and Company. Credit scores were originally designed for lenders, and the company has had to work hard to translate a lot of the "insider" language for lenders into user-friendly information for consumers, Watts said. Fair, Isaac has partnered with Equifax to offer the FICO score through the credit bureau. Competitors TransUnion and Experian offer their own versions of credit scores to the general public. But part of the potential confusion among consumers can come up when they find out their credit score from one of the bureaus and assume the credit lender is looking at the same score. Lenders have access to the FICO score from the three bureaus, but consumers only have access to those FICO scores through Equifax. So, I may apply for a loan with my Equifax credit score in hand, but my lender may have pulled a FICO score using the data in my Experian credit report. Or the lender may have gotten my FICO score based on my TransUnion credit report, which may have slightly different information based on what is reported by my creditors (not all creditors report all of your history to all three bureaus, which is why it's important to check your credit reports from all three bureaus for inaccuracies). Or another scenario may have my lender looking at a totally different score by another vendor. The bottom line is that you should always ask your lender what scoring model they are using, said Paul Richard, executive director of the Institute of Consumer Financial Education. Though the scales for the scores from the three credit bureaus vary slightly, they all look at similar factors in credit reports when determining the score - for instance, maybe you have too much debt, too little credit history or a history of late payments. While many consumers get caught up in the actual number that makes up their credit score, experts say what's more important are the factors that went into the score. "Just like your cholesterol number, you can't really affect the number, you have to affect the behaviors," Davis said. All the different scoring models list the risk factors - or credit behaviors - that are negatively affecting your score. Fixing the negative factors could help raise your score in the future. "They always sound negative, whether you have a great risk score and are very creditworthy," said Rod Griffin, spokesman for Experian. A few of the scoring models also list the positive things raising your score, too. Whether your actual score makes or breaks a loan might depend upon the lender. It might be more like your score opens or closes a door further to a loan. Fair, Isaac's Watts said the guidelines of influential mortgage agencies Freddie Mac and Fannie Mae don't set rules, but their indicators set the standards for the mortgage lending industry. Those agencies, which buy mortgages from banks and resell them to investors, have indicated to lenders that any consumer with a FICO score above 620 is good while consumers below 620 should result in further inquiry from the lender, Watts said. But the decision is still in the lenders' hands. For instance, one person may go to two lenders using the same credit score model on the exact same day and may get approved by one and rejected by the other based on the lending experience, Griffin said. Stan Foraker, vice president of residential mortgage lending for Fifth Third Bank, Northeastern Ohio, said the credit score is only one indicator his bank looks at when deciding about a mortgage. "We don't stop at a credit score. We actually analyze the credit," said Foraker. "Someone with a moderately low (FICO) credit score, 620, could still have perfect repayment history, but they just have a lot of credit." Credit scores are also an ever-changing number. Though they probably won't change dramatically, the score will vary according to what is in your credit report at a given time and what information about your payments - or lack of payments - to your creditors is shared with the bureau. "Scores for the most part have no shelf life," said Watts, who added that lenders will typically look at your score a few times during the loan-approval process to make sure nothing dramatic has changed in your file. But even with all the advice about how the reasons behind a credit score are the most important, it's still hard for consumers not to get bogged down by that number. "We're so driven by numeric assessment of our performance in the United States, it's almost irresistible," Watts said. The people who get caught up in the credit score and a desire to get a perfect FICO score of 850 are the people who call most often, industry experts say. But, Watts said once you get into the upper echelon of FICO scores - in the high 700s - lenders don't care how high your score is or isn't. You're still going to get a good lending rate. In actuality, the higher you get, the less attractive you are to lenders because they can't make money from you. "You get a high score by taking on little debt, managing it, not having very many credit accounts and not being susceptible to credit pitches from lenders," Watts said. It's also difficult to try to outwit the FICO scoring method. For instance, Watts said opening or closing accounts to try to influence your score may or may not help or hurt your score. It really depends upon the mix of credit you already have, he said. Credit bureau officials say they don't offer the same scoring model because "one shoe doesn't fit all." Yet Experian has altered their scale given to consumers to mirror FICO's scale to try to cut down on confusion. TransUnion's scale is slightly wider, so it doesn't mirror FICO, but Davis told me I should have a pretty good idea of my potential FICO score by looking at the TransUnion score (which comes free with a report) and underlying factors going into my score as opposed to paying a little extra for a score from competitors. Davis also readily acknowledges, however, that if you're going to try to get a mortgage tomorrow from a lender, "it's hard to beat the FICO score." So if the FICO score is the one that most lenders are using to make decisions on my credit worthiness, shouldn't I just go directly to the source and get a FICO score? If we're going back to the cholesterol scenario that Davis brought up, I see getting the FICO score as my first step and getting a score from a competitor as my second opinions. Or better yet, Watts said his company is talking to Experian and TransUnion about also offering the FICO score to consumers so there won't be any confusion. --- © 2002, Akron Beacon Journal (Akron, Ohio). Visit Akron Beacon Journal Online at http://www.ohio.com. www.leasingnews.org
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