Kit Menkin’s Leasing News  www.leasingnews.org 

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Farewell, Jack Welch, you made long time GE stockholders happy, plus

  changed the world of business. Best of luck on your retirement.  editor

 

**** http://www.ge.com/news/welch/index.htm

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Headlines

 

       Charlie Lester---Final Part “ Recourse Broker “

         Leasing Industry Software Side

          BancLease Releases Windows NT Version

           E-Mail Blocking

              Irwin Capital Holdings Announces a New Venture Franchise  Unit                    

            Tangible Personal Property, Leasing and Bundling work groups meetings

                  Bush administration no longer interested in breaking up Microsoft

             First American Payment Systems, L.P. Announces Multi-Year Processing

                            Agreement With Accelerated Card Company, Inc.

             Bank official says workers hid thousands of IRS returns

                       because they felt harried

 

 

Tomorrow---“Take the e Train”  Alan Zeppingfeld reports on the eLessors

       Technology Conference held last week in Atlanta, GA

 

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IRWIN CAPITAL HOLDINGS ANNOUNCES A NEW FRANCHISE FINANCE VENTURE               

                                                                                                                                                                              

(Bellevue, WA)  Mike Taft, President of Irwin Capital Holdings, announced today that John Rinaldi, Executive Vice President of the Franchise Capital Services division of Federated Capital Corporation has agreed to join a to be formed subsidiary, Irwin Franchise Capital Corporation (IFCC).  John will serve as President and will be joined by Lloyd Droller, S.V.P. and Chief Credit Officer and Al Predmore, S.V.P. Marketing and IT, as well as,other key staff in their Purchase, NY, Columbus, NE and other satellite offices.

 

 In addition, a portfolio of loans and leases, as well as other assets, have been acquired from Federated. Irwin Franchise Capital Corporation will be providing financing programs to branded franchise businesses throughout the United States and in Canada through its affiliate, Onset Capital.  IFCC will focus on serving established multi-unit operators with equipment, leasehold improvement, and real estate financing needs.

 

IFCC will complement Irwin Capital Holding's other equipment financing businesses - Irwin Business Finance, Bellevue, WA (www.irwinbf.com), which funds and services small ticket (up to $500,000) equipment leases and loans

throughout the U.S. sourced through a selected national network of brokers and intermediaries and Onset Capital Corporation, Vancouver, British Columbia (www.onsetcapital.com), which provides small ticket equipment leases and loans throughout Canada.

 

Irwin Financial Corporation (NASDAQ-NMS: IRWN, www.irwinfinancial.com) is an interrelated group of specialized financial services companies.  The

Corporation, through its five subsidiaries ? Irwin Mortgage Corporation, Irwin Union Bank, Irwin Home Equity Corporation, Irwin Ventures, and Irwin Capital Holdings ? provides a broad range of consumer and commercial

financial services in selected markets in the United States and Canada.

 

CONTACT:

Kris Darby

Irwin Capital Holdings

Phone Number: 425-460-1420                                                                                                      

 

  ( courtesy ELAonline.com )

 

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Private Label Recourse Broker

 

Third and Final Part of Conversation

      with “ Grandpa” Charlie Lester, Senior Leasing News Advisor

 

 

LN: You have addressed what can go wrong at the funding source level in a

Recourse relationship, what can go wrong on the broker side?

 

GC:

First of all, to become a Private Label Recourse Broker, the broker has to

be able to produce high volume, have a good credit shop and strong financial

statements to prove the ability to honor repurchases if reserves held by the

funding source are depleted. From my experience, most recourse brokers have

always honored their agreements and closed their portfolios as agreed. They

operate clean shops since they know they are handling their own money and

they have to pay for their mistakes.

 

However, we also have to face the fact that a dishonest recourse broker can

rape the funding source. Once the recourse relationship is started with a

funding source and everyone starts getting warm and comfortable with each

other, a dishonest broker can do undisclosed split deals since his CBR is

the only one pulled and it can be used to send the parts of the deal to

multiple sources. In addition, the broker can manipulate portfolio

repurchases by making the monthly payments in behalf of the lessee. The

money to make these monthly payments can come from early payoffs if the

broker does not forward the payoff to the funding source. It becomes a case

of money management on the part of the broker with the hopes that profits

will get him out of the hole.

 

I had to fire several sales reps at Lease Pro for various tactics like doing

a "cut and paste" on a credit score and sending multiple purchase option

letters to a lessee and then using the $1.00 one when the pricing was based

on FMV for their commission purposes. There were only a few, but I did not

know about the purchase option problems until the deal paid out early

one month and I had to eat the loss. The rep got fired and documentation

took over the responsibility to verify all parts of the deal in the phone

audit including the purchase option.

 

You never know if it is true or rumors, but I have heard of brokers doing a

cut and paste on a BK CBR by cutting off the beginning and ending lines and

pasting the CBR of another good applicant in the middle. BK to a Beacon of

735 in two minutes with 20 excellent trade lines.

 

If the recourse broker is responsible for collecting sales taxes and

personal property taxes and remitting them to the taxing authorities, the

temptation has to be tremendous since most taxing authorities could not find

missing tax payments unless they were soaked in perfume and stuck up their

noses.

 

And now for my editorial--Until the large funding sources start prosecuting

fraudulent brokers and lessees, fraud will continue to grow since there is

no punishment. I saw over $750,000 of fraud deals go down while employed by

First Sierra from a vendor in Southern California that popped on Kit's

newsletter a few months ago with a new company name.

 

 First Sierra management made a decision to wait and see if the lessees would make a few payments instead of prosecuting them or the vendor. While investigating these frauds on behalf of First Sierra, I found the same vendor had placed similar deals worth millions at Advanta, Copelco, American Business Credit, and several brokers had placed these deals at Colonial Pacific and Manifest, but not one single company ever filed criminal charges against the broker, vendor or lessees to my knowledge. Saving face, avoiding lawsuits and hoping to collect a few bucks is more important to most funders than stopping the bad guys once and for all. This is a major reason why we have dishonest brokers,

vendors and lessees. Crime without punishment just breeds more of the same

so funders get ready for more and increase more reserves.

 

Another war story--one of my analysts at Lease Pro found that a vendor in

Texas was a total fraud and since we saw Copelco's inquiry on the CBR, we

called to notify them of the problem. They checked and sure enough agreed.

Their punishment for the vendor---they flew down to Texas and took back the

plaque they given him as one of their best vendors the year before. Even

worse, we notified ATT of the problem and found out six months later that they were still doing business with the vendor. When I talked to the broker manager,

she said they had placed restrictions on the vendor to make sure they only sent

good business and they needed the good business to cover the fraud deals already

on the books.  GO FIGURE!!!!

 

To all the sources above, don't threaten a lawsuit, I am so well documented

you would be embarrassed even more in Kit's newsletter.

 

More personal editorial--the fraud and deception in the leasing industry

caused by a very, very small but highly efficient number of brokers and

vendors is one of the major reasons I left the leasing industry last year. I

can tell you it is nice to work in a financial niche market where fraud is

minimal and you don't have to take more than 5 tranquilizers a day.

 

Thanks for your time and good selling, Charlie Lester

 

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Leasing News e-Mail Block

 

Balboa Spokesperson Who Did Not Want to Be Named:

 

 “The information systems department has told me for a fact we do

not block it.  Any returned email you get has to be from inactive mail

accounts.

 

I believe you have twice written that we block it.  Please stop printing

this and retract your statement. Other than that you are not authorized to

quote or print this email in any form.”

 

 ( As per our policy, I have edited this e-mail to disguise the sender who did

not want his named used or e-mail, for that matter.

 

The facts are last week there were three days that all the Balboa

e-mail came back.  Over 15 or more.  Yesterday and today, none came

back.

 

I don't think it is old addresses.  And after today, it eliminates

size as the reason, I believe.   There were days I mentioned a sircam virus,

and some servers "think" that there is a virus as the name is mentioned

in the copy.  I don't think that happened on all those days.

 

Sometimes the mail comes back three or four times, as if the server is down.

Perhaps the mail keeps trying and eventually does reach the recipient.  I am

only reporting the facts.  The Balboa e-mail comes back often.

 

I do know that the amexbf addresses when I send from leasing news

are not received, as the recipients tell me they are not receiving

the e-mail. When I send as American Leasing, I get the auto responders from the users, plus they receive the e-mail. Logically, Leasing News e-mail is stopped by their server.

 

Atel says they do not block, but as I said in today's e-mail, I don't

know if it is "on purpose" or a server program.  At one time, they

were up-grading their mail server and had some problems. One ATEL reader

told me when they don’t get the e-mail, they go to the website, although they prefer to get e-mail. Atel suggested anytime this happens, to notify them

as it may be some glitch in their new software e-mail program. They are

not purposely blocking any e-mail.

 

What I shall do is the next time the e-mails come back from Balboa, I will take the

advise from Atel and  forward them to the Balboa sender of the e-mail above, as it appears he does not believe me there are periods of time his company server rejects our e-mail reports.

 

An employer has the legal right to block e-mail, to read e-mail, and to restrict

e-mail.  Some employees abuse this “ right.”  Plus an employer has the right to have a policy that any e-mail written will be from the individual, and does

not necessarily reflect the company itself.

 

An excellent book, although written in 1998, is “Risky Business” by Dan Janal. http://www.danjanal.com/risky_business.html.  It is still a very valid book for

both employee and employer rights and netiquette. editor )

 

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Software Side

 

The software side of the leasing industry are reportedly  in a real battle these days.

 

Mc Cue's latest client list dropped from 44 to 26.

 

Decision System Industry(IDS) announced huge losses and another restructuring 

 

Leaseteam and Turbo still strong competitors for the little guys but

many don't last. 

 

Summit is holding on to its own.

 

They reportedly are awaiting all the new leasing companies to be born out of the

mergers from the ex-employees and salesmen created by GE and  Tyco, among

others.. 

 

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BancLease Releases Windows NT Version

 

 

CHARLESTON, Mo.--(

 

Leasing Software Keeps In Step With Advancing Technology

 

BancLease, a leasing consulting service for community banks, announced the release of its new Windows(TM) NT version of the BancLease software.

 

The software can now be installed on any Windows-based system from Windows 95 to NT.

 

"Today, banking technology is evolving very quickly," said Britt McConnell, director of BancLease, "and our customers expect the best from us. Up-to-date software is a necessary component of the BancLease program. The customers on our maintenance program can rest assured that enhancements and updates to the BancLease software will be available to them for every technological advancement."

 

First introduced to the market in 1993 with the inception of the BancLease program, the software provides users with the ability to quote lease payments to customers (and yields to the bank), to prepare of all necessary leasing documents, print amortization schedules, calculate after tax yields, e-mail documents to branches capability, calculation of irregular (flexible) payment leases plus a database for saving lease quotes. Complete installation of the BancLease software takes less than five minutes. Combined with training and consultation, the software adds a final component to a full service bank: leasing capabilities.

 

Competitive leasing programs have given a large number of community banks a huge influx of revenue (relative to the bank's asset size). Leasing programs are beneficial to the bank and the customer. Customers can frequently write off the lease of commercial, agricultural or municipal items as an operating expense. By using the program, bankers can provide additional financial products and keep revenue and relationships in-house.

 

First Security State Bank of Charleston, Mo., with assets of $100 million has been using the BancLease program since its inception. "We started a leasing program because of a need in our market," said Don Burnett, president and CEO of Security State BancShares, the holding company of First Security State Bank, "and we founded the BancLease program because it is a need shared by many community banks. By implementing the program, we have seen our leasing portfolio grow to $9 million.

 

"Sophisticated bank customers demand the best in service, technology and financial products, including customers of First Security State Bank, which is why we upgraded some of our bank's platform to Windows NT. The upgrade meant we had to also upgrade complementary programs. As BancLease's toughest critic, the transition from Windows 2000 to Windows NT was one of the smoothest and most seamless. I'm confident every bank will experience the same quality service and training as it upgrades its systems."

 

About BancLease

 

BancLease is a lease consulting service for bankers that was created by First Security State Bank in Charleston, Mo. in 1993. It was designed to help other community banks interested in developing an in-house leasing program. The program provides a turnkey solution that allows banks to lease equipment for commercial, agricultural, and municipal customers and includes software, operating manuals, sample policy, telephone support system, and on-site sales training.

 

Today, more than 190 banks in 34 different states are using the BancLease program for leasing. For more information about the BancLease solution, contact Britt McConnell at 800.530.5327; write P.O. Box 1526, Sikeston, MO 63801 or visit its Web site at www.banclease.com.

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Equipment Leasing Association  September 20-21

 

The Tangible Personal Property, Leasing and Bundling work groups of the Streamlined Sales Tax Project (SSTP) will meet Thursday and Friday, September 20-21, at the Four Points by Sheraton Chicago O'Hare Airport Hotel, 10249 West Irving Park Road, Schiller Park, Illinois 60176, telephone: 847/671-6000 or www.fourpoints.com.  The Tangible Personal Property group will meet 8:30 am to 5:00 pm on Thursday, while the Leasing and Bundling groups will each meet from 8:30 am to 5:00 pm on Friday.  The Leasing work group/subcommittee will continue deliberations on a range of issues relating to completing a uniform definition of leasing and rental.

 

Originally scheduled for the following week, organizers advanced the dates to avoid a conflict with the Yom Kipper holy day.  A block of rooms has been set-aside for Wednesday and Thursday nights.  Make reservations directly with the hotel by calling (847) 671-6000.  Ask for the SSTP (or possibly the FTA block); the group rate is $126 per night plus tax.  Call today because the room block might only be available until Tuesday, Sept. 4. Upon arrival at O'Hare make your way from baggage claim to the Shuttle Center (by following the signs on the floor) and then call the hotel to determine the pick-up schedule.

 

The registration form is being circulated as a PDF file attachment. To access

them, please go to:

 

 http://www.leasingnews.org/PDFFiles/Sept5-2001/agenda.pdf

 

http://www.leasingnews.org/PDFFiles/Sept5-2001/septreg.pdf

 

 If your computer system will not accept the PDF file attachment contact the Federation of Tax Administrators at 202/624-5890 to complete registration

 

The meeting registration fee is $60 for each day ($120 for both) to include a continental