September 20, 2001

Headlines---

   

 Red Code Continues to Shut Down Leasing Companies Server/e-Mail

     Financial Federal Reports Record Earnings, up !8% from Previous Year

        Balboa Capital New Complaint plus Balboa Capital Employee “talks”

         Excerpts from Equipment Leasing Association Thursday Newsletter

           United Association of Equipment Leasing New By Laws for Consideration

               Amembal Capital Announces Line with Agstar

 

 

#### denotes press release----

______________________________________________________________

 

Leasing Companies continue to be affected by Code Red Worm spreaking

by users opening attachments.

 

URGENT!  PLEASE READ ENTIRE MESSAGE!

 

 

 Thank you to all employees who have heeded prior messages regarding virus

 alerts and remain alert to the threat of the new virus known as "Nimda".

 

 We must all continue to exercise caution when it comes to e-mail security

 and viruses.  Several private & public agencies reported the virus struck

 computers Tuesday in the United States.  Within the past 24 hours, "Nimda"

 has affected over 37,150 computers in North America and continues to

 propagate.

 

 HOW IS CIT AFFECTED?

 

 *       Web browsing has been temporarily disabled throughout CIT and will

 remain disabled until a cure is received from the vendor or alternative

 measures have been implemented.

 

 *       Approximately 48 Livingston servers have been infected with the

 virus and other locations are tabulating their results

 

 *       All CIT's E-Commerce websites remain online including www.cit.com

 Presently, our anti-virus software vendor has not yet created a signature

 file that fully cures this dangerous virus. Thereby, we cannot guarantee

the safety of our internal network hence the disabling of web browsing.  This

 measure is essential due to the fact that this virus may enter our network

 by employees surfing on infected web servers unbeknownst to the user.

 

 It is important for everyone to know that STS is working around the clock

to fight this new and dangerous virus.  We have created and tested several

 homegrown programs in an attempt to reduce the spread of the virus and its

 impact on our networks.  In addition, contingency plans are in full effect

 and we are working with the Business Continuance Group to identify the

 criticality of our resources and the priority at which these resources

come back online.

 

 Should you receive a pop-up message advising the detection of the virus on

 your computer, please run the virus scan immediately!  Should you need

 assistance running a virus scan, please contact the Customer Service

Center.

 

 In conclusion, if you have any questions or concerns, please contact the

 Customer Service Center (  <mailto:call.center@cit.com>

 call.center@cit.com), Information Security (

 <mailto:information.security@cit.com> information.security@cit.com) or

 CITVirusAlert (  <mailto:citvirus@cit.com> citvirus@cit.com) mailboxes.

 

 Thank you for your cooperation.

 

 

 

 

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Financial Federal Corporation Announces Record Earnings For The Fiscal Year Ended July 31, 2001

 

 

NEW YORK--(BUSINESS WIRE--Financial Federal Corporation ("FIF" - NYSE), a nationwide, independent financial services company specializing in equipment finance and leasing for middle market businesses, announced record net earnings of $31,616,000 for its fiscal year ended July 31, 2001, an 18% increase over the $26,722,000 earned last year.

 

Diluted earnings per share for the fiscal years ended July 31, 2001 and 2000 were $1.75 and $1.52, respectively, an increase of 15%. Finance receivables originated during the fiscal year aggregated $736 million. Finance receivables outstanding, before allowance for possible losses, increased 16% to $1.3 billion at July 31, 2001 from $1.1 billion at July 31, 2000.

 

Receivables on non-accrual were 2.6% of total finance receivables at July 31, 2001, compared to 2.2% at April 30, 2001 and 1.4% at July 31, 2000. Net credit losses for the fiscal year, expressed as a percentage of average receivables outstanding, aggregated 0.17% compared to 0.06% for fiscal 2000. Delinquent receivables (more than 60 days past due) as of July 31, 2001 aggregated 1.9%, compared to 2.3% at April 30, 2001 and 1.5% at July 31, 2000.

 

Paul R. Sinsheimer, CEO, remarked: "We extend our heartfelt sympathies to those who have suffered the loss of loved ones in the attack on America on September 11, 2001. We commend the efforts of the police, firefighters, emergency and other workers and volunteers who are selflessly giving of themselves to rescue others.

 

"While the events of the past week have not directly affected us, it is difficult at this time to determine how these events will impact our business, the capital markets and the overall economy."

 

This document contains forward-looking statements, involving management assumptions, risks and uncertainties. Readers are referred to the documents filed by the Company with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.

 

Financial Federal Corporation specializes in financing industrial, commercial and professional equipment through installment sales and leasing programs for manufacturers, dealers and end users nationwide. In addition to its New York office, the Company has six full-service operations centers in Texas, Illinois, New Jersey, North Carolina, Georgia and California, and numerous additional marketing locations throughout the country. For additional information, please visit us at www.financialfederal.com.

 

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BalboaCapitalBitesMe.com 

   http://www.leasingnews.org/images/Jerry/Welcome.htm

 

Leasing News has contacted Balboa Capital. The company position

is they do not even want to say they have” no comment.” They do not want

to make any comment to Leasing News whatsoever. Period. editor.

 

~~~

 

New Complaint

 

Jerry isn't the only one with a complaint against Balboa. The following

events started with an application dated July 2001.

 

Balboa Capital provided a commitment letter to an applicant we were both

both wooing. Their rate factor that worked out to 13.7%. They doc'd the deal

at 27.5% and then sent a modification when the payment was questioned,

reducing the payment to 18%. I have copies of the commitment letter,

contract and modification to document these allegations. This all happened

in August 2001.

 

When the deal closed, included in the itemization of closing charges was a

$651.00 "Loan Fee" that was the customer was told was to cover documentation

expenses. The customer subsequently received an invoice for UCC filing fees

and another invoice for the inspection fee.

 

According to the customer, he was told the rate "works out to a little over

9%" which is why he took Balboa's deal over mine without comparing payments

(I told the customer accurately that my rate was 10.2% and backed it up with

an amortization schedule). The customer also claims he was told that there

was no prepayment penalty, which he took that at face value. He should have

read the contract which plainly states that it is non-cancellable and that

all payments will be collected. When the customer called to get a payoff, he

was told, "there are 46 payments due, that's your payoff".

 

I have urged the customer to have his attorney contact Balboa regarding the

"bait and switch" on the rate. Needless to say, this businessman has learned

some painful lessons and I am sure that there are plenty of his friends that

will probably never lease again, and if they do, it certainly won't be with

Balboa.

 

If you have the contact information for Christopher Parsons (Balboa's

attorney per your news piece), I would like to give it to this customer so

that he can pursue a direct contact if he chooses.

 

Thanks... JB

 

John Bergwell

Fin-Con Capital, LLC

913-219-5169 Phone

913-498-0087 Fax

www.fin-concapital.com

 

~~~

 

.I've seen the light and now it **** me off when i hear that a business will not lease any more because of what happened to them at  balboa....they think that

all lease co's are the same and it hurts the total industry.

until more people (consumers)speak up about unethical lease co's nothing

will be done......but at the same time nobody wants to get sued....including

me.  therefore, i thank you for your hard work in this industry and please

keep it up.

 

Name Withheld

 

It always has amazed me that while many funding sources

know that a lessor is less than ethical they either cut them-off and give

other funding sources good references or worst yet continue to deal with

them. Balboa is a perfect case of this. I could name many others as bad or

worse. Anyone in the industry already knows about Balboa before all this .

it  is just now coming to the light of day. The worse part is that lessees will

be turned off to any future leasing.  I hope we can turn this trend around.

 

Name Withheld

 

I am a former sales person of Balboa Capital.  The business practices that

took place in that corporation is enough to make you loose your lunch.

The two owners could possibly write a book on the art of deception and

theft.  Sales meetings were held just to discuss how to write more FMV

transactions knowing that the client wanted a $1 out. Compensation was based

upon the % of FMV business a sales person wrote.  Since the turn over rate

is about 100% by three years in their sales department.  The owners kept

every dime of the FMV generating about $300k a month.  They have built a big

wheel and it will take many years to dismantle it.  I believe in Karma and

there will be alot of bad Karma coming there way.

 

The rest of this industry suffers with every deal that Balboa writes.

 

Former employee....

 

 

A Current Balboa Capital Employee:

 

( Response to be kept anonymous as it is not necessarily the opinion or

comments of management )

 

I can confirm that "Yes" these practices did exist, but they were not wide

spread, were not instructed from the Top down and haven't existed for quite

some time.   I know that many of these "ex-Balboans"  replying to your

emails are those fired from Balboa for these very acts.  Many of these

ex-disgruntled sales reps screwed their clients by discarding the $1 buyout,

were fired as a result.  They then started their own company or went to work

for others where their only advantage to win the sale was to "bad mouth"

Balboa for the very tactics they used and passed them off as the "norm" at

Balboa.  A cowardly way to win a deal. Too bad they weren't good enough

sales people to win the deal on merit and salesmanship.    I don't know if

Mr. Gonzales was mislead in some way, I certainly hope not. But I can say

I've personally been accused by a lessee of doing the same but was able to

quickly provide proof from proposals and sign commitment letters that the

deal was in fact negotiated as FMV.   My customer tried to take advantage of

the situation and avoid their legal obligation by spreading similar false

rumors.   A perfect case of the lessee being the unethical one and not the

leasing person.

 

In response to "such practices have to end".   They did end a long time ago.

Balboa Capital has not had a separate buyout addendum from the Master lease

in over 6 years.  And that change was a direct result of realizing such

practices were taking place.   Balboa was one of the first to implement the

"plain English" lease documents with the buyout included on the front page

in clear view.  To be so desperate as to bring up 6+ year old business

practices should be embarrassing to those suggesting them.

 

We all have our stories of people using questionable sales tactics to win

deals.  Sometimes it's the hardest part of the job,  selling against these

"bad apples" in the industry.  But to discriminate against an entire group

for the questionable practices of a few is ignorant at best.   One must also

consider the source which in this case is mostly ex-disgruntled employees

with a grudge to bear.   Was it tolerated from the top?  I don't know, but I

can assure you it was never taught, preached nor encouraged and those caught

were fired.  To imply otherwise is absurd conjecture.

 

>From many of the comments I've read I can discern who the authors are and

can say with a fair amount of assurance that several of them were the very

people that were fired for such unethical practices.   It is also important

to note that many of the same people have recently been named on your list

for carry on these questionable practices at other companies.   Again, too

bad they can't sell on merit and product and have to resort to questionable

tactics that adversely effect the entire industry.    It's ironic that we're

all forced to defend ourselves against those lessees and vendors that

generalize all leasing companies as being unethical because of the actions

of a few, yet turn around make the same generalization about one of our own.

It's all quite hypocritical.

 

We all need to take an active roll in cleaning out the bad seeds and

practicing good ethical business.  In such a strained credit economy the

deals are fewer and further apart and harder to get approved.  It's in times

like these that the weak will succumb  to their old habits and effectively

"smoke" themselves out.  That's when we'll see who the real perpetrators

are.   I'm certain it will not be a Balboan.

 

 

Name With Held

 

--------------------------------------------------------------------------------------------------

 

Excerpts from the Public Equipment Leasing Association Thursday

Newsletter ( please note, only members can access the website with

their password., however this information you may find very useful

in this form. editor

 

********************************

ELA E-Leasing Newsletter 9/20/01

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1.    ELA Urges Congress and the Administration to Help Airlines Following

Terrorist Attacks

******************************

In a letter to the Congressional leadership and high ranking Bush

Administration officials, ELA President Michael Fleming expressed ELA's

support of "policy initiatives which are intended to financially stabilize

the U.S. commercial airline industry in light of the attack on the United

States that took place on September 11, 2001." The letter was sent following

a conference call on Wednesday with members of the ELA Aviation and Large

Ticket Business Council Steering Committees who unanimously agreed that ELA

should convey a message in support of the airline industry to government

officials. In the letter, Fleming also urged Congress to clarify the

industry's potential liability pointing out that investors need certainty."

With the airline industry posting losses in excess of $1 billion in the

first half, any further dramatic contraction would certainly have a negative

effect on aircraft residual values and the numerous ELA member companies who

have provided tens of billions in lease financing to the airline industr