As an Independent who's enjoyed coming to these conferences over the years, it feels a little strange to stand before you as AFSA's chairman. Still, it's great to be back among so many friends and to have this role in the same year as the Independents section's 20th anniversary. My first order of business for today is to extend my congratulations and best wishes on this important occasion.

In addition, I've been asked tell you about some of AFSA's ongoing initiatives that might be of interest to the section. Before I do that, however, I hope you'll permit me to make an observation or two about the last twenty years.

Certainly, huge changes have occurred in the world and transformed the way companies do business. The consumer finance industry has not been immune to all this change.

We've seen countless mergers and acquisitions, along with the disappearance of some well-known names in the business. New companies have emerged and established ones that weathered the storms are stronger as a result.

We've seen advancements in technology that allow lenders to better assess credit risk, opening up borrowing opportunities for more people. Credit decisions that once took days to make can now be done in minutes.

We've seen the arrival of the Internet and its evolution to the point where many customers want to do business with us online.

We've seen the birth of the secondary market and a blurring of lines between financial services providers. And we've seen a wide assortment of credit products and services appear in the market place.

As would be expected, the association has changed along with the industry it represents. In 1983, the National Consumer Finance Association became the American Financial Services Association, reflecting the association's membership expansion to diversified firms and non-traditional consumer finance companies.

Since then, we've become even more diverse, with mortgage companies, credit card issuers, auto finance companies and commercial lenders among the mix. In recent months, Ameriquest Mortgage Company, Cresleigh Bancorp, Hyundai Motor Finance, Saxon Mortgage and Option One Mortgage have joined the fold.

When Irwin Holzman, Jack Haas, Jim Parks, Bill Yeager, Bill McCormick, Bob Raley and a handful of other Independents began the Independents section way back when, they had no way of knowing they were ahead of everybody else. AFSA has since used the concept of "customized services for industry sectors" to create the specialty divisions that now exist today for mortgage, auto finance and credit card companies.

Yes, there's no doubt that we've seen a lot of changes. But in putting together my notes for this talk, I couldn't help thinking of that old saying, "the more things change, the more they stay the same."

Today, just as they did twenty years ago—and a lot longer than that—the consumer finance industry and its critics continue to debate how to best serve borrowers of lesser economic means, while protecting them from abusive lenders and maintaining their access to legitimate credit. This long-running debate is the core of a key issue that AFSA and its members are involved with today—namely, the predatory mortgage lending issue.

Many of the legislative proposals proliferating throughout both the cities and the states—like the one in my state, South Carolina—are downright frightening and do little to correct the actual problems. We've all been aghast at what's happening in Georgia.

Let me quickly update you on some actions that AFSA is undertaking to address the situation.

At the city level, AFSA's legal department, working closely with legal counsel at member companies, remains active in challenging mortgage lending ordinances that are overly restrictive and encroach on state authority. Most recently, the association filed suit against the cities of Los Angeles and Toledo, Ohio.

At the state level, AFSA's state government relations operation has positioned itself to be the focal point for conversations and coordination among the key groups at both the national and state levels. As we've learned the hard way, we, as an industry, fare better with a unity of thought and coordinated action—rather than through fragmented efforts. Rick Covert and the State Government Affairs' mortgage lending subcommittee are in almost constant contact and coordination on various bills.

While many member companies know about AFSA's Internet-based system for tracking legislative proposals throughout the country, we still need to get the word out to others.

At the federal level, AFSA staff and other industry representatives provided input for a mortgage lending bill introduced February 13th by Congressman Bob Ney of Ohio. AFSA's legal staff continues to maintain a good working relationship with the Federal Reserve, the banking agency with regulatory oversight for HOEPA (the Home Ownership and Equity Protection Act).

At the same time, the CEO task force—a small group of chief executives from mortgage lending companies—is alive and well. The Independents have been well represented on this task force, with participants including Ken Hoerr of Heights Finance and Ben Cheek of First Franklin Financial.

Let me just say one other thing about predatory lending before we move on. It is not just a mortgage lending issue. If you believe it doesn't affect your company, you are very much mistaken.

The predatory lending attack is spreading to every segment of the consumer finance industry. First, it was second mortgage and auto lenders. Then, first mortgage lenders and credit card issuers. You can bet personal loan companies will be next. And it's not just consumer finance companies—banks and other lenders are coming under fire as well. All of us here need to be aware of this.

Certainly, we've got other legislative issues on our plate—perhaps bankruptcy reform and definitely renewal of certain provisions within the Fair Credit Reporting Act. At the federal level, AFSA considers FCRA to be the highest priority for 2003.

In other areas, the AFSA Education Foundation is putting the finishing touches on Money Skill, its interactive electronic textbook (E-text) on basic personal finance skills. While designed for high school students, adults can benefit from it as well. The E-text is being Beta tested in several state school systems and, thanks to Charlie Walters, South Carolina is one of them. The program's official launch is slated for this fall.

The Foundation also has a new consumer brochure on "Personal Loans" produced especially for Independent operators. If you haven't done so already, I'd encourage every Independent here to order quantities for distribution in your branches.

Another new brochure released last month covers the ins and outs of vehicle financing. For this initiative, AFSAEF partnered with the National Automobile Dealers Association (NADA). The brochure underwent review by the Federal Trade Commission, resulting in its logo appearing on the back and the posting of the brochure among the agency's online consumer resources.

In addition to those related to consumer education, legislation and legal developments, AFSA has a number of other initiatives underway:

• The association is developing voluntary standards for electronic contracts, starting with the auto finance sector of its membership.

• AFSA's membership publication, Credit, has a new look. In response to readership surveys, the new Credit has a streamlined format and a stronger emphasis on harder hitting news. If you haven't seen a copy, you can do so by visiting AFSA's Web site at www.afsaonline.org.

• Speaking of the AFSA's Web site, this underwent a major renovation late last year to make it more attractive, consumer friendly and useful to members. The site can be used to do things like access the Law Board and register online for a conference. There is also an enhanced calendar of events that includes state association meetings.

While there isn't time to cover everything, I hope I've given you an idea of the types of initiatives in the works at AFSA. Let me offer one closing thought:

Our core business continues to be offering credit to people who often have imperfect borrowing histories. Far too many legislators and other policy makers continue to have misperceptions about what that means, and a limited understanding of how our industry operates.

Now more than ever, they must hear our message: That when it comes to lending abuse—we need to protect credit availability while pursuing voluntary consumer education and other effective approaches to the problems. AFSA is conveying this message, but it can't do it alone.

We, the companies, must do our part as well. So I'm putting the welcome mat out for any representatives from non-member companies who might be in the audience today. We invite—and encourage—you to join forces with us.

Again, congratulations to the Independents Section on its 20th anniversary and thank you for allowing me to join you this morning.