WASHINGTON, May 17, 2004... The auto finance industry's push for a national standard that provides specifications for auto finance electronic contracting took a major step forward on May 14 when the standard received approval from an accredited standards developer for financial services.

Under the standard, initiated by the American Financial Services Association (AFSA), finance companies and other auto financing institutions that purchase contracts from dealers will have criteria on the creation, storage, certification and assignment of "electronic chattel paper" (e.g., retail installment sales contracts and leases evidenced by electronic records) as well as on the establishment of control or possession of this electronic record from the point of its creation by a dealer through its assignment, if applicable, to other parties.

"E-contracts will allow companies to save millions of dollars through eliminated paperwork and storage as well as through improved personnel efficiencies," said Randy Lively, AFSA president and chief executive officer. "The time needed to process originations and securitizations will drop dramatically."

The Accredited Standards Committee (ASC) X9, Inc., the organization accredited by the American National Standards Institute (ANSI) to develop financial services standards, voted for the new standard, culminating a six-week voting period that began April 2nd and a developmental process launched by AFSA in January 2003. The standard now moves on to its final stage: a 45-day public review period. Upon completion, X9.103, Motor Vehicle Retail Sale and Lease Electronic Contracting will become a national standard under ANSI.

Cindy Fuller, ASC X9's executive director, said her organization was pleased with the standard. "Other industries may also benefit from the concept this standard sets and perhaps realize cost savings similar to the automotive and finance firms," she added.

Founded in 1916 and based in Washington, D.C., AFSA is a national trade association for market funded financial services firms that provide credit to consumers and small businesses. Its more than 400 members include consumer and commercial finance companies, auto finance/leasing companies, mortgage lenders, credit card issuers and industry suppliers.

The Accredited Standards Committee X9, Inc. is the only industry wide forum that brings together bankers, securities professionals, manufacturers, regulators, associations, consultants and others in the financial services arena to address technical problems, find the best solutions and codify them as nationally accepted standards. ANSI accredited ASC X9 in 1984.