Leasing News Regulation Questionnaire Answered

By Kit Menkin

To answer some of the questions received after the results of the poll:

Over 400 responses were received. This was an “average” return, although we have had up to 600 on keeping “advance rentals.” To one view, it may have been “below average” as this was the first time we ran it for three days in the newsletter ( four days on the web site.)

We did eliminate the “no” votes who we thought were not in the leasing industry, as we suspected they were lessees with an “axe to grind.” We contacted over 40 e-mail addresses that had no identification from a leasing enterprise, eliminating 20 who did not respond, which was under 5% of the total vote. We assumed they were not in the leasing industry.

This was not a scientific poll, and perhaps we should have put
a third category: state government, federal government, leasing
association. There were many who stated they felt it was up
to the leasing associations to regulate the industry.

Unfortunately, not all those who don't follow “good business practices,”
are members. Most of those who keep “advance rentals” and “deposits” are not members, nor are the new brokers or salesmen in business. In addition, each of the associations and foundations have their own process, reacting by “formal” complaint and a hearing process to make their determination as to “conduct.”

It is true, on the other hand, several of the companies in the news, such as Commercial Money Center, belonged to leasing associations,
the vice-president, who was also in charge of sales, remained
after the demise as “regional chairmen.” In one instance,
the person who arranged the leases with the funding sources,
was president of a leasing association.

It should also be pointed out NorVergence was an active member and advertiser at the Equipment Leasing Association. They were not
alone in being active in a leasing association for both funding
and new sales from new brokers. It is no secret companies such
as DVI, MSM Capital, RW Professional, 1Lease, Metrolease, and others were sponsors, active participants.

To expect the leasing associations and foundations to “police”
the industry would be a difficult task. In fact, it would
be almost impossible, as they don't have control over non-members.
There would be definite liabilities if they were to so attempt.

Perhaps as important, they are a volunteer organization ,
where the directors are not paid, nor are the
committee chairmen or members, and may meet quarterly
as a committee or just twice a year at conferences.

Yes, they can meet by telephone or in an internet chat room,
but if there are documents to review, or a formal hearing
to be held with the complainant and member present,
this certainly would be a laborious procedure. It is also
asking them to make judgments on long time friends
or close associates, certainly a conflict of interest.

As important, it is the leasing association's goal to help
its members, help their company grow and prosper,
not to push them out of business.

The question then is will the industry allow the government
to make its own rules and regulations of the industry, winding
up as an adversary, lobbying its interest, or to take lead
in helping to formulate and legitimatize leasing as the
account board has, as attorneys have, as real estate agents
have, and others who value their profession and who is
allowed to practice in it?