Many leasing men view with alarm the entry of national banks into the leasing field. They fear that the banks, which recently received permission from the Comptroller of the Currency to lease equipment, would represent serious competition if they decided to lease vehicles.

I believe that this fear may be greatly exaggerated. In the first place, while several banks have announced their intention to lease equipment, none thus far have announced intentions to lease vehicles. Although this could change overnight-the American National Bank and Trust Co. of Chicago is ready to sign a deal to lease 350 trucks-the competition would not be monumental. Secondly, bank entry into vehicle leasing might give the entire industry new stature in the financial world. It cannot be denied that, except in a few cases, leasing companies do not enjoy the same rate benefits available to other commercial enterprises. Possibly this stems from the relative newness of vehicle leasing. Possibly it stems from the small percentage of leasing companies that, for lack of proper management or proper industry knowledge, have failed.

I have not yet fully made up my mind as to whether banks should be prohibited by law from entering the vehicle leasing field. The question of free enterprise is involved. If banks enter leasing and do not stamp out competition with undue pressures and if vehicle leasing by banks does not represent a conflict of interest, then it would simply be a matter of increased competition. However, if banks use their economic power as a club, then the government has no choice but to prohibit banks from leasing vehicles.

If banks go into the vehicle leasing field, it might readily become apparent to bankers that leasing is an attractive business venture and that under competent management, the risk factor is no greater than in any type of sound commercial business. Who knows, banks may learn that vehicle leasing is so sound that it might mean more leasing companies could qualify for the prime rate of interest.

Another factor to be considered on the subject of banks in leasing is that authority is the result of an administrative order by Comptroller of the Currency James J. Saxon, probably the most controversial man ever to hold that post. Saxon has constantly strived to increase the scope of operation of national banks. The decision on leasing is just one example. Because of Saxon's activities, it is possible that Congress may pass legislation in the next session to curb the expansion of national banks.

Also on the subject of leasing: I have received a number of letters suggesting AUTOMOTIVE FLEET is pro leasing. The accusations generally are based on the amount of space devoted to leasing articles. I would like to state that AUTOMOTIVE FLEET is not pro anything except pro car fleet. If leasing seems to get more attention in our news columns, it is only because leasing is making itself felt in all forms of fleet activity. And that is our job-to report and interpret the news.

 

 

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