Associates First Capital Corporation Responds to Federal Trade Commission Action.

Business Editors

DALLAS--(BUSINESS WIRE)--June 22, 2000

Associates First Capital Corporation (NYSE:AFS) made the following statement today in response to reports of a Federal Trade Commission action:

"The Associates shares the FTC's belief that all consumers deserve loans with interest rates that are based solely on objective criteria. We are pleased that the FTC's review of our business in the Detroit area found no instance of unfair pricing of loans made by our employees directly to consumers. Our dispute with the FTC centers around its statistical analysis of loans originated by independent brokers in that area. We disagree with its conclusions and the assertion that our company is responsible for actions by independent brokers.

The FTC's case is based entirely on a statistical review of broker activity in the Detroit area from mid-1995 through 1996. Independent experts have reviewed the FTC's statistical analysis and found significant flaws in its conclusions that focus on just three of the 90 brokers with whom we conducted business. Because these types of errors can occur in statistical evaluations, it is generally accepted that such analysis should not be the sole basis for legal claims. In addition, it should be noted that the three brokers in question sold loans to many other financial institutions in addition to our company during this time.

Our interest rates are determined by a borrower's credit history and other objective criteria that help us decide the risk associated with a loan. Our company is the only lender to offer all of its real estate customers substantial interest rate reductions in exchange for their on-time payment. This enables thousands of people to lower their costs of borrowing and improve their ability to qualify for lower interest rates in the future."