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                                                                                   Moderator: Nancy Meidenbauer
                                                                                         04-16-07/11:00 a.m. CT
                                                                                         Confirmation # 5413722
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                                 Moderator: Nancy Meidenbauer
                                         April 16, 2007
                                         11:00 a.m. CT

Stanley Provus: Well, this is Stan and I’m going to kind of moderate this. The format I wanted to do today
        was to first go through these questions with the panel – us, which will be Susan, Jason, and Dave,
        and kind of ((inaudible)) categories that each – that the questions fall under and those are policy
        decision making, underwriting and other policies, loan servicing and monitoring procedures,
        marketing and lessons learned.

        And what I wanted to do was first ask each of the panelists a question, get their response and then
        when we’re done with all the questions for a particular category, then we want to open it up to other
        folks who are listening in. OK?

Male: Yes, that’s fine.

Female: OK.

Stanley Provus: Nancy, are you there?

Male: Apparently she’s just in listening mode.

Stanley Provus: OK. I think somebody is recording this as well. But I guess I don’t know for sure at this
        point. Anyway, let me go to the first set of questions then and let me just briefly read the question.

        Question one, this is under the category of policy decision making process, what is your decision
        making process for providing vehicle loans, vehicle loans with modifications and modification loans
        only? And if you could give us some case studies, that would be helpful. I’ll start with Susan.

Susan Tachau: What’s our process for approving vehicle loans? Well, we …

Stanley Provus: Well, more the policy …

Susan Tachau: The main thing is we don’t have some of the limits that some of the other states have. So,
       I think that’s an important aspect. If you’re going to do vehicle loans, you’ve got to be able to go up
       to a minimum of $25,000, which is how much a vehicle by itself without any other partner in funding
       will cost.

        So for us, we go – if you need a guarantee which means you have poor credit and did not qualify for
        a traditional loan, we go up to $25,000. So you can purchase a new vehicle or a used vehicle and
        we help to try to get you to have other funding from another resource for the adaptation. So, like
                                                                                     Moderator: Nancy Meidenbauer
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        from our office of Vocation Rehabilitation, from the MS Society, from ALS, from wherever, we’ll try
        to partner that funding.

        If, on the other hand, you have fairly traditional credit, then we will go up to $60,000 and that will
        allow someone who needs a vehicle and the adaptation to be able to put together both of those
        funding. Does that answer the question?

Stanley Provus: A little bit. Let me put it another way as an example. In Maryland, as an example, I got this
        from (Tony Rice) earlier, their policy whether or not they will make a vehicle loan or vehicle loan
        with, you know, various adaptations, a borrower’s got to meet certain criteria in terms of, for
        example, there for a (lawful) vehicle, must be used to transport the individual with a disability to
        ongoing medical, psychological, physical therapy and related appointments at least three times

Susan Tachau: No, we do not – in Pennsylvania – we are completely consumer directed.

Stanley Provus: OK.

Susan Tachau: If someone who has a disability or an immediate family member with a disability wants to
       purchase a vehicle for whatever reason, even if it is to go shopping once a month, that’s OK with us.

Stanley Provus: ((inaudible))

Susan Tachau: Only criteria, is they have to be able to afford to repay the loan and that gets trickier if you’re
       only on SSI.

Stanley Provus: OK, we’re going to get to those questions later under “underwriting”. Let me ask Jason the
        same question.

Jason Luciano: We’re very similar to ((inaudible)) with that. We do have a criteria of the vehicle needs to be
       primarily used by or for the person with the disability. So, just because your mother has a disability
       doesn’t mean that you would then be – get a vehicle loan through us for your own personal use.

        But really, we don’t have very strict ways of overseeing that. We just ask for the person to assure
        us with that on the application itself.

Stanley Provus: Yes. Hi, Dave, what about you?

Dave Matheis: Well, I have a similar explanation of our process, but I – we don’t treat the vehicle loans any
      differently from any other loan. You know, the board decides (assisted) technology then it goes to
      the bank, and the bank responds with a synopsis of the credit and makes their recommendation of
      whether we should make the loan or not. And if they recommend against it, then the board can still
      make their loan if they think it’s worthy. Of course, the vehicles are high ticket items so we take big
      risks when going against the bank’s initial decision. But, we’re willing to do that.

        We have a $25,000 limit, so our upper limit is at Susan’s lower minimum basically, and we do a lot
        of, like Susan said, accommodations with third-party funding. We do require, in the case when a
        third party is involved in doing the modification that the applicant presents some proof that that’s
        going to be done. And since most of those are ((inaudible)) rehab consumers, we’ll take a copy of
        the individualized plan from employment that says that the vehicle modification is part of the plan
        for employment. That (surprised) us in that regard. If we have that then we’ll go ahead and make
        the loan for the vehicle itself.

Operator: Pardon the interruption, who has signaled for assistance?

Nancy Meidenbauer: This is Nancy. I signaled. Could we go offline, you and I?
                                                                                   Moderator: Nancy Meidenbauer
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Operator: Yes, of course. One moment.

Dave Matheis: Yes, finally – I know in some states we do require some modification to the vehicle is going
      to be made for a person with a disability even if it’s only hand controls. That’s basically our only
      requirement and that the assistive technology of the vehicle is going to improve the quality of life of
      the individual. That’s basically our requirements for a vehicle loan.

Stanley Provus: OK. I think question two was how do you decide if the vehicle is (AT), you guys essentially
        already answered that.

        Let me go to question three, I’ll start reverse order this time. I’ll start with Dave. Do you both new
        and used vehicle loans?

Dave Matheis: Yes, we do. We do – because our $25,000 limit, we can’t – that may limit the types of new
      vehicle we can do. But since most cases it’s just for the vehicle and a third party provide the
      funding for the modification, we can do that with new vehicles and stay under that $25,000 limit.
      But, you know, I’d say we’ve done plenty of both.

Dave Matheis: With the used vehicles, do you have an age limitation or mileage limitation?

Dave Matheis: No, I think the bank sometimes wishes we did, but we did do a vehicle for ($4,000) once that
      was a van. I think it went outside what the bank wanted to do.

Stanley Provus: OK. Let me move on to Jason, same question both new and used vehicle loans?

Dave Matheis: Yes, Massachusetts will do both new and used vehicle loans. On new vehicles, we will go
      up to eight years. And for used vehicles, up to 50,000 miles, we’ll go up to seven years in terms of
      repayment length. We do have a very frank conversation with each applicant who’s interested in
      that length of repayment pointing out what actually means to be upside down on a vehicle for that
      amount of time. But with that understanding, we will go ahead and honor that request.

Stanley Provus: OK. Susan?

Susan Tachau: We also do new and used. We don’t go as high as Massachusetts. Our new vehicles are
       seven years; used, six. We have essentially for used vehicles, we’re saying 50,000 miles for five
       years, but we make exceptions. And exception would be if a car has been pretty much sitting and
       driving to church on Sundays, but it is eight years old that has 20,000 miles, we have given that kind
       of a loan.

        So we’re not hard and fixed, but we are – we are fairly hard and fixed on the number of years we go
        out. We do not go out for vehicles beyond seven.

Male: All right, we go to eight, since that’s already been mentioned. Ours will go up to eight.

Stanley Provus: OK. Now, start with Susan, I think all three of you do guarantee programs, is that correct?

Male: Yes.

Stanley Provus: OK. Well, maybe you want to comment, beginning with Susan, why a guarantee program
        for vehicle loans might be better ((inaudible)).

Susan Tachau: A guarantee program, the reason why it’s very important to us is that we’re not using all of
       our own money so that when we’re doing a guarantee right now, that means we have made the
       decision that this person does have the ability to repay this loan, but the bank does not make that
                                                                                    Moderator: Nancy Meidenbauer
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        same determination, and we are only required to put up 50 – take a risk on 50 percent of that loan

        So a direct loan would mean we’d have to put up 100 percent and your criteria may be different. I
        don’t know. But it expands the amount of money – the resources that we have.

        The other reason we do do a guarantee is that the bank has already come back to us and said this
        person does not qualify as a traditional borrower, and yet we believe that this (AT) is a legitimate
        request and legitimate need, and they do have the ability to repay.

Stanley Provus: OK. What …

Susan Tachau: Just to throw out a question for the audience when it’s time, do many people other than
       those who are CDFI do a direct loan for a vehicle? That’s a lot of money to be putting out.

Stanley Provus: Yes, OK. Let me go on to Jason in terms of why a guarantee might be better than direct

Jason Luciano: We, in Massachusetts, we don’t do direct lending out of the initial grant money out of the
       seed fund for the program. When we talk about direct or traditional loans, that’s money that’s direct
       from our lending partner; it doesn’t need to touch our account at all except for the interest rate buy
       down. So with that clarification made in terms of Massachusetts, I would rather see a direct loan go
       through. We don’t have to assume any of the risk for it if that person defaults on that.

        If that person is not considered credit worthy by the bank, then obviously the guarantee component
        is vital to be able to assist to get the devices that they need. But we don’t do any direct, you know,
        funding of the entire amount. We will guarantee it and the bank will loan out their money and then
        decrease our guarantee to ((inaudible)) account proportionately as the payments come back.

Stanley Provus: Let me – let me – let me ask you all this question, follow on question, do you find what user
        ((inaudible)) at the guarantee program, who actually – were you have a liquidation, who handles
        that? And if a bank handles that or if you ultimately give it to repo companies, what has been your
        experience with that, Susan?

Susan Tachau: We’ve only had to do it a few times, and the first one time when we did it, we let the bank go
       and get the vehicle. That was a mistake. It’s easier for us to let that happen. It takes much less
       effort in the long run because then they handle all of the lien issues and the title issues. But the
       problem is they went and literally just sold it off, you know, and got only a couple of thousand dollars
       for it when in fact it was worth about 17,000.

        So the next time what we did, we’ve only had a few defaults. The next time what happened is we
        went and took the vehicle and then we resold it. The problem with that is it is a lot of work. But if
        you let the bank become the repo, they’re there just to get as much as they can and we lost all of
        our guarantee and they made a little bit of money, but it is a lot easier.

Dave Matheis: In Kentucky we let the ((inaudible)) just for the (reading) Susan mentioned that it’s just too
      much work and we don’t have the staff to fool with that, and you do lose a lot of money that way.
      The decision factors made outside the office that does our loans – our loans are done in
      ((inaudible)) and the repossessions are done in Cincinnati and there’s been a communication
      problem from time to time, and we have been bitten pretty hard on a number of repossessions. But
      we just don’t have the staff to do it on our own.

        We are a guaranteed program, as was mentioned and the main reason is that of the (bank debt)
        that are ((inaudible)) basically let the bank do all the work in service and loans.
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Stanley Provus: Susan, I thought I heard you say you would – you would really recommend handling
        liquidation yourself. Is that right?

Susan Tachau: If we had staffing. David’s exactly right. I mean, the issue is that if somebody goes into a
       default, it is – and the other assumption I need to just lay out, is that we do put a lien on vehicles.
       We put a lien on vehicles and home modifications over 10,000. If you don’t have a lien, it’s a whole
       lot easier if you decide to go and get it if you become your own repo man. The moment you put a
       lien on something, though, it is much more complicated and it does take staffing that many of us, I
       would say, all of us, are low on staff. And you just need to know that takes staffing time, but you
       lose money.

Stanley Provus: OK. Just for your information, in Maryland, they have a deal – that agency is a part of state
        government, and they have a deal with the state collection agency which after a vehicle is
        liquidated, if there’s still money owed, that state collection agency, which is government agency,
        you know, could withhold things like income tax refunds to help get back more money in a case of a
        liquidation. I don’t know if that’s a type of program that’s available in many states however.

        Related to this, let me ask this question, in trying to resell a vehicle, I’ve heard that’s quite difficult to
        get a warranty on the modifications. Susan?

Susan Tachau: We’ve never had that be an issue actually. When we have resold a vehicle, it hasn’t been
       one of the more complicated type of modifications. It’s been the lowered floor, the tied downs, and
       the ramp. I’m not sure we would do – or a lift, which is another easy thing to do. It has not been a
       need to try to do something around the steering and the brake system. If that were to be true, we
       would want some other kind of assistance, but it just hasn’t come up.

Stanley Provus: OK, how about Jason?

Jason Luciano: We haven’t run into that situation.

Stanley Provus: OK, Dave?

Dave Matheis: Well, we don’t get into reselling the vehicles, so we let the bank take care of it. I wouldn’t –
      I wouldn’t know in that case.

Stanley Provus: OK. At this point for this first set of questions, I’d like to open it up to other participants. So,

Operator: Yes, sir.

Stanley Provus: How do I – at this point, I wanted to for a while open this up to other folks who called in.

Operator: Certainly. We can open up the lines – just open up everybody’s line right now and everybody can
       be free to talk if you wish. Otherwise, we can just have them press star one and queue up
       individually one at a time.

Stanley Provus: Yes, I think we’d like them to speak one at a time.

Operator: OK, certainly. Well, ladies and gentlemen, if you would like to ask a question once again, it is star
       one on your touch-tone telephone to ask a question or make a comment. Once again, please press
       star one to ask a question or to make a comment.

        And nobody’s queued up as of yet. But, ladies and gentlemen, once again that is star one. And
        there appears there are no questions or comments at this time.

Stanley Provus: Let me make sure – they should be able to hear me, right?
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Operator: Yes, correct.

Stanley Provus: OK. Do any – do any of you have any unique policies on who’s eligible for a vehicle loan
        or who isn’t?

Susan Tachau: This is Susan from Pennsylvania. One of the issues we do struggle with from time to time
       is whether an unadapted -- a non-adapted vehicle is assistive technology. And often it will come
       down to how is the vehicle going to be used. In many cases, we have not accepted an unadapted
       vehicle as assistive technology, but an example where we did was a person, a parent whose child
       has autism and needs to take a whole bunch of stuff with them wherever they go, so needed a
       larger vehicle and actually took out the middle seat. That was an argument that we could persuade
       our board to accept and it was a guaranteed loan, but that was a place where a non-adapted
       vehicle was assistive technology and we did include it in our portfolio.

Stanley Provus: OK, if there’s no additional questions for these first four questions, let me move on to the
        fifth question with our panel, which is what is your relationship between your capitalization, that is
        your federal grant, your state matching funds, and your ability or willingness to make vehicle loans
        that might be responses to this question panel might include whether you have any dollar overall
        volume limit or the amount of vehicle loans as a percentage of your portfolio, that kind of thing. Let
        me start with Dave.

Dave Matheis: We kind of think that we’re, for the time being, pretty sufficiently capitalized. So we haven’t
      limit the vehicle loans in any way as part of the portfolio. Of course, we have the individual limit, that
      is $25,000 on a loan, which will curtail somewhat, but we have about a million-eight in the bank
      available for loan guarantees and basically, we have about a million-one right now that is
      guaranteed in loans. So that still gives us a little bit of room to work with.

Stanley Provus: OK. Jason?

Jason Luciano: We don’t have any limitations or minimums, maximums in terms of numbers, in terms of
       percentage. We basically – because it’s almost just like any other loan. If it meets the other criteria
       for eligibility for the program, the person can apply for it.

Stanley Provus: OK. Susan?

Susan Tachau: Likewise, we don’t have any maximum number of automobile loans. We do watch it
       because there are about two-thirds – almost two-thirds of our overall loan portfolio, so we continue
       to do outreach to those people because we figure if someone’s looking for a vehicle, they or their
       family will need other assistive technology, and although we only give one loan at a time, there may
       be other members of that family who would need a loan.

        So we try to balance a portfolio, but in reality in Pennsylvania, transportation needs are so great,
        and if there are little public transportation outside of the major cities that we’re not going to curtail
        the loans.

Stanley Provus: OK. Let me move on to the next question, are these types of loans made on a secured or
        unsecured basis? Do you employ any different underwriting policies for these loans relative to
        other (AT) loans that you make? And if so, what are they, starting with Susan?

Susan Tachau: No – no, different than any of the other loans. We look to make sure that someone can
       repay the loan and what we do before the application is sent to the bank is we talk to every
       applicant about this is what your monthly payment will be for how many months and we also talk to
       them about – especially with the vehicle, that it’s not going to be just a vehicle. That there will also
       be insurance, repair, gas, oil and that sort of thing.
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        So in reality, if you are only living on SSI, a vehicle is going to be a difficult purchase unless you
        have other people who are going to help you. But we have quite a few people who they are parents
        and at least one wager earner, and it’s very possible, excuse me, to extend the loan. We just make
        sure that people understand what the commitment is.

Stanley Provus: These are – all the loans are made are secured loans the lender files usage fee

Susan Tachau: Only on vehicles and ((inaudible)) over $10,000. But all of the vehicles do, yes, and we
       have a lien and we file it on everyone.

Stanley Provus: Are you a (loss) – in addition to the lender, are you (loss) payee on the insurance policy?

Susan Tachau: It depends if it’s guaranteed or not. If it’s a traditional loan, we’re not involved in the lien at
       all. It goes to our bank. If we are a guaranteed loan, then we are paid first because the bank has
       not made that commitment; has not …

Stanley Provus: This is really in the context more of the insurance on the call. Some of the programs in
        addition to the lender, get themselves as the loss (payee), and the reason they do that is
        sometimes lenders aren’t as diligent as they should be at making sure that the borrowers renew
        their insurance policy, and if you’re a (loss) payee, co-(loss) payee, you’ll be notified as well as the
        lender when someone has not renewed their insurance.

Susan Tachau: Well, we (haven’t) done that. I mean, one of the things that we’ve done with the guarantee,
       is make sure that we are listed first so that if someone goes bankrupt, and that seems to be more of
       our problem here is that some of the folks who had received a vehicle loan and they have a
       guaranteed loan, they have gone bankrupt and by us being listed first under the lien means that
       depending on whether which chapter they filed under, we are getting monthly payments.

        And we will know if someone is running into financial trouble because we get a weekly report on
        ((inaudible)) delinquent. So we are in touch with those borrowers after a couple of weeks.

Stanley Provus: OK, I’m going to get to that on the next question. Let me move to Jason on this question.
        Secured loans?

Jason Luciano: Well, other than what I talked about earlier, we are not a lien holder on the vehicle
       regardless if it comes directly through our lending partner or if we guaranteed for our lending
       partner. So everything – maintain ownership of the vehicle as second lien holder.

Stanley Provus: Do you use any alternative data for underwriting? And by that I mean things like – recently
        there’s been some attention to this whole area of underwriting, housing loans, using so-called
        alternative data which is borrower – of borrower’s rent payment history, utility, telephone repayment
        history as opposed to relying so much on credit scores or credit cards, particularly for borrowers
        who sometimes don’t – can’t even a credit score because they don’t have credit cards.

Jason Luciano: When our committee sees a “no credit score”, we kind of like that because if they have no
       credit score, they don’t have bad credit is the way they look at it.

Stanley Provus: OK.

Jason Luciano: Basically, the bank obviously would do more of a traditional credit evaluation. The review
       committee that would actually make a determination on whether or not this program would
       guarantee a particular loan, does look at alternative data. So it looks at things like rent. It looks at
       utility bills. It looks at ((inaudible)) they missed three months of payments on their credit cards, but
       that was five-and-a-half years ago. They look at that sort of information as well as asking
       applicants, him and herself, in their own words what was going on or is going on that prevents them
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        from making timely payments of their debt. All of that is incorporated into basically a judgment call
        as a committee at that point on whether or not to ((inaudible)).

Stanley Provus: Do you have any percentage of disposable income that you like to see? Like 20 percent or

Jason Luciano: The committee basically follows the same criteria that our lending partner has, which is 50
       percent. Anything over 50 percent debt to income ratio, they would start to look a little more
       hesitant about ((inaudible)).

Stanley Provus: OK.

Jason Luciano: But we have had guaranteed loans go up to I think 75 or 80 percent.

Stanley Provus: Debt-to-income ((inaudible)).

Jason Luciano: Yes, debt-to-income ratio.

Stanley Provus: OK. I was talking about disposable income, which is a little different, but that’s still good
        information. Susan?

Susan Tachau: Well, we would look at the same way Jason is, and just to twist around, because I think
       Jason and you were talking about the same thing. The debt-to-income is a 70 percent; that would
       mean you’re looking at 30 percent of disposable income, and we do look at that. And it’s our part –
       now the other thing is, and I believe, but I can’t be sure, Jason, whether you do this, if the
       application comes back from the bank saying they need a guarantee. We do run all three credit
       reports, and what that will tell us is open trade lines and how often people are paying what bills on
       time, 30 days, 60 days, 90 days, so that we are pretty confident that we have somewhat of an
       accurate financial picture. We do not ask people for bills or copies of bills. I mean, that’s an
       interesting idea, but we’re pretty confident about running those three credit reports that we have a
       general idea of how many credit lines are open and being paid on time.

Stanley Provus: OK. Operator, yes, are other folks still on the call now?

Operator: Yes.

Stanley Provus: OK. Do you guys have any questions you want to ask just on underwriting policies?

Operator: Once again, that is star, one if you’d like to ask a question.

Stanley Provus: OK. Well, hearing none, I’m going to just move on to question …

Nancy Meidenbauer: This is Nancy, I have a question.

Stanley Provus: OK.

Nancy Meidenbauer: Actually, operator, I’m wondering if you could open up all the lines so that – then if
       anyone does have a question, they don’t have to press that star, one.

Male: I thought everybody was asleep actually.

Male: We’re either doing an excellent job discussing things, or just nobody cares really.

Nancy Meidenbauer: So does anyone have any questions or comments at this point?
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Andrea Dimond: This is Andrea in Washington and I’m wondering if anybody has tried out any of those
       alternative credit reporting agencies. You know, I’m not sure, there’s one that we were looking at.
       Frances, do you know what it’s called, things that take into consideration rent, and bills, and those
       sort of things.

Frances: I think it’s the BPRC – (PRBC) Public Reporting Benefit Corporation or something like that. I’ll
       look and see on my e-mail here, but …

Male: I think it used to be call “Pay Rent Build Credit”.

Frances: Maybe that’s it.

Andrea Dimond: So has anybody tried those out?

Milissa Gofourth: This is Milissa in Oklahoma; no, we’ve never used an official other credit reporting
        system. I think I agree with Jason, we all utilize alternative credit ((inaudible)) to determine whether
        or not we can approve the loan if we’re guaranteeing it.

Susan Tachau: This is Susan, and I agree. Remember a couple of years ago we started talking about
       character scoring. I think knowing people’s individual – their story and how they’re going to use the
       loan and understanding what medical, you know, mishap may have happened, it’s all important in
       understanding the picture.

Stanley Provus: OK, any other questions?

        All right, let me move on to loan servicing and monitoring procedures. Here, our panel, I’d like you
        all to indicate how quickly you intervene when a loan goes into delinquency or default. How often
        you get reports from you lender and when you get those reports, if there’s a delinquency, how
        quickly you follow up with that borrower? Also, whether the case of delinquency, you offer any kind
        of budget counseling directly or through a third party source, and whether that’s been useful or not?
        I’ll start with Susan.

Susan Tachau: This is Susan. As I said before, we get reports weekly and we get to know our borrowers.
       So some people are kind of habitually 10 or 15 days delinquent, but they may always pay. They
       pay in full. So we just kind of watch them and make sure that that’s all that they’re doing.
       Otherwise, if …

Stanley Provus: Do you call them if they’re just one day late?

Susan Tachau: No, never.

Stanley Provus: OK.

Susan Tachau: We’ll wait until closer to a month and then we will see – depending on also the device. If it’s
       a vehicle and it’s a pretty expensive loan, we’ll probably wait for a month because the late charges
       will start accumulating and bury somebody, and we’ll try to find out what’s going on. If, for example,
       they’ve lost a jog or they’ve been sick, we’d offer to make rescue payments.

        For some other ones of our loans, we’ll call more quickly because once a late payment starts
        coming on, it can be almost as much as the payment itself, and we want to stop that.

Stanley Provus: How many rescue payments will you make? Do you have a policy on that?

Susan Tachau: We will make up to three for three months at a time, and we will – we will look and see what
       the history is. So if we’ve made three payments it looks like every year, then we kind of stop that,
       and then we’ll pay off the loan and have them pay us directly.
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Stanley Provus: Just add those …

Susan Tachau: Yes, add those at the end of the loan, but that hasn’t really occurred often at all.

Stanley Provus: OK. So they’re not immediately amortized is what you’re saying?

Susan Tachau: Yes.

Stanley Provus: OK. How about Jason?

Jason Luciano: We intervene after 30 days. It’s not really considered a serious lateness by credit reporting
       – by credit agencies, my understanding anyway until after it hits the 30 day mark.

        So we, much like what Susan was saying, we get weekly reports from our lending partners that tell
        us John Smith is 17 days late. So we know, you know, the next couple of weeks, we’re going to
        have to keep an eye on Jim Smith and see if he just got the bill, lost in the mail or he forgot to pay
        that month.

        We don’t do any budget counseling before guarantee. If it comes down to it, we can offer budget
        counseling to someone whether they are turned down completely for a loan through the program be
        it traditional or guaranteed. Or we can help someone if they’re running behind falling into trouble,
        we can offer credit counseling for them. That’s through an independent group, but we do subsidize
        for the person so it doesn’t have a cost to them.

        We also have rescue payments like Susan was talking about in Pennsylvania. Our policy is a little
        different. We will offer rescue payments twice during the life of the loan. We’re not allowed to give
        them more than two rescue payments. Each of those payments can cover two or three months
        catch up. So if someone is 85 days behind, we can give them three months of payment, have them
        caught up and ((inaudible)) days late as of their payment. We can do that twice in the life of their
        loan. After that, we’re not able to step in and make any more payments for the person.

Stanley Provus: How effective has the budget counsel ((inaudible)) when you have used it?

Jason Luciano: In Massachusetts, not one person has taken advantage of it.

Stanley Provus: OK. That answers that. Moving onto Dave.

Dave Matheis: We actually let our lending partner take care of the delinquencies. They contact the
      borrowers 10 days, 30 days and 60 days after payment is due. We – again, it’s a staff issue – not
      having enough staff to get involved. And we also had a problem – I don’t know if anybody …

Female: I did.

Dave Matheis: … has run into this before, the last time we tried to make a contact with the person who was
      behind, we couldn’t get in touch with them. And our banker told us it was just as well because they
      filed for bankruptcy and if we had get in contact with them, we would subject to a $10,000 fine for
      contacting them when they file bankruptcy.

        So we kind of backed off on that, after that and I don’t know if there’s a way to get around that or if
        programs are running something similar to that.

        We used to do catch up payments up to there catch up payments. We stopped that a couple of
        years ago. I’ve got to stay that I think most of the people we did catch up payments for ended up
        going bad eventually anyway, so it was more of a delaying tactic than anything. We have not done
        those for a couple of years.
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        You know, we, right now, do not offer any budget counseling.

Stanley Provus: OK.

Dave Matheis: Has anybody else run into that issue about being not able to contact folks?

Female: Yes, in Pennsylvania. There are times – I mean, they move – they don’t …

Dave Matheis: I mean, the issue, well, if we had made contact, we would’ve been subject to a fine because
      creditors aren’t supposed to – or debtors – creditors aren’t supposed to contact people if they file for

Female: We also work with Sovereign Bank a lot, and they – if they find out about someone filing
       bankruptcy, they let us know right away. They also help us in contacting our borrowers.

Stanley Provus: That’s a good point for people to be on guard of that.

Milissa Gofourth: This is Milissa again, and what we’ve done in Oklahoma is we are the co-signer of the
        note, so we’re not the official debtor or creditor person, and as long as the loan is active, we contact
        them as a co-signer not in another way. So I don’t know if we could get in trouble for contact them
        on that or not. We might.

        What we’ve done when the loan goes totally bad, we turn it over to the creditor, and then we never
        contact them again.

Stanley Provus: OK. Beginning with Susan, let me ask this question, do you know what your vehicle loan
        loss rate has been as a percentage of your overall portfolio on average? And I’m talking about
        delinquent …

Susan Tachau: That’s an interesting question; we’ve had just under a five percent default rate. If you get
       rid of the people who’ve died, it’s 2.9. And we’ve had probably four or five vehicles, that’s it.

Stanley Provus: OK. Is that a national loss rate or delinquency rate?

Susan Tachau: That’s a loss rate. That’s a default rate.

Stanley Provus: OK.

Susan Tachau: Out of approximately close to 700 loans.

Stanley Provus: Yes, that’s good. Jason?

Male: Is that 700 loans?

Susan Tachau: No, total loans.

Male: OK.

Susan Tachau: You know, part of the issue that I think – that we’re looking for is that a lot of our vehicle
       loans are fairly new from 2000 forward. I’m looking to see what happens when you’re five or six
       years out because at that point, then you have a lot of miles on your vehicles, and the repair might
       get al little hefty.

        And so I’m, you know, we have a great return rate right now, but, you know, I’m waiting for this year,
        next year and the following year to see when the bulk of these loans starts coming through.
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Dave Matheis: Well, we’ve had – we’ve been making loans since July of 2000, so we’re almost at seven
      years, and we’ve made 134 vehicle loans – vehicle modification loans and our default rate is nine
      percent. We’ve had 12 of those 134 loans go bad on us.

Stanley Provus: That’s Dave.

Dave Matheis: That’s Dave from Kentucky, yes.

Stanley Provus: OK. How about Jason?

Jason Luciano: We’ve had – we’ve got about a one-and-a-half percent default rate; maybe a little bit under
       that. Of those, zero percent have been vehicles at this point.

Stanley Provus: I didn’t get that last part. Could you repeat that?

Jason Luciano: No defaults on vehicles.

Stanley Provus: OK. When did you start making those loans?

Jason Luciano: January of ’05.

Stanley Provus: OK. From the greater audience, any questions – additional questions at this point?

        OK. I’m going to …

Dave Matheis: I will say, we have asked for case studies on those. We had a person the summer before
      last, we had turned down their application and they – we have an appeal process. They came to a
      meeting, their parent with the child who is disabled and they wanted – badly needed a vehicle to
      transport the child and we went on and made a loan when they – after they came to the meeting,
      and sat and made the loan. They wrecked the vehicle and we never saw a payment.

Female: Oh.

Male: That was Dave.

Dave Matheis: Yes, that was me – Dave from Kentucky. Yes.

Stanley Provus: OK.

Dave Matheis: Yes, we’ve had a couple of people; one person died and the spouse moved out of state with
      the vehicle and never saw it again either. That’s happened to us a couple of times.

Susan Tachau: This is Susan from Pennsylvania, that’s why we start putting liens on. When we first started
       our program in the late 1990’s, we had no liens at all. But it was that first vehicle where the man and
       his wife had ((inaudible)) the vehicle. Brand new. She had MS and he picked her up, and dropped
       her off at a nursing home and continued onto Ohio.

Male: My gosh.

Susan Tachau: The lien was the next policy.

Male: Yes, we do have liens on our vehicles.

Stanley Provus: OK. All right. We’ve already talked I think about your liquidation procedures with your
        participating banks. But I think, you can correct me if I’m wrong, but I think you all basically said the
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        lender does liquidation. In some cases, they handle that directly; they’ll use a repo agency, is that

Dave Matheis: In our case, yes – Kentucky.

Stanley Provus: Jason?

Susan Tachau: In Pennsylvania, we haven’t had enough to – we don’t have an agency and we’re debating
       on what to do.

Stanley Provus: OK.

Jason Luciano: We haven’t gotten to that bridge yet.

Dave Matheis: We have problems – the communications a little better, but we’ve had in the beginning
      ((inaudible)) Kentucky situation like I said, the collector for the bank’s collecting department is in
      Cincinnati. Our loans are made out of ((inaudible)). There were a couple of vehicles that were sold,
      repossessed and sold before we knew about that, but we’ve kind of corrected that and the
      communication is better now.

Stanley Provus: Question nine; we’re at four more to go. I think we’ll try to get it done by 12:30 or earlier,
        how do you guys go about marketing the vehicle loans? Do you market them any different than
        your – than your other loans? And if so, how? Or maybe, you can – if you don’t market them any
        differently, just briefly summarize how you market the program period starting with Susan.

Susan Tachau: We don’t market it any differently, but we do make sure that the vehicle vendors and our
       Office of Vocation Rehabilitation and some of the school district people know about our program.
       So we have our general brochure where we make sure right on the cover to have an adapted
       vehicle. It’s on our Web site. It’s on that first page, having an adaptive vehicle. It’s in our
       newsletter. Jamie puts together the newsletter and we had a whole article around vehicles.

        The vendors love us because we have a very (reportable) rate and we will help people who don’t
        have traditional credit. Whereas the vendors, have their, some of them, have their own financing.
        But they won’t go for someone who doesn’t have traditional credit. So they pretty much need us for
        their business. (OVR) does a lot of referring so that if they are going to pay for the adaptations,
        usually the next question is, well, how do I get my vehicle and (OVR) passes out our brochure.

Stanley Provus: OK, Jason?

Jason Luciano: We don’t do anything particularly different in terms of marketing for vehicles as opposed to
       any other loan. I think an ((inaudible)) of the fact we don’t really consider them much different than
       any other loan that may be coming to our program. ((inaudible)) say that the vendors of
       ((inaudible)) vehicles and even after market modifications of vehicles has been an invaluable
       source or referrals and the applications coming through.

        I think ((inaudible)) ever happened was early on in the program an employee of vehicle – a modified
        vehicle place came to us for a loan. So now every single person that he sells a vehicle to ends up
        getting an application for our program. So vendors really – people who sell the modified vehicles
        are the people you need to talk to if you want to increase the number of vehicles you sell.

Dave Matheis: Yes, we don’t do any, in Kentucky, this is Dave. We don’t do any special marketing either in
      terms of the vehicle loans. Since the loan corporation is connected to the vocational rehabilitation
      agency itself, we do have that built in referral source that Susan talked about. The ((inaudible))
      refers to – I think ((inaudible)) referred to us and then the vendors they work in turn that found out
      ((inaudible)) do that, and they readily refer us to people who are (VR) consumers.
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        As Susan said, they don’t – they refer to us – refer people to us who really can’t get financing
        anywhere else. So, they’re very happy that we’re around. I think there’s an issue with using
        vendors as a referral source. ((inaudible)) doing it for their own good; they have to watch them, I
        think, and the issue we’ve had with the vendors, too, is that even though we do a fairly quick
        turnaround, it’s still not a phone call or a person can’t make a phone call and get approved. So, it
        may take a few days before they get a decision particularly if the board has to discuss it
        ((inaudible)). So the vendors put a lot of pressure on some of the applicants to get a decision. You
        know, we’re going to sell this vehicle if you don’t want it, that kind of thing. And that’s something –
        in particular, the one vendor we have to deal with a little bit.

Stanley Provus: OK.

Female: We find that also, Dave. I find it very unattractive.

Stanley Provus: Yes, that’s for sure.

Female: You know, it can’t be understated. You know, there’s enough pressure already on the person who
       wants to purchase the vehicle to have the vendor start in, well, we’ve got – we’re going to have to
       sell it and sometimes they actually do which then causes a lot of problems because you have to go
       back (vendor) numbers and start that process all over again.

Dave Matheis: Now, I know some states – state or states – has – maybe Maryland has a pre-approval
      process. They’ll approve an amount before they actually go looking for a vehicle. I don’t know how
      that works. We don’t do that here.

Jason Luciano: We do that in Massachusetts. Someone can get pre-approved. It’s an application that’s
       submitted without a vin and the bank approves, you know, up to the amount that’s being requested.
       If they get that approval, they can go find a vehicle. So net of sales agreement with the vin on it and
       we will submit the necessary documents for them to set up closing.

Stanley Provus: Do you think that gives the borrower more leverage?

Jason Luciano: Absolutely. They have up to 90 days after their approval to actually ((inaudible)).

Stanley Provus: OK.

Dave Matheis: That sounds like a good way of doing it. I probably need to talk to our bank about that.

Stanley Provus: OK. Anybody out there in (AT) world with any additional questions in marketing or any
        good tips?

        OK, I’m going to move onto your information technology systems, beginning with Susan. I guess
        we were out for was how sophisticated your systems were and tracking applications and things of
        that sort.

Susan Tachau: Well, we use the UFC database. We did use “Down Home”, but that didn’t offer us anything
       that the UFC didn’t offer. And we’re going to be putting together our own database very shortly, a
       separate one, and we’re kind of hanging out there waiting to see what’s going to happen when UFC
       no longer has the contract. We’re a little bit in limbo land anticipating what information we may or
       may not need and unlike some of the other old title three’s, we do not have a contract with our state
       program, so that our data that we are collecting is probably slightly different than some of he other

Stanley Provus: OK. Jason?
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Jason Luciano: We have internal databases that have been developed. We use the online ((inaudible))
       you can track your stuff as well as your own internal databases. And that really has met our needs
       at this point.

Stanley Provus: You said it has or hasn’t?

Jason Luciano: Has.

Stanley Provus: OK. Dave?

Dave Matheis: We do exactly the same as Jason just described and it, so far, has been enough for us I

Stanley Provus: OK. Question 11, do you stay (up) your vehicle loan program any differently than for all
        other loans, beginning with Dave?

Dave Matheis: No. We treat the loans pretty much as the rest of them and we have two staff here that are
      assigned to the processing loans ((inaudible)) part of their time doing it. The bank handles all the
      originations and all the paperwork once we decided to make a loan.

        And they – the vehicle loans in particular, they have pretty good relationships with the three
        vendors that we mainly use. And over time, they’ve worked it out pretty well between themselves,
        so, no – we don’t handle them any differently. We don’t staff assigned to them specifically.

Stanley Provus: Jason?

Jason Luciano: Our entire program in Massachusetts is through (FTE). So myself and the program
       coordinator. So, we both handle everything.

Stanley Provus: OK. Susan?

Susan Tachau: We – all of us, well, not me, everybody here handles all the loans, but we do have one
       person who probably handles the majority of the vehicle loans. This is so that because there’s
       slightly more paperwork and a little bit more detail, and she’s in as a conduit with the bank and the

Stanley Provus: OK. Final question, beginning with Susan.

Susan Tachau: Let me go back just for a second …

Stanley Provus: OK.

Susan Tachau: … to put a plug for the ASP’s, all of us ASP’s, I mean, one of the things I think we have not
       made our point as clearly as perhaps we could, is I think all of us are pretty short staffed that there
       aren’t people just dedicated for one activity. I think most of us do quite a few activities. I know that
       on our board, we have a CEO, President of a bank on our board and he is incredibly impressed by
       the amount of work that we do and the underwriting that we do on all loans, including vehicle loans,
       that he pays like five people to do.

        So I think that is one of the, you know, unknown secrets about us is that we’re pretty, I think, all of
        our programs are very hardworking in doing a lot of things with very few people.

Stanley Provus: OK. Again, final question, Susan, the most important lessons you have learned in making
        vehicle loans?
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Susan Tachau: Getting a lien on a vehicle, making sure we have accurate vin numbers and lastly, making
       sure that people understand that if you’re getting a vehicle, the cost is more than a vehicle. It’s also
       the insurance, repair and gasoline. But I think if you know that up front, the rest kind of moves

Stanley Provus: OK. Jason?

Jason Luciano: First, is listening to Susan’s advice in terms of getting liens on vehicles. The second
       probably that I feel like is one of the most important issues, is making sure the person understands,
       they’re getting an eight-year loan on a vehicle. That’s a long time and they’re going to need –
       they’re going to be really upside down on it and make sure they thoroughly understand the
       ramifications of that.

Stanley Provus: OK. Dave?

Dave Matheis: Well, I’d like to say that we’ve learned to not to take such big chances, but I don’t think it’s
      true because I was looking at our loans this year and still, most of the vehicle decisions we’ve made
      we’ve kind of gone against the back ((inaudible)) so we’re still taking risks.

        But you know, this is where the (need) is. This is what we keep getting applications for, I think we’re
        meeting a need as best as we can.

Stanley Provus: Do you get any situations where you would have what I would call “negative equity” where
        a borrower might be trying to trade in a vehicle that they still owe some money on? So in a way they
        need a part of a loan to pay that off in addition to a loan for a new adaptive vehicle?

Susan Tachau: Yes. In Pennsylvania we don’t allow it.

Jason Luciano: Yes, in Massachusetts and we do allow it ((inaudible)) being used as a trade on the one
       that they’re interested in purchasing.

Dave Matheis: Yes, we’ve done it a couple of times.

Stanley Provus: In those cases, do you get into the loan-to-value ratios that exceed 100 percent?

Dave Matheis: Well, since we guarantee the loan, the bank really isn’t – they don’t like us to death, but, you
      know, they’ll go along with it.

Stanley Provus: OK.

Jason Luciano: We haven’t had a specific situation where that came up, but I’m sure if they did, then our
       lending partner would point that out to us. But again, it’s something like the application itself is no
       credit worthy, it’s possible that the bank will go ahead and grab that loan regardless.

Stanley Provus: OK. So, actually there’s one additional question, sorry, this is a quick question. Do you
        think a national registry of modified vehicles as a result of defaults would be helpful?

Jason Luciano: Not even a little bit.

Stanley Provus: OK, that was Jason?

Jason Luciano: Yes.

Stanley Provus: Susan?
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Susan Tachau: Not really and my hesitancy is that I’d like people to have access to things, but a modified
       vehicle for one person may not be the most appropriate for another person. People need to be able
       to see it, take it, you know, the shop and make sure it’s running properly. And if it’s not a local
       vehicle, it’s not really going to be possible for people, I mean, we’re talking about people who have
       disabilities trying to get across the country. I just don’t think it’s a practical matter.

Stanley Provus: Actually I think in England they have a registry, that’s why I asked those questions.

Susan Tachau: Smaller country.

Jason Luciano: Yes, a lot smaller.

Stanley Provus: Yes, it is absolutely. Who haven’t we heard from there? Dave?

Dave Matheis: Yes, I’d have to say it doesn’t sound very practical. We have talked about maybe taking
      vehicles back after we paid them off, but – and you’ve been doing that at the state level. But you
      know, staff – we really don’t have the staff to do it and coordination, was very difficult. So, I’d say
      probably it wouldn’t have much usefulness.

Susan Tachau: Dave, this is where, you know, this is where we’re in a little bit of turmoil. We have taken
       back a vehicle …

Dave Matheis: I thought Louisiana was doing that, too.

Susan Tachau: Yes, and it is incredibly staff intensive.

Dave Matheis: Yes.

Susan Tachau: Incredibly because you want to make sure that the vehicle now has all the repairs done,
       and then change – getting the title back and then doing the vin numbers. I mean, I think people who
       have not done these vehicle loans don’t know how much time, you know, it takes to do this and staff
       time. So, it is a question.

        On the other hand, if you have a perfectly good people, and someone has defaulted or in one case,
        somebody died and they no longer needed this vehicle, you want it to be used and you don’t want
        to, like, ((inaudible)) very first default is why we’re hesitant to use our bank going after the vehicle
        ((inaudible)). Just gutted it and sold it on the market. And it was a good adapted vehicle that
        someone could’ve benefited from.

Stanley Provus: OK. Well, that – Nancy?

Nancy Meidenbauer: Yes, why don’t we open it up to questions or comments from the group?

Stanley Provus: OK. Any comments from anyone?

Milissa Gofourth: This is Milissa again, I do appreciate sharing across the board; there are several
        differences that I’ve learned about that are even different than Oklahoma’s. One of the things is
        that Oklahoma is the state that provides a pre-approval on a guarantee amount. And then we make
        a contingent upon the fair market value of the people. But we have to then go back and re-approve
        the fair market vehicle.

        And that’s where we have alto of trouble, and even in the guarantee – original guarantee, to ensure
        that the vehicle is fairly priced based on its age and the lift equipment in it. And we’ve used the blue
        book ((inaudible)) and other vehicle stuff but they don’t have the lift equipment. And then the
        ((inaudible)) lift equipment listing is not – it’s kind of out date and kind of hard to use based on local
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        So our greatest challenge in Oklahoma is to recognize what is the fair market value because we
        wouldn’t (blown) on negative equity either. So, that’s our biggest problem.

Stanley Provus: OK. Good point. Anybody else?

Kathy Adams: This is Kathy from Maine.

Stanley Provus: Hi, Kathy.

Kathy Adams: Hi. I wanted to ask are – we, in Maine, also do the – up to amount lending. That has been
       going on for a long time. Also we do refinancing of a loan that perhaps – to help the consumer with
       their time lag issue. If they can get a loan through the dealer or the vendor at X amount, which
       would be higher than they would want to be, but they can come to us after the fact and get it
       refinanced at a more reasonable amount. Is anybody doing that?

Dave Matheis: In Kentucky we’ve done it twice. We weren’t – we don’t go out of our way to advertise that.
      Banks isn’t particularly happy with it, but we have – we have refinanced existing loans twice to get
      an easier payment.

Jason Luciano: We do that in Massachusetts, we don’t have a problem with refinances. We do have a
       couple of rules that are set for us, a couple of regulations that has to be an interest rate reduction by
       so many points. The repayment length cannot extend out further than it already is. Those are two,
       for example. If it’s something where somebody gets a 22 percent interest rate on a vehicle, for
       example, then we usually recommend to the person, have six, or eight, or 10 months of (aim) the
       loan before you try to come to us to go with our lending partner so that it can be demonstrated.
       You’re able to make kindly payments on this and that’ll make you look even more creditworthy to
       the bank because it’ll be a reduction of payment at that point that you’re already making.

Stanley Provus: Anybody else? Any final questions and any related topic? Nancy, do you have any final

Nancy Meidenbauer: I want to thank you, Stan. You did a great job. And also, Jason, and Susan, and
       Dave, I really appreciate all your comments and your vast of experience telling us about your loan
       program. I want to remind people that we do have an evaluation form we’d like to have you fill it out
       and return to us and let us know what additional topics you’d be interested in.

        Also from this discussion and other data collection, we hope to produce a document about vehicle
        loans. So look for that in the coming months to come.

        So I think that’s about it. Stan, do you have any last minute comments?

Stanley Provus: No, I’d just like to thank Susan, Jason and Dave very much and folks for listening in, and
        we’ll be talking to you again in the future. Thank you.

Female: Thank you.

Male: Thank you everybody.

Male: Thanks a lot.

Female: Have a good day.

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