June 28, 2000

New Associates Home Equity Loan Allows Borrowers to Lower Interest Rates by 3.25 Percent

Nation's "Most Rewarding Home Equity Loan" Helps Consumers Meet Financial Challenges of Rising Interest Rate Environment

Borrowers nationwide can reduce the interest rate on their home equity loans by as much as 3.25 percent under a new program announced today by Associates First Capital Corporation (NYSE:AFS). The new Freedom Loan program rewards borrowers for on-time payments with a series of interest rate reductions, the first of which occurs after the first 12 consecutive months of paying on time.

"The new Freedom Loan offers consumers a powerful weapon in the battle against higher interest rates by enabling them to substantially reduce their cost of borrowing year after year," said Walter B. Copeland, senior executive vice president for Associates Home Equity Operations. "This is truly the nation's most rewarding home equity loan. No other lender in America offers every real estate borrower such potential savings."

With the new Associates Freedom Loan, customers will receive a series of four interest rate reductions following each 12-month period of consecutive on-time payments. The initial 12-month period will result in a rate reduction of one-half of one percent. The second 12-month period of on-time payments will result in three-quarters of a percent reduction in the interest rate. A third 12-month period of on-time payments will result in one percentage point reduction in the interest rate. Finally, after the fourth 12-month period, if payments are made on time, the rate will again drop another percentage point for a total reduction of 3.25 percent.

The Associates introduced its first Freedom Loan in July 1999. Since that time, the vast majority of the 140,000 borrowers who have Freedom Loans are on track to qualify for the first rate reduction.

Bruce Marks, CEO of the Neighborhood Assistance Corporation of America (NACA), the largest consumer advocacy and housing services organization in the country, welcomes the expansion of the Freedom Loan program.

"A year ago, as the result of an agreement between NACA and The Associates, The Associates became the first lender to offer a substantial rate reduction program. These programs have now become standard in the industry. Now, The Associates has expanded its Freedom Loan rate reduction program to make it the largest in the industry," said Marks. "NACA, which is and will continue to be in the forefront of challenging lenders on issues of affordable and just lending, believes that this represents an essential element in creating a best practices standard for the lending industry. NACA considers this an important development in its advocacy to expand the rights of working people to fair credit and affordable home ownership."

According to Copeland, the on-time payment reward program has positively contributed to The Associates home equity business results by increasing loan volume and customer retention and reducing delinquencies.

"From a volume, credit quality, and customer retention standpoint, the Freedom Loan we introduced last year has exceeded our expectations. We believe this new product will enhance those results," he said.

Customers can call The Associates toll-free number, 800/217-2000, for more information or visit The Associates Web site, www.theassociates.com.

Associates First Capital Corporation, established in 1918, is a leading diversified finance company providing consumer and commercial finance, leasing, insurance and related services worldwide. The Associates, headquartered in Dallas, has operations in the United States and 13 international markets. The Associates is a Fortune 150 company and is listed among the magazine's Most Admired Companies. For more information, visit The Associates Web site at www.theassociates.com.

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