Chase to Return to Auto Leasing in R.I.

July 9, 2003

Chase Manhattan Automotive Finance Corporation, a subsidiary of JPMorgan Chase Bank, announced that it will return to the auto leasing business in Rhode Island immediately after the Governor signs a new bill limiting liability for auto leasing companies.

Chase, which is one of the biggest financiers of auto leases in the U.S., had exited the business in Rhode Island last October due to what it termed “the outdated law,” known as “vicarious liability,” which holds leasing companies responsible for accidents involving their lease customers. A Rhode Island court interpreted this law to apply to leasing companies and awarded a $28 million judgment against Chase.

“We commend Senator Maryellen Goodwin and Representative Charlene Lima, who sponsored the new bill, Senator William Irons, Senate Majority Leader Joseph Montalbano, House Speaker William Murphy and House Majority Leader Gordon Fox, as well as the Rhode Island General Assembly for taking action to save auto leasing for Rhode Island’s consumers and businesses,” stated Jeffrey Levine, general counsel for Chase. “We are keeping our promise that we would be back as soon as the law is changed and the Governor signs the new bill.”

He noted, however, that “since Rhode Island’s new bill has a sunset period of one year and only limits lessor liability on leases up to 39 months, Chase will only offer its lease programs to Rhode Island dealers and residents with lease terms not to exceed 39 months and will have no choice but to exit the leasing business again in July, 2004, if the new law is not made permanent at that time.”

The company’s bulletin also called attention to the ongoing controversy over similar “vicarious liability” laws in other states. It noted that Connecticut’s Legislature had voted to amend its vicarious liability law limiting lessor liability last month, and that Chase had “immediately honored its commitment in Connecticut by reversing its decision to exit the leasing business there.”

It pointed out that “New York is now the only state in the country with an unlimited vicarious liability law applicable to lessors.” The company ceased its leasing business there as of the first of this month “due to the inaction of the New York Legislature to pass a bill to eliminate vicarious liability for leasing companies.”

Levine stressed that “Chase made a promise that as soon as these laws are repealed, Chase will re-introduce its lease programs to dealers and residents in New York, Connecticut and Rhode Island. We have made good on that promise in Rhode Island and Connecticut and will do the same in New York immediately after the law is repealed.”

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