Fairbanks Capital Questions Story Told by Former CEO in TV Interview
A former president of Fairbanks Capital, Mark Finston, has gone on record criticizing the company's aggressive growth strategy and saying he advised the board about his concerns, but a spokesperson for the company said Mr. Finston left Fairbanks well before some of the acquisitions he now criticizes.
As such, Fairbanks executives question whether or not Mr. Finston was really in a position to have criticized the company's continuing growth strategy at that time.
Mr. Finston left the company in early 2001 in the wake of disputes with the company's founder, Tom Basmajian, who left the firm earlier this year after customer service problems came under public and regulatory scrutiny.
Mr. Finston told WBAL television in Baltimore that the issues that drove up customer complaints at Fairbanks and attracted the attention of regulators were known by executives at the company during his tenure there.
In the televised interview, Mr. Finston said he warned members of Fairbanks' board, including its new top executives, that Fairbanks was not prepared to manage a rapid growth strategy.
Mr. Finston said that while Fairbanks' legal department was concerned about the nature of regulatory complaints being made by consumers, "it was not a prime consideration for Mr. Basmajian at that point in time."
Fairbanks responded to the interview with a statement saying that the company had expanded management "significantly" and took other measures to manage its growth.
"Furthermore, several third-party entities that reviewed Fairbanks on a regular basis affirmed that significant progress was being made to address the problems that had been found," the statement said, in what is likely a reference to rating agency reviews of Fairbanks' loan servicing capabilities. Until the scandal broke, Fairbanks received top rankings from several rating agencies.
Recently, National Mortgage News' online weekend edition reported that a source indicated Mr. Finston is also talking to federal regulators about the loan servicing scandal at his former company.
Mr. Finston and Mr. Basmajian could not be reached for comment.
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