Subprime lenders are telling banks, "You can buy us, you can fund us-just don't try to run us."

The recent departure of the head of Barnett Bank's subprime mortgage division, Equicredit Corp., Jacksonville, Fla., may serve as an example of that attitude.

Jack Larsen lighted out from Equicredit in February, leaving industry veterans scratching their heads and Barnett without a chief executive for its highly profitable division.

Mr. Larsen resurfaced at the annual National Home Equity Mortgage Association conference here last week as president of First Street Mortgage Corp., a San Diego-based subprime lender.

First Street, formed this year by principals of Brentwood Financial, will originate loans using retail branches. The company is in the process of securing a warehouse line of credit and recruiting managers, Mr. Larsen said.

He predicts the company will book $50 million of loans this year and $500 million next year.

Neither Barnett nor Mr. Larsen would comment on his departure, but sources close to the company say it was a classic case of a culture clash between a finance company and a bank.

Finance company executives-by nature an independent lot-can have a hard time adjusting to the regulations and bureaucracy of the banking business.

"Banks try to remake these companies in their own image, and it's like oil and water," said an executive at a bank-owned finance company. "It just doesn't mix."

Barnett, added another executive, "just doesn't know how to handle Equicredit. They're cautious, they're conservative-well, they're a bank." She added that though Equicredit has more than doubled originations since Barnett bought it, in 1995, the bank was spooked by the high compensation Equicredit salespeople received.

Observers say several banks that enthusiastically committed years ago to lending to borrowers with less-than-perfect credit have recently gotten cold feet, in part because of the difference in the way the businesses are run. Fleet Mortgage Group, which signed on last year as a subprime mortgage lender with its purchase of California-based Option One, recently put the unit up for sale. Bank of America has also put its subprime unit, Security Pacific Finance, on the block.

Banks' reexamination of subprime lending comes as the business is exceeding the expectations of even its biggest fans.

More than 1,000 finance company executives, many with families in tow, attended the conference here, making it by far the largest conference the association has ever held.

Over all, disdain may be the best word for their take on conventional banking.

Finance company executives say they're faster, leaner, and smarter, and have a hungry edge that banks lost decades ago.

"Banking is bureaucratic and slow-and deregulated in name only," Mr. Larsen said when asked why he prefers to work for a finance company. "The finance-company world is faster-operating and more entertaining."

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