After Citigroup Inc.'s deal last week to buy Associates First Capital Corp., William F. Aldinger 3d is suddenly the only major consumer finance company CEO left standing.

But Mr. Aldinger, chief executive officer of Household International Inc., says he is unfazed by talk that his company will inevitably be bought out as well.

In an interview in New York Thursday, Mr. Aldinger acknowledged that consolidation is bound to continue in the specialty finance sector, saying he is open both to acquiring smaller companies and being acquired - as long as the deal is accretive to shareholders. "We have several options, but we don't really have to do anything right now," he said.

In contrast to some specialty finance companies that have been battered by accounting issues and complaints of predatory lending, Mr. Aldinger - in New York for meetings on Wall Street - speaks from a position of strength.

Household has posted eight record-earnings quarters in a row, Mr. Aldinger noted, performance he expects the Prospect Heights, Ill., company to build on. "In most financial services categories we are at the top of the class," he said, predicting that Household will return 13% to 14% growth a year.

In the event of a downturn in the economy, he said, Household, which offers both credit card and home loan products, would be able to repurchase shares to preserve shareholder value.

The consolidation wave picked up speed in the last two years with several high-profile deals, including Household's acquisition of Beneficial Corp. and Transamerica Finance Corp. as well as Citigroup's purchase of Security Pacific Financial and now, assuming the deal goes through, Associates - which itself had acquired Avco Financial Services.

Household officials stressed that Citigroup does not represent their only competition - noting that American General Corp. and Wells Fargo have active consumer finance units. As for independents, "the only one left is Sandy Weill," Mr. Aldinger said, referring to Citi's CEO. "We're down to a very few players, and we are the biggest brand in the business."

Mr. Aldinger says consolidation is healthy because it creates "rational competition" and makes it easier to price loans to offset risk, now that fewer lenders are around stretching the limits of their underwriting to get more business. "It's good for the industry," he said.

Analysts at American Banker's quarterly roundtable on Thursday (a transcript of which will appear in an upcoming issue) said that the Citi-Associates deal has effectively removed Mr. Aldinger's "exit strategy." They noted that many observers had believed that Household would be acquired first - and that Citigroup would be the buyer. Indeed, several sources said after the Associates deal was announced that Citigroup had looked closely at Household but backed away because it did not offer the international inroads that Associates brings in countries like Japan.

Companies in Household's business have also been hurt by a protracted and political debate over so-called predatory lending, but Mr. Aldinger noted Household has steered clear of complaints.

"Subprime lending is not predatory lending," he said. "We've been in business many years, and you don't stay in business that long if you're taking advantage of your customers." Mr. Aldinger acknowledged that some lenders have engaged in abusive practices, but urged caution from a regulatory standpoint, arguing that by equating subprime lending with predatory lending, regulators may cut off credit to people who really need it.

"Some people took it too far, but after the election we can move away from the rhetoric to more rational behavior and focus on the facts," he said.

Mr. Aldinger noted that Household does all its underwriting and pricing in Chicago regardless of where the loan originates, and said the centralization results in consistent pricing. Other lenders, including Citigroup, have been blasted for inconsistent pricing at their prime and subprime units.

Further, since Household does not use brokers, it avoids a source of loans that consumer advocates blame for predatory lending.

"We do zero broker-based origination, because it's hard to control the risk," Mr. Aldinger said. "You don't know what the broker is doing or saying to the borrower."

In addition, he said, a lending model that uses mortgage brokers, who do not develop loyalty to the lender, usually results in a duplication of sales force activities.

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