WFS FINANCIAL INC
EXHIBIT 10.26
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>19
<FILENAME>a88051exv10w26.txt
<DESCRIPTION>EXHIBIT 10.26
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.26


                            CUSTOMER LIST AGREEMENT

        This CUSTOMER LIST AGREEMENT ("Agreement") is made as of this 15th day
of May, 1998, by and between WESTERN FINANCIAL BANK, a federally-chartered
savings bank (the "Bank"), WFS FINANCIAL INC, a California corporation ("WFS"),
and WESTFIN INSURANCE AGENCY, INC., a California corporation ("WFIA") (the
"Parties" or, individually, "Party"). This Agreement supersedes all previous
Customer List Agreements and amendments thereto, entered into by and among any
of these Parties.

                                    RECITALS

        A. The Bank is the majority owner of WFS, having formed the company as
an operating subsidiary for the purpose of conducting consumer finance
activities primarily in markets not served by the Bank.

        B. The Bank is the sole owner of WFIA, having formed the company
primarily to provide insurance agency services for customers of the Bank and its
subsidiaries.

        C. The Parties desire to use or distribute Customer Lists owned by the
other Parties.

        D. The Parties are willing to provide such Customer Lists to each other
and to authorize a Party to distribute Customer Lists to Third Parties on the
terms and conditions described below.

        E. The Parties desire to set forth the terms of their relationship in
order to ensure that, in accordance with Office of Thrift Supervision ("OTS")
regulations, each Party functions as and remains a corporate entity separate and
apart from the other.

                                    AGREEMENT

        In consideration of the mutual promises set forth herein, and in
reliance upon the recitals set forth above, the Parties agree as follows:

        1. Customer Lists. From time to time, each Party ("Using Party") may
desire to rent/purchase customer lists ("Customer Lists") owned and developed by
another Party ("Owning Party"). Exhibit "A", as amended from time to time,
attached hereto and incorporated herein, identifies the Owning Party, the Using
Party, the type of and purpose for customer list, and the fee therefor. The
Using Party agrees that the Customer Lists of Owning Party will be used solely
for marketing and solicitation by the Using Party and the information contained
therein will not be disclosed or disseminated to any other person or entity
without the prior express written consent of Owning Party.

<PAGE>

        2. Authorization to Provide Names Under Third Party Agreements. From
time to time, the Bank may enter into an agreement with a non-affiliated entity
("Third Party") to provide Bank Customer Lists to Third Party for the purpose of
offering products to Bank customers. In order to maximize benefits to the Bank
in these agreements, WFS recognizes that the Bank may include WFS customer names
in the Customer Lists to Third Party. Exhibit B, as amended from time to time,
attached hereto and incorporated herein, identifies the agreement(s) entered
into by the Bank for which WFS has authorized the Bank to provide WFS Customer
Lists to Third Party. The Bank will pay WFS a portion of the fees the Bank
receives under the agreement(s), such portion to be based upon the ratio of the
number of WFS customer names supplied to Third Party to the total number of
names supplied to Third Party.

        3.     Time and Method of Payment.

               3.1 Reimbursement for Customer Lists shall be payable by the
Using Party. By the 20th day of the billing period, the Accounting Department of
the Owning Party shall make allocations to the Using Party at the time and
frequency shown on Exhibit "A" but in any case not less than quarterly. The
respective Accounting Departments of the Using Parties shall make all necessary
entries to the separate books and records of the Using Party to record the
allocation and reimbursement thereof.

               3.2 Reimbursement by the Bank to WFS for Customer Lists provided
to Third Parties under separate agreements shall be made on or before the 20th
day of the month following the month of receipt by the Bank of the fees from
Third Party.

        4.     Term.

               4.1 This Agreement shall commence as of the date stated above and
shall continue (i) until terminated by the Parties for items listed on Exhibit
"A", and (ii) for the term of the separate Third Party agreement(s) for
agreements listed on Exhibit "B".

               4.2 This Agreement may be terminated by either Party without
cause upon five (5) days prior written notice, and may be terminated immediately
for breach of any covenant, obligation, or duty herein contained or for
violation of law, ordinance, statute, rule or regulation (collectively referred
to as "law") governing the conduct of either Party hereto.

               4.3 Upon termination of this Agreement, use of Customer Lists
shall also be terminated, except as provided for in Section 4.1 above.

               4.4 Termination shall not affect the obligations of the Parties
with respect to any event occurring before termination. Each Party shall be
bound by and responsible for any transaction or expense properly agreed to or
incurred by it in connection with services acquired hereunder but not settled,
paid or reimbursed prior to the date of any such termination.


                                       2
<PAGE>

        5.     Representations and Warranties of Each Party. Each Party hereto
               represents and warrants to and for the benefit of the other as
               follows:

               5.1 Corporate Existence and Qualifications. Each is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which incorporated or chartered, with full corporate power to
own its properties and to carry on its business as now owned and operated by
each.

               5.2 Licenses; Compliance with Laws. Each has all licenses,
franchises, permits and authorizations necessary for the lawful conduct by it of
its business. Neither has violated, and is not in violation of, any such
licenses, franchises, permits or authorizations or any applicable statutes,
laws, ordinances, rules or regulations of any federal, state, or local
governmental bodies, agencies or subdivisions having, asserting or claiming
jurisdiction over it or over any part of its operations.

               5.3 Right to Privacy Laws. The Owning Party represents that the
information contained on the Customer Lists which are provided to the Using Part
does not violate any Federal or State laws regarding customers' rights to
privacy.

               5.4 Enforceability. Each, by its execution hereof, represents and
warrants that this Management Agreement is valid and binding upon it,
enforceable against it on its terms, and agrees to be liable for its obligations
hereunder.

        6.     Covenants regarding Corporate Existence.

               6.1 Preservation of Corporate Existence and Qualifications. Each
Party will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction under which organized and will
obtain and preserve its qualifications to carry on business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary.

               6.2 Observation of Corporate Formalities. Each Party shall at all
times observe the applicable legal requirements for the recognition of the other
as a corporate entity separate and apart from the other, including without
limitation the following:

                      (i) Each shall maintain corporate records and books of
account separate from those of any other;

                      (ii) Each shall not at any time commingle its funds with
those of any other;

                      (iii) Each shall hold meetings of its Board of Directors
as appropriate to authorize its corporate actions;

                      (iv) Each shall hold meetings of its shareholder as
appropriate and as required by the laws and regulations of the jurisdiction
under whose laws the Parties were formed;


                                       3
<PAGE>

                      (v) Each shall file all reports required by the
administrators or regulators of the jurisdiction in which each Party conducts
business, including without limitation, annual Statements in a timely manner;
and

                      (vi) Each shall ensure that its yearly franchise taxes are
paid in a timely manner so as to maintain its corporate existence uninterrupted.

               6.3 Advertising. Each Party will at all times hold itself out to
the public as an entity separate from the other and its advertising and
marketing shall reflect such separate corporate existence.

               6.4 OTS Regulations. Both Parties shall comply with all
applicable OTS regulations. If required by 12 C.F.R. Section 563.37(b), any
instrument evidencing borrowing by either shall indicate that the other is in no
way responsible for any such debt.

        7. Liability; Consultation with Counsel. Neither Party shall assume no
responsibility or liability with respect to the business or affairs of the
other, other than to provide the management and administrative services and
facilities required hereunder. Each shall indemnify, defend and hold harmless
the other against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies
(collectively the "Claims"), including without limitation interest penalties and
attorney's fees, that either shall incur or suffer, which arise, result from or
relate to (i) conduct by the other of its business and operations and (ii)
breach by the other of its obligations pursuant to this Agreement.
Notwithstanding anything contained herein to the contrary, Parties' obligations
pursuant to this section shall not be applicable to Claims arising directly from
the other's bad faith, gross negligence or willful misconduct. This Agreement
shall create no right, benefit or privilege in favor of any person not a Party
hereto, and no person not a Party hereto shall have any recourse against any
Party hereto for any advice, service or facility provided or omitted by a Party
pursuant to this Agreement. A Party may consult with legal counsel (who may also
be counsel to another Party) concerning any questions that may arise with
respect to its duties and obligations hereunder, and it shall be fully protected
in respect of any action taken or omitted by it hereunder in good faith reliance
on any opinion of such counsel with respect to any such duty or obligation.

        8      General.

               8.1 This Agreement may be modified, amended or superseded in
whole or in part, at any time, by a writing executed by the Parties hereto.

               8.2 This Agreement shall be governed by the laws of California,
except to the extent any such laws are superseded by federal law or regulation.

               8.3 This Agreement may be executed in counterparts, all of which,
taken together shall constitute one agreement.


                                       4
<PAGE>

               8.4 Neither Party shall assign this Agreement without the prior
written consent of the other Party, which consent shall not unreasonably be
withheld.

        Wherefore, the undersigned have executed this Agreement as of the date
first set forth above.

WESTERN FINANCIAL BANK

By:                                                           Date: May __, 1998
    --------------------------------
       Ernest S. Rady, President

WFS FINANCIAL INC

By:                                                           Date: May __, 1998
    --------------------------------
       Joy Schaefer, President

WESTFIN INSURANCE AGENCY, INC.

By:                                                           Date: May __, 1998
    --------------------------------
      Stephen M. Locko, President


                                       5
<PAGE>

                                  EXHIBIT "A"

                            CUSTOMER LIST AGREEMENT


<TABLE>
<CAPTION>
  OWNING      USING                                       DETERMINATION
   PARTY      PARTY    REMARKS                               OF FEE             FEE           PAYABLE
  ------      -----    -------                            -------------      ----------    -------------
<S>           <C>      <C>                               <C>                 <C>           <C>
    WFS       WFIA     Insurance agency solicits         $1.50/K/quarter       varies         Monthly
                       customer base of WFS

    WFS       Bank     Retail Division solicits             Agreement        $500/tape     When supplied
                       customer base of Dealer Center
                       Div. of WFS

    WFS       Bank     Equity Lending Group solicits        Agreement        $500/tape     When supplied
                       customer base of WFS
</TABLE>

<PAGE>

                                    EXHIBIT B

                             CUSTOMER LIST AGREEMENT

                             Third Party Agreements


<TABLE>
<CAPTION>
                                Date of                Term of
Vendor                         Agreement               Agreement            Product Offered
------                       -------------         -----------------      -------------------
<S>                          <C>                   <C>                    <C>
First USA Bank, Delaware     June 17, 1998         2 years,               MasterCard and Visa
                                                   automatic renewal      cards and services
</TABLE>



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