SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003, OR

             |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM __________ TO __________

                         Commission File Number: 0-2616

                         CONSUMERS FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

        Pennsylvania                                             23-1666392
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

 1525 Cedar Cliff Drive, Camp Hill, PA                              17011
(Address of principal executive offices)                          (Zip Code)

                                  717-730-6306
              (Registrant's telephone number, including area code)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing such requirements for the past 90 days.

                                Yes |_|   No |X|

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

                                                                Outstanding at
Class of Common Stock                                          December 15, 2003
---------------------                                          -----------------
  $.01 Stated Value                                                17,667,096


Consumers Financial Corporation                                           Page 1
Form 10-Q                                                     September 30, 2003
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                                TABLE OF CONTENTS

Number                                                                      Page
------                                                                      ----

      Part I. Financial Information*
      ------------------------------

Item 1. Condensed Consolidated Financial Statements:

        Balance Sheets - September 30, 2003 and December 31, 2002              4

        Statements of Operations and Comprehensive Income (Loss) -
             For the Nine and Three Months Ended September 30, 2003
             and 2002                                                          5

        Statements of Cash Flows - For the Nine Months Ended
             September 30, 2003 and 2002                                       6

        Notes to Condensed Consolidated Financial Statements              7 - 14

*     See Note 1 to Condensed Consolidated Financial Statements regarding
      these financial statements which have not been reviewed

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                        15 - 20

Item 3. Quantitative and Qualitative Disclosure About Market Risk             20

Item 4. Controls and Procedures                                               20

      Part II. Other Information
      --------------------------

Item 1. Legal Proceedings                                                     21

Item 2. Changes in Securities and Use of Proceeds                             21

Item 3. Defaults upon Senior Securities                                       21

Item 4. Submission of Matters to a Vote of Security Holders                   21

Item 5. Other Information                                                     21

Item 6. Exhibits and Reports on Form 8-K                                      22

      Certifications
      --------------

Pursuant to Section 302 of Sarbanes-Oxley Act                            25 - 26

Pursuant to Section 906 of Sarbanes-Oxley Act                                 27


Consumers Financial Corporation                                           Page 2
Form 10-Q                                                     September 30, 2003

<PAGE>

                         Part I. Financial Information

Item 1. Financial Statements

                                EXPLANATORY NOTE

         FAILURE TO OBTAIN A REVIEW OF THE INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have not,
prior to their filing, been reviewed by an independent public accountant using
professional standards and procedures for conducting such reviews, as
established by generally accepted auditing standards, as may be modified or
supplemented by the Securities and Exchange Commission. The Company is using its
best efforts to promptly have the interim financial statements included in this
deficient filing reviewed as required. The Company cannot however, predict when
the investigation will be completed, its ultimate scope or its outcome or any
possible effect on the Company's financial statements.


Consumers Financial Corporation                                           Page 3
Form 10-Q                                                     September 30, 2003

<PAGE>



                          PART I. FINANCIAL INFORMATION

   See Note 1 to Condensed Consolidated Financial Statements regarding these
               financial statements which have not been reviewed

Item 1. Condensed Consolidated Financial Statements

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                      September 30,      December 31,
                                                                          2003               2002
                                                                      ------------       ------------
                                                                       (Unaudited)
<S>                                                                   <C>                <C>
ASSETS

Current assets:
   Cash and cash equivalents                                          $     21,689       $    165,758
    Accounts Receivable                                                     11,332
   Prepaid expenses                                                        171,788             30,420
                                                                      ------------       ------------
          Total current assets                                             204,809            196,178

Property, plant and equipment, net of accumulated depreciation           5,832,779
Restricted cash held in escrow account                                     713,246            314,225
Intangible and other assets                                                160,475             87,363
                                                                      ------------       ------------
          Total assets                                                $  6,911,309       $    597,766
                                                                      ------------       ------------

LIABILITIES, REDEEMABLE PREFERRED STOCK AND
     SHAREHOLDERS' EQUITY DEFICIENCY

Current liabilities:
     Accounts payable                                                 $    377,850       $     32,168
     Other                                                                 140,487             22,134

          Total current liabilities                                        518,337             54,302
                                                                      ------------       ------------
Mortgages payable                                                        5,922,795

Redeemable preferred stock:
     Series A, 8 1/2% cumulative convertible, authorized 632,500
         shares; issued 75,326 shares; outstanding 2003, 72,226
         shares, 2002, 75,326 shares; redemption amount 2003,
         $722,260, 2002, $753,260; net of treasury stock
         of $8,060 in 2003                                                 711,799            739,949

Shareholders' equity deficiency:
     Common stock, $.01 stated value, authorized 10,000,000
         shares; issued and outstanding 9,045,575 shares                   170,021             52,768
     Capital in excess of stated value                                  11,519,631          8,938,865
     Deficit                                                           (12,061,236)        (9,188,118)
     Minority Interest                                                     129,962
                                                                      ------------       ------------
          Total shareholders' equity deficiency                           (241,622)          (196,485)
                                                                      ------------       ------------
          Total liabilities, redeemable preferred stock and
               shareholders' equity deficiency                        $  6,911,309       $    597,766
                                                                      ============       ============
</TABLE>

                 See Notes to Consolidated Financial Statements


Consumers Financial Corporation                                           Page 4
Form 10-Q                                                     September 30, 2003
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)

   See Note 1 to Condensed Consolidated Financial Statements regarding these
               financial statements which have not been reviewed

<TABLE>
<CAPTION>
                                                    Nine Months        Nine Months         Three Months        Three Months
                                                       Ended               Ended               Ended               Ended
                                                   September 30,       September 30,       September 30,       September 30,
                                                       2003                2002                2003                2002
                                                   -------------       -------------       -------------       -------------
                                                                        (See Note 2)                            (See Note 2)
<S>                                                 <C>                 <C>                 <C>                 <C>
Operating revenues:
     Income                                         $  189,840          $                   $  137,335          $
     Net investment income                               2,080              44,295                 512               6,320
     Net realized investment gains                                         242,480
     Proceeds from settlement of litigation                                255,000                                 255,000
     Miscellaneous                                       1,447              41,192                                     222
                                                    ----------          ----------          ----------          ----------
                                                       193,367             582,967             137,847             261,542
                                                    ----------          ----------          ----------          ----------
Non-operating expenses:
     Salaries and employee benefits                  2,419,684             123,080           2,358,053              33,507
     Professional fees                                  79,484              96,920              26,998              34,787
     Other fees                                         70,467              55,817              70,467               7,144
     Insurance                                          46,553              64,537              11,572              38,730
     Taxes, other than income                           52,408              22,114              51,797               6,159
     Provision for loss on loan receivable              27,500
     Miscellaneous                                     570,395              56,610             398,330              17,326
                                                    ----------          ----------          ----------          ----------
                                                     3,266,491             419,078           2,917,217             137,653
                                                    ----------          ----------          ----------          ----------

Income (loss) before income taxes                   (3,073,124)            163,889          (2,779,370)            123,889
Income taxes                                                --                  --                  --                  --
                                                    ----------          ----------          ----------          ----------
Net income (loss)                                   (3,073,124)            163,889          (2,779,370)            123,889
Other comprehensive loss, change
     in unrealized appreciation of debt
     securities                                                            (54,702)
Comprehensive income (loss)                        ($3,073,124)         $  109,187         ($2,779,370)         $  123,889

Per share data:
     Basic and diluted income (loss) per
         common share                              ($     0.32)        ($     0.05)        ($     0.30)                 --

     Weighted average number of
         common shares outstanding                   9,515,637           2,909,419           9,185,219           3,574,636

     Cash dividends declared per
         common share                                     None                None                None                None
</TABLE>

                 See Notes to Consolidated Financial Statements


Consumers Financial Corporation                                           Page 5
Form 10-Q                                                     September 30, 2003
<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

   See Note 1 to Condensed Consolidated Financial Statements regarding these
               financial statements which have not been reviewed

<TABLE>
<CAPTION>
                                                                   Nine Months Ended    Nine Months Ended
                                                                   September 30, 2003   September 30, 2002
                                                                   ------------------   ------------------
                                                                                           (See Note 2)
<S>                                                                    <C>                 <C>
Cash flows from operating activities:
     Net income (loss)                                                 ($3,073,124)        $   163,889
       Adjustments to reconcile net income (loss) to
       cash flows used in operating activities:
         Depreciation & amortization                                       105,048
         Provision for loss on loan receivable                              27,500
         Change in receivables                                             (11,332)             21,431
         Change in prepaid expenses                                       (141,368)            (13,317)
         Escrow - construction and real estate tax                        (444,226)
         Gain on sale of investments                                                           (56,448)
         Gain on sale of insurance licenses                                                   (178,483)
         Payment of employee severance liability                                              (177,962)
         Change in accrued expenses                                        345,682             (69,841)
         Change in due to preferred stockholders                            12,260
         Change in other current liabilities                               101,093
         Other                                                              86,764             (53,439)
                                                                       -----------         -----------
         Total adjustments                                                  81,421            (528,059)
     Net cash used in operating activities                              (2,991,703)           (364,170)

Cash flows from investing activities:
     Proceeds from sale of investments                                                         945,181
     Proceeds from sale of insurance licenses, net of
       selling expenses of $44,767 and liability assumed
       by buyer of $132,120                                                                     73,113
     Cash deposited into preferred stock escrow account                                       (331,434)
     Loan to majority shareholder                                          (22,500)
     Cash withdrawn from preferred stock escrow account                     45,204
     Purchase of property, equipment and leasehold improvements         (5,900,933)
     Deferred financing costs                                             (196,769)
                                                                       -----------         -----------
     Minority Interest                                                     129,962
                                                                       -----------         -----------
     Net cash provided by (used in) investing activities                (5,945,036)            686,860

Cash flows from financing activities:
     Mortgages payable                                                   5,922,795
     Purchase of redeemable preferred stock                                (31,629)         (1,660,067)
     Proceeds from issuance of common stock                                117,253             108,000
     Additional paid in capital                                          2,784,251
     Cash dividends to preferred shareholders                                                 (335,986)
                                                                       -----------         -----------
     Net cash used in financing activities                               8,792,670          (1,888,053)
                                                                       -----------         -----------
Net increase (decrease) in cash                                           (144,069)         (1,565,363)
Cash and cash equivalents at beginning of period                           165,758           1,802,265
                                                                       -----------         -----------
Cash and cash equivalents at end of period                             $    21,689         $   236,902
                                                                       ===========         ===========
</TABLE>

                 See Notes to Consolidated Financial Statements


Consumers Financial Corporation                                           Page 6
Form 10-Q                                                     September 30, 2003


<PAGE>

                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

1.    Overview and Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements have not,
prior to their filing, been reviewed by an independent public accountant using
professional standards and procedures for conducting such reviews, as
established by generally accepted auditing standards, as may be modified or
supplemented by the Securities and Exchange Commission. The Company is using its
best efforts to promptly have the interim financial statements included in this
deficient filing reviewed as required. The Company cannot however, predict when
the investigation will be completed, its ultimate scope or its outcome or any
possible effect on the Company's financial statements.



                              Financial Statements

The condensed consolidated balance sheet of Consumers Financial Corporation and
Subsidiary as of September 30, 2003, the related condensed consolidated
statements of operations for the three and nine months ended September 30, 2003
and 2002 and the condensed consolidated statements of cash flows for the nine
months ended September 30, 2003 and 2002, included in Item 1 have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC" or "Commission"). Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the accompanying condensed consolidated financial
statements include all adjustments (consisting of normal, recurring adjustments)
necessary in order to make the financial statements not misleading. The results
of operations for the nine months ended September 30, 2003 are not necessarily
indicative of the results of operations for the full year or any other interim
period. These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2002 and filed with the Commission.

      Since 1998, the Company has had no business operations, and its revenues
and expenses have consisted principally of investment income on remaining assets
and corporate and other administrative expenses. In March 1998, the Company's
shareholders approved a Plan of Liquidation and Dissolution (the Plan of
Liquidation) pursuant to which the Company began liquidating its remaining
assets and paying or providing for all of its liabilities. However, in February
2002, the Company entered into an option agreement with CFC Partners, Ltd., a
New York investor group (CFC Partners), pursuant to which CFC Partners could
obtain a majority interest in the Company's common stock. In August 2002, the
option was exercised and 2,700,000 new common shares (approximately 51.2% of the
total outstanding shares) were issued by the Company to CFC Partners. As a
result of the acquisition of the Company, the Plan of Liquidation was
discontinued. Immediately prior to the transaction with CFC Partners, the
Company paid a substantial portion of its remaining assets to its preferred
shareholders in connection with a tender offer to those shareholders (see Note
7).

      The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. However, as a result
of the cumulative effect of the events discussed above, at September 30, 2003,
the Company had only $21,689 in cash, a shareholders' equity deficiency of
$241,622 and was unable to pay its existing creditors. Also, as of that date,
the Company had not paid its payroll taxes for either the first quarter of 2003
(such taxes were paid in August 2003 using proceeds from a loan from one of the
Company's officers), for the second quarter of 2003 or for the third quarter of
2003.


Consumers Financial Corporation                                           Page 7
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

1.    Overview and Basis of Presentation (continued):

      As of September 30, 2003, other than its interest in Vaughn Partners, LLC
(as described below) the Company had no significant business operations and no
sources of operating revenues. CFC Partners is currently pursuing various
business opportunities for the Company, including strategic alliances, as well
as the merger or combination of existing businesses with the Company. The new
management of the Company is initially focusing on joint ventures with or
acquisitions of companies in the real estate, construction management and
medical technology businesses as well as the direct purchase of income-producing
real estate. However, there is no assurance that the Company's efforts in this
regard will be successful. In fact, given the Company's current cash position,
without new revenues and/or immediate financing, the Company's efforts to
develop the above-referenced businesses are not likely to succeed.

      The Company's ability to continue as a going concern is dependent on its
success in developing new cash revenue sources or, alternatively, in obtaining
short-term financing while its new businesses are being developed. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

      Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's 2002 Form 10-K.

      The results of operations for the nine and three months ended September
30, 2003 are not necessarily indicative of the results to be expected for the
full year.

                            Cash and Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all
short-term investments with an original maturity of three months or less to be
cash equivalents

                                  Income Taxes

The Company accounts for income taxes using the liability method, which requires
the determination of deferred tax assets and liabilities based on the
differences between the financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which differences are expected to
reverse. Deferred tax assets are adjusted by a valuation allowance, if, based on
the weight of available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

                          Depreciation and Amortization

Depreciation and amortization of Building, equipment and furniture, fixtures is
computed on the straight-line method at rates adequate to allocate the cost of
applicable assets over their expected useful lives.

                  Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.


Consumers Financial Corporation                                           Page 8
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

2.    Acquisition of the Company:

      On August 28, 2002, CFC Partners exercised its option to acquire 2,700,000
shares of the Company's common stock. The option was granted to CFC Partners
through an option agreement dated February 13, 2002. The option price of
$108,000 had previously been deposited by CFC Partners into an escrow account
held by the Company. The newly issued shares represented approximately 51.2% of
the outstanding common stock of the Company.

      In connection with the issuance of the new shares to CFC Partners, the
Board of Directors also terminated the Plan of Liquidation. The Board had
previously determined that selling the Company for its value as a "public
company shell" was a better alternative for the shareholders than the Plan of
Liquidation, inasmuch as the common shareholders were not expected to receive
any distribution in a liquidation of the Company. The preferred shareholders
were given an opportunity to exchange their shares for cash in a tender offer
completed by the Company on August 23, 2002 (see Note 7).

      The new management of the Company is currently pursuing various business
opportunities for the Company. Management's efforts have initially been focused
on joint ventures with or acquisitions of companies in the real estate,
construction management and medical technology businesses as well as the direct
purchase of income-producing real estate (see Note 3).

3.    Business Development Activities:

      With respect to the real estate business, in April 2003, Vaughn Properties
LLC entered into agreements to acquire a garden apartment complex in
Springfield, Illinois and a high-rise residential building in Chicago, Illinois.

      On September 4, 2003, the Company's Board of Directors approved the
payment of broker's fees to the Company's majority shareholder, CFC Partners,
for real estate and other contracts obtained by CFC Partners and assigned to the
Company. The Board agreed to pay CFC Partners an amount equal to 5% of the
contract price following the completion of each transaction. Such payments may
be in the form of cash or common stock of the Company. In that regard, the Board
authorized the issuance to CFC Partners of approximately 1,227,273 shares of the
Company's common stock in connection with the acquisition of the Springfield
real estate. The cost of this transaction to the Company, as measured by the
market value of the shares at the time of issuance, is approximately $270,000.
The Company has reported this charge in its third quarter operating results.

      In May 2003, Vaughn Partners LLC (Vaughn), an Illinois limited liability
company in which the Company owned directly a 47.5% interest, acquired the
Springfield, Illinois real estate referred to above. Vaughn acquired this
property for a purchase price of $5,400,000, comprised of a $4,650,000 interest
only bank loan secured by a first mortgage lien on the property payable in two
years, and a $1,200,000 second mortgage on the property, with principal amounts
of $500,000 due six months from acquisition and $700,000 due 12 months from
acquisition, and $300,000 in cash which was contributed by third party
investors. The mortgages carry interest rates of 7.25% and 13% respectively.
Vaughn also obtained and has not used approximately $291,000 of a $600,000
construction loan from the bank for the purpose of completing certain
renovations to the property. The property is recorded net of depreciation which
is recognized on a straight-line basis for a period of 31.5 years.

      In May 2003, the Company had a 47.5% direct equity interest in Vaughn and
an indirect interest in


Consumers Financial Corporation                                           Page 9
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

Vaughn of 24.225% (as a result of its 51% interest in Spartan Properties). Since
the transaction wherein the Company was to acquire its interest in Spartan was
never consummated, said transaction was unwound as of October 31, 2003.
Effective as of such date, Spartan transferred to the Company its 24.225%
interest in Vaughn in consideration for the issuance by the Company of 250,000
shares of common stock. Accordingly, as of October 31, 2003, the Company has a
direct interest in Vaughn Properties of 71.725% but no longer has an equity
interest in Spartan Properties.

      Because neither the Company nor Spartan invested any funds in exchange for
their interests in Vaughn and neither has any obligation to fund any operating
or other deficiencies incurred by Vaughn, the accompanying financial statements
do not include any equity in the net loss of Vaughn, which totaled approximately
$85,000. The operating results of Vaughn were adversely impacted by reduced
rental income due to vacancies associated with the need for major renovations
which, as of September 30, 2003, are 75% complete.

      In connection with its construction management business, the Company
intends to manage all of its real estate development and other real estate
activities and will selectively pursue the management of outside projects as
well.

      The Company currently has no contractual rights to purchase or lease any
properties or engage in any other business activities.

      On July 1, 2003, the Company filed a Registration Statement with the
Securities and Exchange Commission to register 353,000 shares of its common
stock, which the Company issued to three consultants pursuant to certain
agreements entered into between the Company and the respective consultants. Each
of these agreements terminates on December 31, 2003. In exchange for receipt of
the shares of common stock, such consultants will provide various services to
the Company, principally relating to the identification of suitable merger or
acquisition partners for the Company. The cost of these services, measured by
the market value of the shares at the time of issue, is approximately $148,020.
The Company recorded these expenses as prepaid expenses in the amount of $65,467
and consulting expenses for $82, 553.

      On September 1, 2003, the Company entered into employment agreements with
each of Donald J. Hommel, President and Chief Executive Officer and Jack I.
Ehrenhaus, Chairman and Chief Operating Officer, of the Company. Each agreement
provides for annual compensation of $225,000 in base salary with annual
increases of 10%, and annual bonuses as determined by the Board, which can range
from twice the amount of the base salary, but in no event will the bonus be less
than 50% of the salary. Each officer is also entitled to an automobile allowance
of $750 per month and reimbursement of all business expenses. The term of each
employment agreement is ten years. If the Company terminates either officer
without cause prior to the term, the officer is entitled to a severance payment
equal to his salary for the remainder of the 10-year term or two years',
whichever is greater. If there is a material change in the Company which causes
a substantial reduction of the officer's duties, or a liquidation, transfer of
assets or merger and the Company is not the surviving entity, the officer is
entitled to a severance payment.

      The employment agreements also provide for the issuance of 3,000,000
shares of the Company's common stock to each of the officers. Each officer also
agreed that if the Company has a cash flow shortfall, the officer will take
stock in lieu of cash at a 20% discount to the stock price at the payment date.

      On September 18, 2003, the Company filed a Registration Statement with the
Securities and Exchange


Consumers Financial Corporation                                          Page 10
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

Commission to register 92,000 shares of common stock which was issued to a
consultant pursuant to a consultancy agreement entered into between the Company
and the consultant on said date. In exchange for receipt of the shares of common
stock, the consultant will provide various services to the Company, principally
relating to the identification of suitable merger or acquisition partners for
the Company. The cost of his services, measured by the market value of the
shares at the time of issue, is approximately $____The Company recorded these
expenses as prepaid expenses in the amount of $65,467 and consulting expenses
for $_____.

4.    Loan Receivable

      During the first quarter of 2003, the Company made payments totaling
$27,500 to certain individuals who had previously loaned funds to CFC Partners
so that CFC Partners could purchase its majority interest in the Company's
common stock. Since any obligation to repay these individuals, one of whom is a
director of the Company, is the responsibility of CFC Partners and not the
Company, CFC Partners has agreed to repay this amount to the Company. However,
because CFC Partners currently has no ability to repay the amount borrowed, this
loan has been fully reserved in the Company's consolidated financial statements
through a charge to non-operating expenses.

5.    Restricted Assets

      As required by the terms of the option agreement with CFC Partners, the
Company deposited $331,434 (representing the tender price of $4.40 multiplied by
the 75,326 shares of preferred stock not tendered) into a bank escrow account
for the benefit of the remaining preferred shareholders. The funds in this
account, including any earnings thereon, are restricted in that they may only be
used by the Company to pay dividends or make other distributions to the
preferred shareholders. At September 30, 2003 and December 31, 2002, these
assets consisted entirely of money market funds. However, during 2003, $47,088
was withdrawn from the escrow account to purchase 12,165 shares of preferred
stock for $31,629. The remaining $15,459 was deposited into the Company's
general cash account.

6.    Income Taxes:

      The Company follows the asset and liability method of accounting for
income taxes. Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Valuation allowances are established, if necessary,
to reduce the deferred income tax asset account to the amount that will more
likely than not be realized.

      At September 30, 2003 and December 31, 2002, the Company's only deferred
tax assets consisted of (i) $100,000 and $2,038,000, respectively, arising from
net operating loss carry forwards and (ii) $4,457,000 arising from a capital
loss carry forward related to the sale of the stock of Consumers Life. These
deferred tax assets have been fully offset by a valuation allowance. The
Company's deferred tax assets at September 30, 2003 do not include any net
operating losses generated by Consumers Life since that subsidiary was sold in
June 2002 and its prior losses are no longer available to offset future taxable
income of the Company. At September 30, 2003 and December 31, 2002, the Company
had no material deferred tax liabilities.


Consumers Financial Corporation                                          Page 11
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

      No provision for income taxes has been made in the consolidated financial
statements because of the above-referenced operating loss and capital loss carry
forwards, which have been fully offset by a valuation allowance.

7.    Redeemable Preferred Stock:

      On August 23, 2002, the Company completed a tender offer to all of its
preferred shareholders, pursuant to which it purchased 377,288 shares
(approximately 83.4% of the shares outstanding) at $4.40 per share plus accrued
dividends. The tender offer was completed in conjunction with and was a
condition to the exercise of the option by CFC Partners. Since all of the
Company's remaining assets would have been distributed to the preferred
shareholders if the Company had been liquidated, the Board of Directors believed
that the exercise of the option (and the related termination of the Plan of
Liquidation) should not take place until the preferred shareholders had been
given a chance to exchange their shares for cash.

      The terms of the redeemable preferred stock require the Company to make
annual payments to a sinking fund. Such payments were to have commenced on July
1, 1998. The preferred stock terms also provide that any purchase of preferred
shares by the Company will reduce the sinking fund requirements by an amount
equal to the redemption value ($10 per share) of the shares acquired. As a
result of the Company's purchases of preferred stock in the open market and in
the tender offer described above, no sinking fund payment for the preferred
stock is due until July 1, 2006. However, in connection with the exercise of the
option by CFC Partners, the Company deposited $331,434 into a bank escrow
account for the benefit of the remaining preferred shareholders (see Note 6).

      The redeemable preferred stock is redeemable at the option of the Company
at any time, as a whole or in part, for a redemption price of $10 per share plus
all unpaid accrued dividends.

      Dividends at an annual rate of $.85 per share are cumulative from the
original issue date of the preferred stock. Dividends are payable quarterly on
the first day of January, April, July and October. The dividends payable on
January 1, April 1, July 1, and October 1, 2003 have not been declared or paid
by the Company. When the Company is in arrears as to dividends or sinking fund
appropriations for the preferred stock, dividends to holders of the Company's
common stock as well as purchases, redemptions or acquisitions by the Company of
shares of the Company's common stock are restricted. Since the Company is in
default with respect to the payment of preferred dividends and the aggregate
amount of the deficiency is equal to four quarterly dividends, the holders of
the preferred stock are entitled, only while such arrearage exists, to elect two
additional members to the then existing Board of Directors.

      In the event of a liquidation of the Company, the holders of the preferred
stock are entitled to receive $10 per share plus all unpaid and accrued
dividends prior to any distribution to be made to the holders of common stock.

      The difference between the fair value of the preferred stock at the date
of issue and the mandatory redemption value is being recorded through periodic
accretions with an offsetting charge to the deficit. Such accretions totaled
$3,479 and $9,627 in the first nine months of 2003 and 2002, respectively.


Consumers Financial Corporation                                          Page 12
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

8.    Per Share Information:

<TABLE>
<CAPTION>
                                                          Nine Months         Nine Months        Three Months       Three Months
                                                             Ended               Ended              Ended               Ended
                                                         September 30,       September 30,      September 30,       September 30,
                                                             2003                2002               2003                2002
                                                         -------------       -------------      -------------       -------------
<S>                                                      <C>                 <C>                 <C>                 <C>
Net income (loss)                                        ($3,073,124)        $   163,889         ($2,779,370)        $   123,889
Preferred stock dividend requirement                         (48,021)           (239,806)            (16,007)            (47,445)
Accretion of carrying value of  preferred stock               (3,479)            (83,708)             (1,513)            (74,821)
                                                         -----------         -----------         -----------         -----------
Numerator for basic income (loss) per share -
     income (loss) attributable to common
       shareholders                                       (3,124,624)           (159,625)         (2,796,890)              1,623
Effect of dilutive securities                                      0                   0                   0                   0
                                                         -----------         -----------         -----------         -----------
Numerator for diluted income (loss) per share            ($3,124,624)        ($  159,625)        ($2,796,890)        $     1,623
Denominator for basic income (loss) per share -
     weighted average shares outstanding                   9,515,637           2,909,419           9,185,219           3,574,636
Effect of dilutive securities                                      0                   0                   0                   0
                                                         -----------         -----------         -----------         -----------
Denominator for diluted income (loss) per share            9,515,637           2,909,419           9,185,219           3,574,636
                                                         -----------         -----------         -----------         -----------
Basic and diluted income (loss) per common  share        ($     0.33)        ($     0.05)        ($     0.30)        $      0.00
                                                         ===========         ===========         ===========         ===========
</TABLE>

9.    Significant Accounting Pronouncements

New Accounting Pronouncements

In May 2003, the FASB issued SFAS NO. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
addresses certain financial instruments that, under previous guidance, could be
accounted for as equity, but now must be classified as liabilities in statements
of financial position. These financial instruments include: 1) mandatory
redeemable financial instruments, 2) obligations to repurchase the issuer's
equity shares by transferring assets, and 3) obligations to issue a variable
numbers of shares. SFAS No. 150 is generally effective for all financial
instruments entered into or modified after May 31, 2003, and otherwise effective
at the beginning of the first interim period beginning after June 15, 2003. The
effect of the adoption of SFAS No. 150 during the period ended September 30,
2003 was the classification of the Company's preferred stock as a liability in
the statement of financial position.


Consumers Financial Corporation                                          Page 13
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

10. Subsequent Events:

      On October 20, 2003, the Company entered into an agreement with an
investment banking firm to arrange financing for the Company's operations and
expansion, provide financial advisory services on mergers and acquisitions, and
represent the Company with regard to introductions to accredited investors,
financial institutions, strategic partners, and potential clients. The Company
views this relationship as an investment banking source for corporate
acquisitions. The investment banker is to receive a percentage based on the
amount of equity or debt raised for the Company, as well as a retainer of $3,750
plus 85,000 shares of common stock of the Company with demand and piggyback
registration rights. In addition, the banker is entitled to warrants equal to 3%
of the equity of the Company upon the successful completion of any financing or
m&a transaction. The banker is also entitled to registration rights, tag along
rights, a put option, anti-dilution protection and a right of first refusal. If
the Company fails or refuses to close a transaction after funds have been placed
in escrow or a commitment letter accepted and approved, the Company is liable
for all direct and consequential damages incurred by the banker.

      On October 31, 2003, the Company filed a Registration Statement with the
Securities and Exchange Commission to register an additional 330,000 shares of
common stock issued to the consultant who was initially issued 92,000 shares.
Another Registration Statement was filed to register on November 7, 2003
pursuant to a consultancy agreement entered into between the Company and a
consultant on July 2, 2003. In exchange for receipt of the 140,000 shares of
common stock issued to such consultant, the consultant will provide various
services to the Company, principally relating to the identification of suitable
merger or acquisition partners for the Company.

      In November 2003, an investor executed a subscription agreement to
purchase 1,000,000 shares of the Company's common stock for ten cents ($0.10)
per share. As of December 24, 2003, the investor has only paid $20,000 toward
the aggregate purchase price of $100,000.


Consumers Financial Corporation                                          Page 14
Form 10-Q                                                     September 30, 2003
<PAGE>

                 CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      A review of the significant factors which affected the Company's financial
condition at September 30, 2003 and its results of operations for the nine and
three month periods then ended is presented below. Information relating to the
same periods in 2002 is also presented for comparative purposes. This analysis
should be read in conjunction with the Consolidated Financial Statements and the
related Notes appearing elsewhere in this Form 10-Q and in the Company's 2002
Form 10-K.

      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. This Form 10-Q may include
forward-looking statements which reflect the Company's current views with
respect to future events and financial performance. These forward-looking
statements are identified by their use of such terms and phrases as "intends",
"intend", "intended", "goal", "estimate", "estimates", "expects", "expect",
"expected", "project", "projected", "projections", "plans", "anticipates",
"anticipated", "should", "designed to", "foreseeable future", "believe",
"believes" and "scheduled" and similar expressions. Readers are cautioned not to
place undue reliance on these forward-looking statements which speak only as of
the date the statement was made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.

                                    OVERVIEW

      At a special meeting of shareholders held on March 24, 1998, the Company's
preferred and common shareholders approved a Plan of Liquidation and Dissolution
(the Plan of Liquidation), pursuant to which the Company would be liquidated and
dissolved. The Plan of Liquidation permitted the Board of Directors to continue
to consider other alternatives to liquidating the Company. Because the common
shareholders would not receive a distribution under the plan of liquidation and
dissolution, and the preferred shareholders would receive less than the full
liquidation value of their shares, the Board of Directors subsequently
determined that selling the Company for its value as a "public company shell"
was a better alternative for the common and preferred shareholders than
liquidating the Company.

      In October 2001, the Board of Directors met to consider three offers which
were received regarding the potential purchase of the Company. One of the three
offers was from CFC Partners, Ltd. (CFC Partners). Following its review of each
offer, the Board determined that the offer from CFC Partners was the best offer.
In February 2002, the Company and CFC Partners entered into an option agreement
which permitted CFC Partners to acquire a 51.2% interest in the Company at $.04
per share. The option held by CFC Partners was exercisable following the
completion by the Company of a tender offer to its preferred shareholders. The
completion of this tender offer was, in turn, dependent on the sale of the
Company's remaining insurance subsidiary, since substantially all of the
Company's assets were held by the subsidiary and state insurance laws would not
permit the withdrawal of those assets.

      In June 2002, the Company completed the sale of the insurance subsidiary.
In July 2002, the Board of Directors approved a tender offer to the Company's
preferred shareholders at a price of $4.40 per share, and on July 19, 2002,
tender offer materials were mailed to the holders of the preferred stock. On
August 23, 2002, the Company purchased 377,288 shares of preferred stock, or
83.4% of the total preferred shares outstanding, from those shareholders who
elected to tender their shares.

      On August 28, 2002, the Board of Directors terminated the Plan of
Liquidation and authorized the issuance of 2,700,000 shares of common stock to
CFC Partners. Donald J. Hommel, the president of CFC Partners, was also
appointed as a Director of the Company to fill an existing vacancy on the Board.
Following such appointment, the Company's officers resigned and the Board
elected Mr. Hommel as the Company's President and Chief Executive Officer. In
addition, James C. Robertson and John E. Groninger, who had been Directors of
the Company for more than 30 years, also resigned.


Consumers Financial Corporation                                          Page 15
Form 10-Q                                                     September 30, 2003
<PAGE>

      In October 2002, the Board of Directors appointed Shalom S. Maidenbaum,
Esq. as an additional Director of the Company to fill an existing vacancy on the
Board. In addition, the Directors elected Mr. Hommel as the Company's Treasurer
and Mr. Maidenbaum as the Company's Vice President and Secretary. In March 2003,
the Board of Directors appointed William T. Konczynin as an additional Director
to fill an existing vacancy.

      As a result of the approval of the Plan of Liquidation, the Company
adopted a liquidation basis of accounting for the period from March 25, 1998 to
August 28, 2002. Under this basis of accounting, assets were stated at their
estimated net realizable values and liabilities were stated at their anticipated
settlement amounts. As a result of the transaction with CFC Partners and the
related termination of the Plan of Liquidation, effective August 29, 2002, the
Company re-adopted accounting principles applicable to going concern entities.
Furthermore, as discussed in Note 2 of the notes to consolidated financial
statements appearing elsewhere in this Form 10-Q, the Company has restated its
liquidation-basis financial statements for prior periods to conform such
statements to the current presentation.

      At September 30, 2003, the Company had no significant business operations;
however, the Company's new management is currently pursuing various business
ventures. Their initial focus is on joint ventures with or acquisitions of
companies in the real estate, construction management and medical technology
businesses. As discussed in Note 4 of the notes to consolidated financial
statements appearing elsewhere in this Form 10-Q, in April 2003, the Company,
through its majority shareholder, entered into agreements to acquire garden
apartment complexes in Springfield, Illinois. The Company also had agreements to
purchase garden apartment complexes in Marietta, Georgia and a high-rise
residential building in Chicago, Illinois; however, neither transaction was
consummated. In June 2003, the Company entered into an agreement to acquire a
200-unit garden apartment complex in the Tampa, Florida area; this transaction
was also never consummated.

      In May 2003, Vaughn Partners LLC (Vaughn), an Illinois limited liability
company in which the Company currently owns a 71.725% interest, acquired the
Springfield, Illinois garden apartment complexes. Vaughn acquired this property
with cash contributed by the third party investors who own the remaining 5% of
Vaughn, a $4,050,000 [4,650,000] bank loan secured by a first mortgage lien on
the property and a $1,200,000 second mortgage on the property. Vaughn also
obtained and used $291,000 of a $600,000 construction loan from the bank for the
purpose of completing certain renovations to the property. In connection with
the acquisition, Spartan Properties LLC, also entered into an agreement with
Vaughn to manage the property for a fee.

      In May 2003, the Company had a 47.5% direct equity interest in Vaughn and
an indirect interest in Vaughn of 24.225% (as a result of its 51% interest in
Spartan Properties). Since the transaction wherein the Company was to acquire
its interest in Spartan was never consummated, said transaction was unwound as
of October 31, 2003. Effective as of such date, Spartan transferred to the
Company its 24.225% interest in Vaughn in consideration for the issuance by the
Company of 250,000 shares of common stock. Accordingly, as of October 31, 2003,
the Company has a direct interest in Vaughn Properties of 71.725% but no longer
has an equity interest in Spartan Properties.

      In April 2003, CFC Partners entered into a letter of intent with a leading
radiologist and operator of several radiology centers in the metropolitan New
York area to purchase, develop and operate positron emission tomography (PET)
imaging centers, initially in the New York area, but this letter of intent has
terminated. On September 10, 2003, the Company, through its subsidiary, P.E.T.
Centers of America, signed a lease for 3,450 square feet of medical space and
will begin to design and build its first PET imaging center in Suffolk County,
New York, but subsequently the Company allowed the lease to terminate. The
Company has no outstanding obligations or liabilities with respect to said
proposed agreements.

      At September 30, 2003, the Company's shareholders' equity deficiency
totaled $203,391 compared to a shareholders' equity deficiency of $196,485 at
December 31, 2002. The Company's net loss for the nine months ended September
30, 2003 totaled $3,073,124 compared to net income of $109,187 for the same
period in 2002.


Consumers Financial Corporation                                          Page 16
Form 10-Q                                                     September 30, 2003
<PAGE>
                              RESULTS OF OPERATIONS

      A discussion of the material factors which affected the Company's results
of operations for the nine and three months ended September 30, 2003 and 2002 is
presented below.

Nine Months Ended September 30, 2003 and 2002

      For the nine months ended September 30, 2003, the Company reported a net
loss of $3,073,124 ($.17 per share) compared to net income of $109,187 (which
translates into a loss of $.05 per share after deducting the preferred dividend
requirement) in the first nine months of 2002. The 2,700,000 new shares of
common stock issued to CFC Partners in August 2002 has significantly impacted
the comparison of per share amounts between 2003 and 2002. Since the Company now
has only a nominal amount of revenues, the current year net loss is primarily
the result of expenses incurred while the Company is developing new businesses.
During the first nine months of 2003, these costs consisted principally of
salaries to two individuals, audit, legal and consulting fees, insurance and a
$27,500 provision for loss on a receivable from the Company's majority
shareholder.

      In 2002, the Company's net income was the result of a $179,000 gain from
the sale of the state insurance licenses of Consumers Life, as part of the sale
of that subsidiary, and a $56,000 gain on the sale of certain bonds held by the
subsidiary. During this period, the Company incurred approximately $62,000 in
professional fees, principally legal and accounting fees, including $17,000 in
legal fees related to the tender offer to the Company's preferred shareholders.
The Company also incurred a $29,000 fee in connection with the termination of a
guaranteed investment contract held by the Company's retirement plan custodian.

Three Months Ended September 30, 2003 and 2002

      The Company's net loss for the third quarter of 2003 was $2,779,370 ($.16
per share). Since the Company only had $102,441 in revenues for the quarter, the
net loss is attributable to ongoing expenses incurred in connection with
developing new business operations. These costs consisted primarily of salaries,
professional fees and insurance.

      For the three months ended September 30, 2002, the Company reported net
income of $123,889 ($.01 per share) as a result of the gains arising from the
sale of Consumers Life. During the quarter, the Company incurred approximately
$33,500 in salaries and related benefits as well as professional and other fees
of $42,000.

                               FINANCIAL CONDITION

Capital Resources

      The Company currently has no commitments for any capital expenditures.
However, if the Company develops certain planned strategic alliances or
identifies a target company to be merged or otherwise combined with the Company,
the Company's plans regarding capital expenditures and related commitments are
likely to change.

      For the nine months ended September 30, 2003, the Company's cash and cash
equivalents decreased by $144,069 to $21,689 at the end of the period. The
decrease is principally the result of the cash expenses paid by the Company
during the period and the $27,500 loan made to CFC Partners, as discussed in
Note 4 of the notes to consolidated financial statements appearing elsewhere in
this Form 10-Q. The Company currently has no ability to pay any additional
expenses until it either develops new revenue sources or obtains financing.


Consumers Financial Corporation                                          Page 17
Form 10-Q                                                     September 30, 2003
<PAGE>

      On October 27, 2003, the Company entered into an agreement with an
investment banking firm to arrange financing for the Company's operations and
expansion, provide financial advisory services on mergers and acquisitions, and
represent the Company with regard to introductions to accredited investors,
financial institutions, strategic partners, and potential clients. The
investment banker is to receive a percentage based on the amount of equity or
debt raised for the Company, as well as a retainer of $3,750 plus 85,000 shares
of common stock of the Company with demand and piggyback registration rights. In
addition, the banker is entitled to warrants equal to 3% of the equity of the
Company upon the successful completion of any financing or m&a transaction. The
banker is also entitled to registration rights, tag along rights, a put option,
anti-dilution protection and a right of first refusal. If the Company fails or
refuses to close a transaction after funds have been placed in escrow or a
commitment letter accepted and approved, the Company is liable for all direct
and consequential damages incurred by the banker.

Liquidity

      In connection with the acquisition of the Company by CFC Partners,
substantially all of the Company's remaining liquid assets were used to complete
a tender offer to the preferred shareholders in August 2002. At September 30,
2003, the Company had $21,689 in cash. Furthermore, as of that date, the Company
had no significant business operations and no sources of operating revenues and
cash flows. As indicated above, the Company is currently pursuing various
business opportunities, including strategic alliances, as well as the merger or
combination of existing businesses with the Company. The Company's management is
initially focusing on joint ventures with or acquisitions of companies in the
real estate, construction management and medical technology business segments.
However, there is no assurance that the Company's efforts in this regard will be
successful.

      The Company entered into an agreement with Hudson Valley Home Builders &
Developers Corp., pursuant to which Hudson agreed to dedicate its commercially
reasonable efforts to provided between $2,000,000 and $4,000,000 per month for
the next 3 years to provide the Company with financing for real estate
transactions. To date, no funds have been raised by Hudson. If Hudson does fund
a real estate transaction of the Company's, Hudson and its investors are
entitled to 60% of the equity of such transaction. If the investors of Hudson
elect, a portion (30%) of the monies raised shall be used to purchase common
stock of the Company at a premium. Hudson and its investors will also be issued
warrants to purchase shares of common stock of the Company equal to 10% of the
shares so purchased. The Company agreed to register the shares purchased by
these investors within 2 years as well as granting piggyback registration
shares.

      As indicated above, the Company currently has no ability to pay any
additional expenses until it either develops new revenue sources or obtains
financing. Without new revenues and/or immediate financing, management's efforts
to develop the Company's real estate, construction management and medical
technology businesses are not likely to succeed.

Redeemable Preferred Stock

      As previously indicated, on August 23, 2002, the Company completed a
tender offer to all of its preferred shareholders, pursuant to which it
purchased 377,288 shares (approximately 83.4% of the shares outstanding) at
$4.40 per share plus $47,445 in accrued dividends. The tender offer was
completed in conjunction with and was a condition to the exercise of the option
by CFC Partners. Since all of the Company's remaining assets would have been
distributed to the preferred shareholders if the Company had been liquidated,
the Board of Directors believed that the exercise of the option (and the related
termination of the Plan of Liquidation) should not take place until the
preferred shareholders had been given a chance to exchange their shares for
cash.


Consumers Financial Corporation                                          Page 18
Form 10-Q                                                     September 30, 2003
<PAGE>

      The terms of the redeemable preferred stock require the Company to make
annual payments to a sinking fund. Such payments were to have commenced on July
1, 1998. The preferred stock terms also provide that any purchase of preferred
shares by the Company will reduce the sinking fund requirements by an amount
equal to the redemption value ($10 per share) of the shares acquired. As a
result of the Company's purchases of preferred stock in the open market and in
the tender offer, no sinking fund payment for the preferred stock is due until
July 1, 2006. However, in connection with the exercise of the option by CFC
Partners, the Company deposited $331,434 into a bank escrow account for the
benefit of the remaining preferred shareholders (see Note 6 of the notes to
consolidated financial statements appearing elsewhere in this Form 10-Q).

      The January 1, April 1, July 1 and October 1, 2003 dividends payable on
the Company's redeemable preferred stock have not been declared or paid by the
Company. When the Company is in arrears as to dividends or sinking fund
appropriations for the preferred stock, dividends to holders of the Company's
common stock as well as purchases, redemptions or acquisitions by the Company of
shares of the Company's common stock are restricted. Since the Company is in
default with respect to the payment of preferred dividends and the aggregate
amount of the deficiency is equal to four quarterly dividends, the holders of
the preferred stock are currently entitled, only while such arrearage exists, to
elect two additional members to the then existing Board of Directors.


Consumers Financial Corporation                                          Page 19
Form 10-Q                                                     September 30, 2003
<PAGE>

Financial Statements Not Reviewed

      The interim financial statements included in this Form 10-Q have not,
prior to this filing, been reviewed by the Company's independent public
accountants as required by applicable law. Until we file an amended Form 10-Q
which contains interim financial statements which have been reviewed by our
independent public accountants using professional standards and procedures for
conducting such reviews, as established by generally accepted auditing
standards, this filing is deficient and we are not deemed to be current or
timely in our reporting requirements under the Securities Exchange of 1934, as
amended. Although we are using our best efforts to promptly have the interim
financial statements included in this deficient filing reviewed as required, we
cannot however, predict when the investigation will be completed, its ultimate
scope or its outcome or any possible effect on the Company's financial
statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

      The requirements for certain market risk disclosures are not applicable to
the Company because, at September 30, 2003 and December 31, 2002, the Company
qualifies as a "small business issuer" under Regulation S-B of the Federal
Securities Laws.

Item 4. Controls and Procedures

      As of the end of the period covered by this report, the Company conducted
an evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the 'Exchange Act')). Based on this evaluation,
the principal executive officer and principal financial officer have concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange
Commission's rules and forms. There have been no changes in the Company's
internal control over financial reporting during the Company's most recently
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.


Consumers Financial Corporation                                          Page 20
Form 10-Q                                                     September 30, 2003
<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

      The registrant is not involved in any existing or pending legal
proceedings

Item 2. Changes in Securities and Use of Proceeds

      During the three months ended September 30, 2003, there have been no
limitations or qualifications, through charter documents, loan agreements or
otherwise, placed upon the holders of the registrant's common or preferred stock
to receive dividends, except as described in Item 3 below.

      On September 1, 2003, the Company entered into employment agreements with
each of Donald J. Hommel, President and Chief Executive Officer and Jack I.
Ehrenhaus, Chairman and Chief Operating Officer, of the Company pursuant to
which, among other things, the Company issued 3,000,000 shares to each of said
individuals. The issuances were pursuant to an exemption from the registration
requirements of the Securites Act of 1933, as amended.

Item 3. Defaults upon Senior Securities

      The January 1, 2003, April 1, 2003, July 1, 2003, and October 1, 2003
dividends payable on the registrant's redeemable preferred stock have not been
declared or paid by the registrant. The amount of these dividends totals
$48,021. When the registrant is in arrears as to dividends or sinking fund
appropriations for the preferred stock, dividends to holders of the registrant's
common stock as well as purchases, redemptions or acquisitions by the registrant
of shares of its common stock are restricted. Since the registrant is in default
with respect to the payment of preferred dividends and the aggregate amount of
the deficiency is equal to four quarterly dividends, the holders of the
preferred stock are entitled, only while such arrearage exists, to elect two
additional members to the then existing Board of Directors.

Item 4. Submission of Matters to a Vote of Security Holders

      On August 7, 2003, the Company mailed an Information Statement to its
shareholders in connection with a special meeting of shareholders to be held on
August 27, 2003 (the Special Meeting). At the Special Meeting, the shareholders
were asked to consider and vote upon a proposal to amend the Company's Articles
of Incorporation (i) to effect a one-for-10 reverse stock split of the Company's
common stock by reducing the number of issued and outstanding shares of common
stock from 5,276,781 to approximately 527,678, (ii) to authorize 50 million
shares of capital stock of the Company, of which 40 million shares will relate
to common stock and 10 million shares will relate to preferred stock and (iii)
to permit action upon the written consent of less than all shareholders of the
Company, pursuant to section 2524 of the Pennsylvania Business Corporation Law
of 1988. CFC Partners owns a majority of the Company's issued and outstanding
shares of common stock and has voted to approve the proposal presented above.
Although the meeting occurred and the three actions were approved by the
shareholders, at this time the Company's management have not effected any of the
authorized actions

Item 5. Other Information

      Effective as of October 31, 2003, the transaction with Spartan Properties,
LLC was unwound. In May 2003, the Company had a 47.5% direct equity interest in
Vaughn Properties, LLC (the record and title owner of the real estate located in
Springfield, Illinois) and an indirect interest


Consumers Financial Corporation                                          Page 21
Form 10-Q                                                     September 30, 2003
<PAGE>

in Vaughn of 24.225%. The indirect interest was as a result of its 51% interest
in its subsidiary, Spartan Properties, LLC. Since the transaction wherein the
Company was to acquire its interest in Spartan was never consummated, the
transaction was unwound as of October 31, 2003. Effective as of such date,
Spartan transferred to the Company its 51% in Vaughn Properties, which resulted
in the Company owning a 71.725% interest directly in Vaughn. In consideration
for such transfer, the Company issued 250,000 shares of common stock to Spartan.

      On October 27, 2003, the Company entered into an investment banking
agreement with David Sassoon & Co. Plc. Pursuant to which, among other things,
the Company issued 85,000 shares to its investment banker. The issuance was
pursuant to an exemption from the registration requirements of the Securites Act
of 1933, as amended.

      In November, 2003, an investor executed a subscription agreement to
purchase 1,000,000 shares of common stock for ten cents a share, or an aggregate
of $100,000. Said investor was granted piggy-back registration rights with
respect to its shares for a period of two years. As of December 24, 2003, the
investor has only paid $20,000 of its purchase price.

Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits:

      4.1   Employment Agreement effective September 1, 2003, by and between
            Consumers Financial Corporation and Donald J. Hommel

      4.2   Employment Agreement effective September 1, 2003, by and between
            Consumers Financial Corporation and Jack Ehrenhaus

      4.3   Agreement dated October 27, 2003 between Consumers Financial
            Corporation and David Sassoon & Co. PLC

      4.4   Agreement dated as of September 10, 2003 by and between Hudson
            Valley Home Builders & Developers Corp. and Consumers Financial
            Corp.

The exhibits will be filed by amendment.

      31    Rule 13a-14(a)/15d-14(a) Certifications

      31.1  Section 302 certification by Chief Executive Officer

      31.2  Section 302 certification by Chief Financial Officer

      32    Section 1350 Certifications

      32.1  Section 906 certification by Chief Executive Officer

      32.2  Section 906 certification by Chief Financial Officer


Consumers Financial Corporation                                          Page 22
Form 10-Q                                                     September 30, 2003
<PAGE>

      (b) Reports on Form 8-K

      On September 25, 2003, the Company filed a Current Report on Form 8-K
under Item 4 to announce the resignation of Stambaugh Ness, PC as the Company's
independent accountants and the engagement of Marcum & Kliegman LLP engaged as
the new principal independent accountants, commencing with the interim financial
statement review for the third quarter ending September 30, 2003, and the audit
for the year ending December 31, 2003.


Consumers Financial Corporation                                          Page 23
Form 10-Q                                                     September 30, 2003
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        CONSUMERS FINANCIAL CORPORATION
                                        Registrant


Date December 29, 2003                  By /s/ Donald J. Hommel
                                          --------------------------------------
                                          Donald J. Hommel
                                          President and Chief Executive Officer

Date  December 29, 2003                 By /s/ Donald J. Hommel
                                          --------------------------------------
                                                        Donald J. Hommel
                                                        Chief Financial Officer


Consumers Financial Corporation                                          Page 24
Form 10-Q                                                     September 30, 2003