UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                               FORM 10-Q



(Mark One)

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

For the quarterly period ended               June 30, 2004

                                  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 1-7422


                    AMERICAN GENERAL FINANCE, INC.
        (Exact name of registrant as specified in its charter)



                 Indiana                            35-1313922
        (State of Incorporation)                 (I.R.S. Employer
                                                Identification No.)


 601 N.W. Second Street, Evansville, IN               47708
(Address of principal executive offices)           (Zip Code)


                            (812) 424-8031
         (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 such filing requirements for the past 90
days.
Yes  X    No

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes       No  X

The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q
with the reduced disclosure format.

At August 3, 2004, there were 2,000,000 shares of the registrant's
common stock, $.50 par value, outstanding.
<PAGE> 2

                           TABLE OF CONTENTS


Item                                                              Page

                    Part I - Financial Information

 1.  Financial Statements . . . . . . . . . . . . . . . . . . . . .  3

 2.  Management's Discussion and Analysis of Financial Condition
       and Results of Operations. . . . . . . . . . . . . . . . . . 13

 4.  Controls and Procedures  . . . . . . . . . . . . . . . . . . . 28

                      Part II - Other Information

 1.  Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . 29

 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 29



                         AVAILABLE INFORMATION

American General Finance, Inc. (AGFI) files annual, quarterly, and
current reports and other information with the Securities and Exchange
Commission (the SEC).  The SEC maintains a website that contains
annual, quarterly, and current reports and other information that
issuers (including AGFI) file electronically with the SEC.  The SEC's
website is www.sec.gov.

The following reports are available free of charge on our Internet
website www.agfinance.com as soon as reasonably practicable after they
are filed with or furnished to the SEC:

     *  our 2004 Current Reports on Form 8-K, if any;
     *  our 2004 Quarterly Reports on Form 10-Q; and
     *  our Annual Report on Form 10-K for the year ended December 31,
        2003.

The information on our website is not incorporated by reference into
this report.  The website addresses listed above are provided for the
information of the reader and are not intended to be active links.
<PAGE> 3

                      Part I - FINANCIAL INFORMATION


Item 1.  Financial Statements



               AMERICAN GENERAL FINANCE, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Income
                                 (Unaudited)



                              Three Months Ended        Six Months Ended
                                   June 30,                 June 30,
                                2004       2003        2004           2003
                                        (dollars in thousands)

Revenues
  Finance charges             $483,501   $441,424    $  947,159   $  881,770
  Insurance                     43,679     42,672        89,380       88,380
  Other:
    Service fee income from
      a non-subsidiary
      affiliate                 40,716        491        76,333        1,059
    Miscellaneous               28,962     62,551        57,044      103,134

Total revenues                 596,858    547,138     1,169,916    1,074,343

Expenses
  Interest expense             146,900    136,965       284,561      279,841
  Operating expenses:
    Salaries and benefits      126,355    101,900       246,235      200,706
    Other operating expenses    71,690     69,530       142,519      133,794
  Provision for finance
    receivable losses           65,267     76,305       124,520      147,421
  Insurance losses and loss
    adjustment expenses         18,000     15,160        39,127       35,549

Total expenses                 428,212    399,860       836,962      797,311

Income before provision for
  income taxes                 168,646    147,278       332,954      277,032

Provision for Income Taxes      61,396     53,389       121,066       99,100


Net Income                    $107,250   $ 93,889    $  211,888   $  177,932




See Notes to Condensed Consolidated Financial Statements.
<PAGE> 4

              AMERICAN GENERAL FINANCE, INC. AND SUBSIDIARIES
                   Condensed Consolidated Balance Sheets



                                                   June 30,     December 31,
                                                     2004            2003
                                                  (Unaudited)
                                                    (dollars in thousands)
Assets

Net finance receivables:
  Real estate loans                               $13,691,632    $11,038,140
  Non-real estate loans                             2,977,509      2,932,120
  Retail sales finance                              1,267,324      1,337,701

Net finance receivables                            17,936,465     15,307,961
Allowance for finance receivable losses              (456,031)      (466,031)
Net finance receivables, less allowance
  for finance receivable losses                    17,480,434     14,841,930

Investment securities                               1,296,774      1,307,472
Cash and cash equivalents                             206,911        145,462
Other assets                                          704,692        711,300

Total assets                                      $19,688,811    $17,006,164


Liabilities and Shareholder's Equity

Long-term debt                                    $13,015,088    $10,862,218
Short-term debt                                     3,642,182      3,467,096
Insurance claims and policyholder
  liabilities                                         428,350        438,362
Other liabilities                                     448,572        376,739
Accrued taxes                                          76,781         37,952

Total liabilities                                  17,610,973     15,182,367

Shareholder's equity:
  Common stock                                          1,000          1,000
  Additional paid-in capital                          980,276        920,276
  Accumulated other comprehensive loss                 (8,793)       (14,947)
  Retained earnings                                 1,105,355        917,468

Total shareholder's equity                          2,077,838      1,823,797

Total liabilities and shareholder's equity        $19,688,811    $17,006,164




See Notes to Condensed Consolidated Financial Statements.
<PAGE> 5

              AMERICAN GENERAL FINANCE, INC. AND SUBSIDIARIES
              Condensed Consolidated Statements of Cash Flows
                                (Unaudited)



                                                        Six Months Ended
                                                            June 30,
                                                       2004          2003
                                                     (dollars in thousands)

Cash Flows from Operating Activities
Net income                                          $  211,888    $  177,932
Reconciling adjustments:
  Provision for finance receivable losses              124,520       147,421
  Depreciation and amortization                         87,184        96,337
  Deferral of finance receivable origination
    costs                                              (40,350)      (32,350)
  Deferred income tax charge                             2,499           562
  Origination of real estate loans held for sale       (60,261)   (1,417,697)
  Sales and principal collections of real estate
    loans held for sale                                 74,407     1,280,593
  Change in other assets and other liabilities         130,237        25,709
  Change in insurance claims and policyholder
    liabilities                                        (10,012)      (22,497)
  Change in taxes receivable and payable                 2,320          (298)
  Other, net                                            (3,939)        8,849
  Net cash provided by operating activities            518,493       264,561

Cash Flows from Investing Activities
  Finance receivables originated or purchased       (6,440,268)   (3,846,511)
  Principal collections on finance receivables       3,672,128     3,469,158
  Acquisition of Wilmington Finance, Inc.                 -          (93,189)
  Investment securities purchased                     (357,506)     (294,558)
  Investment securities called and sold                326,050       244,236
  Investment securities matured                          6,100        13,800
  Change in premiums on finance receivables
    purchased and deferred charges                     (11,755)        6,457
  Other, net                                            (7,214)       (7,575)
Net cash used for investing activities              (2,812,465)     (508,182)

Cash Flows from Financing Activities
  Proceeds from issuance of long-term debt           2,871,508     1,175,379
  Repayment of long-term debt                         (727,172)   (1,187,879)
  Change in short-term debt                            175,086       475,871
  Capital contribution from parent                      60,000          -
  Dividends paid                                       (24,001)     (100,217)
Net cash provided by financing activities            2,355,421       363,154

Increase in cash and cash equivalents                   61,449       119,533
Cash and cash equivalents at beginning of period       145,462       153,660
Cash and cash equivalents at end of period          $  206,911    $  273,193




See Notes to Condensed Consolidated Financial Statements.
<PAGE> 6

              AMERICAN GENERAL FINANCE, INC. AND SUBSIDIARIES
         Condensed Consolidated Statements of Comprehensive Income
                                (Unaudited)



                                  Three Months Ended       Six Months Ended
                                       June 30,                June 30,
                                   2004        2003        2004       2003
                                           (dollars in thousands)


Net income                       $107,250    $ 93,889    $211,888   $177,932

Other comprehensive (loss) gain:

  Net unrealized (losses) gains:
    Investment securities         (52,972)     26,617     (37,285)    30,928
    Interest rate swaps            23,569     (13,328)     15,776    (21,609)

  Income tax effect:
    Investment securities          18,541      (9,315)     13,050    (10,814)
    Interest rate swaps            (8,249)      4,663      (5,521)     7,562

  Net unrealized (losses) gains,
    net of tax                    (19,111)      8,637     (13,980)     6,067

  Reclassification adjustments
    for realized losses (gains)
    included in net income:
      Investment securities           932        (554)        163      2,298
      Interest rate swaps          15,224      20,288      30,813     42,118

  Income tax effect:
    Investment securities            (326)        194         (57)      (804)
    Interest rate swaps            (5,329)     (7,100)    (10,785)   (14,741)

  Realized losses included in
    net income, net of tax         10,501      12,828      20,134     28,871

Other comprehensive (loss) gain,
  net of tax                       (8,610)     21,465       6,154     34,938


Comprehensive income             $ 98,640    $115,354    $218,042   $212,870




See Notes to Condensed Consolidated Financial Statements.
<PAGE> 7

              AMERICAN GENERAL FINANCE, INC. AND SUBSIDIARIES
           Notes to Condensed Consolidated Financial Statements
                               June 30, 2004



Note 1.  Basis of Presentation

American General Finance, Inc. will be referred to as "AGFI" or
collectively with its subsidiaries, whether directly or indirectly
owned, as the "Company" or "we".  We prepared our condensed
consolidated financial statements using accounting principles
generally accepted in the United States for interim periods.  The
statements include the accounts of AGFI and its subsidiaries, all of
which are wholly owned.  We eliminated all intercompany items.  AGFI
is an indirect wholly owned subsidiary of American International
Group, Inc. (AIG).

We made all adjustments, consisting only of normal recurring
adjustments, that we considered necessary for a fair presentation of
the Company's condensed consolidated financial statements.  These
statements should be read in conjunction with the consolidated
financial statements and related notes included in our Annual Report
on Form 10-K for the year ended December 31, 2003.  To conform to the
2004 presentation, we reclassified certain items in the prior period.



Note 2.  Acquisition

Effective January 1, 2003, we acquired 100% of the common stock of
Wilmington Finance, Inc. (WFI), a majority owned subsidiary of WSFS
Financial Corporation, in a purchase business combination.  The
purchase price was $120.8 million, consisting of $25.8 million for net
assets and $95.0 million for intangibles.  The majority of the
tangible assets acquired were real estate loans held for sale.  We
included the results of WFI's operations in our financial statements
beginning January 1, 2003, the effective date of the acquisition.  We
finalized an independent valuation of the intangibles in second
quarter 2003 and recorded $54.2 million as goodwill and $40.8 million
as other intangibles.  Goodwill and other intangibles are both
included in other assets.  Other intangibles primarily consisted of
broker relationships and non-compete agreements and had an initial
weighted-average amortization period of 9 years.  WFI originates non-
conforming residential real estate loans, primarily through broker
relationships and, to a lesser extent, directly to consumers, and
sells its originated loans to investors with servicing released to the
purchaser.  Effective July 1, 2003, WFI and AIG Federal Savings Bank,
a non-subsidiary affiliate, entered into an agreement whereby for a
fee, WFI provides marketing, certain origination processing services,
loan servicing, and related services for the affiliate's origination
and sale of non-conforming residential real estate loans.  These WFI
service activities have supplanted much of WFI's origination and sales
activity and are anticipated to do so going forward.  WFI provides the
Company with other sources of revenue through its servicing fees and
net gain on sales of real estate loans held for sale.  We report any
real estate loans we purchase from AIG Federal Savings Bank that were
generated using WFI's services as originations, rather than as
portfolio acquisitions, because AGFI and AIG Federal Savings Bank
share a common parent.
<PAGE> 8

Note 3.  Accounting Change

In December 2003, the Accounting Standards Executive Committee (AcSEC)
issued Statement of Position No. 03-3 (SOP 03-3) "Accounting for
Certain Loans or Debt Securities Acquired in a Transfer".  SOP 03-3
addresses accounting for differences between contractual cash flows
and cash flows expected to be collected from an investor's initial
investment in loans acquired in a transfer if those differences are
attributable, at least in part, to credit quality.  SOP 03-3 limits
the yield that may be accreted (accretable yield) to the excess of the
investor's estimate of undiscounted expected principal, interest, and
other cash flows (cash flows expected at acquisition to be collected)
over the investor's initial investment in the loan.  SOP 03-3 requires
that the excess of contractual cash flows over cash flows expected to
be collected (nonaccretable difference) not be recognized as an
adjustment of yield, loss accrual, or valuation allowance.  Subsequent
increases in cash flows expected to be collected generally should be
recognized prospectively through adjustment of the loan's yield over
its remaining life.  Decreases in cash flows expected to be collected
should be recognized as impairment.  SOP 03-3 is effective for loans
acquired in fiscal years beginning after December 15, 2004.  In
addition, SOP 03-3 should be applied prospectively for fiscal years
beginning after December 15, 2004 for decreases in cash flows expected
to be collected on loans acquired in fiscal years beginning on or
before December 15, 2004.  The AcSEC has encouraged early adoption of
SOP 03-3 by affected companies.  We are currently in the process of
determining our date of adoption and the effect it will have on our
results of operations and financial position in future periods.
<PAGE> 9

Note 4.  Finance Receivables

Components of net finance receivables by type were as follows:

                                              June 30, 2004
                              Real         Non-real      Retail
                             Estate         Estate        Sales
                              Loans          Loans       Finance     Total
                                         (dollars in thousands)

Gross receivables           $13,628,897  $3,288,114  $1,395,937  $18,312,948
Unearned finance charges
  and points and fees          (133,132)   (380,002)   (140,506)    (653,640)
Accrued finance charges          90,477      37,536      11,999      140,012
Deferred origination costs       26,834      28,029        -          54,863
Premiums, net of discounts       78,556       3,832        (106)      82,282

Total                       $13,691,632  $2,977,509  $1,267,324  $17,936,465


                                            December 31, 2003
                              Real         Non-real      Retail
                             Estate         Estate        Sales
                              Loans          Loans       Finance     Total
                                         (dollars in thousands)

Gross receivables           $10,980,168  $3,244,772  $1,480,724  $15,705,664
Unearned finance charges
  and points and fees          (137,473)   (388,009)   (154,494)    (679,976)
Accrued finance charges          83,356      40,590      11,911      135,857
Deferred origination costs       20,149      28,917        -          49,066
Premiums, net of discounts       91,940       5,850        (440)      97,350

Total                       $11,038,140  $2,932,120  $1,337,701  $15,307,961



Note 5.  Allowance for Finance Receivable Losses

Changes in the allowance for finance receivable losses were as
follows:

                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                 2004          2003      2004          2003
                                           (dollars in thousands)

Balance at beginning of period  $456,031    $460,031    $466,031    $463,031
Provision for finance
  receivable losses               65,267      76,305     124,520     147,421
Charge-offs                      (76,750)    (84,174)   (158,006)   (168,618)
Recoveries                        11,483       9,869      23,486      20,197

Balance at end of period        $456,031    $462,031    $456,031    $462,031
<PAGE> 10

Note 6.  Derivative Financial Instruments

Our principal borrowing subsidiary is American General Finance
Corporation (AGFC), a wholly owned subsidiary of AGFI.  AGFC uses
derivative financial instruments in managing the cost of its debt and
is neither a dealer nor a trader in derivative financial instruments.
AGFC has generally limited its use of derivative financial instruments
to interest rate swap agreements and foreign currency swap agreements.
These interest rate swap agreements and foreign currency swap
agreements are designated and qualify as cash flow hedges or fair
value hedges.

AGFC uses interest rate swap agreements to limit our exposure to
market interest rate risk in the funding of our operations.  Most of
these swaps synthetically convert certain short-term or floating-rate
debt to a long-term fixed-rate.  The synthetic long-term fixed rates
achieved through interest rate swap agreements are slightly lower than
the rates that could have been achieved by issuing comparable fixed-
rate, long-term debt.  Additionally, AGFC has swapped fixed-rate,
long-term debt to floating-rate, long-term debt.

AGFC uses foreign currency swap agreements to limit our exposure to
foreign currency risk in the funding of our operations.  These swaps
synthetically convert debt denominated in a foreign currency to U.S.
dollars.

As an alternative to funding without these derivative financial
instruments, we would have structured our debt issuances to limit our
exposure to market interest rate risk and foreign currency risk.
These debt issuances structured without derivative financial
instruments would have resulted in an immaterial difference in net
income when compared to funding with such instruments.  Accordingly,
AGFC's interest rate swap agreements and foreign currency swap
agreements did not have a material effect on the Company's net income
during the six months ended June 30, 2004 or 2003.



Note 7.  Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss were as follows:

                                           June 30,      December 31,
                                             2004            2003
                                            (dollars in thousands)

Net unrealized losses on interest
  rate swaps                              $(25,303)          $(55,586)
Net unrealized gains on investment
  securities                                16,510             40,639

Total                                     $ (8,793)          $(14,947)
<PAGE> 11

Note 8.  Segment Information

We have two business segments: consumer finance and insurance.  Our
segments are defined by the type of financial service product offered.
The consumer finance segment makes home equity loans, originates
secured and unsecured consumer loans, extends lines of credit, and
purchases retail sales contracts from, and provides revolving retail
services for, retail merchants.  We also purchase, from AIG Federal
Savings Bank, a non-subsidiary affiliate, private label receivables
under a participation agreement and real estate loans under purchase
agreements.  To supplement our lending and retail sales financing
activities, we purchase portfolios of real estate loans, non-real
estate loans, and retail sales finance receivables.  We also provide
for a fee, marketing, certain origination processing services, and
loan servicing for AIG Federal Savings Bank and originate real estate
loans through brokers for sale to investors.  We offer credit and non-
credit insurance products to our eligible consumer finance customers.
The insurance segment writes and reinsures credit and non-credit
insurance through products that are offered principally by the
consumer finance segment.

The following tables display information about the Company's segments
as well as a reconciliation of total segment pretax income to the
condensed consolidated financial statement amounts.

For the three months ended June 30, 2004:

                              Consumer                       Total
                              Finance      Insurance       Segments
                                     (dollars in thousands)
Revenues:
  External:
    Finance charges          $505,310       $   -          $505,310
    Insurance                     188         43,491         43,679
    Other                      41,790         25,440         67,230
  Intercompany                 20,302        (17,641)         2,661
Pretax income                 154,698         25,415        180,113


For the three months ended June 30, 2003:

                              Consumer                       Total
                              Finance      Insurance       Segments
                                     (dollars in thousands)
Revenues:
  External:
    Finance charges          $464,106       $   -          $464,106
    Insurance                     219         42,453         42,672
    Other                      33,462         20,436         53,898
  Intercompany                 22,709        (16,832)         5,877
Pretax income                 135,851         20,996        156,847
<PAGE> 12

For the six months ended June 30, 2004:

                              Consumer                       Total
                              Finance      Insurance       Segments
                                     (dollars in thousands)
Revenues:
  External:
    Finance charges          $996,184       $   -          $996,184
    Insurance                     391         88,989         89,380
    Other                      75,992         49,699        125,691
  Intercompany                 41,010        (35,737)         5,273
Pretax income                 309,768         47,563        357,331


For the six months ended June 30, 2003:

                              Consumer                       Total
                              Finance      Insurance       Segments
                                     (dollars in thousands)
Revenues:
  External:
    Finance charges          $932,697       $   -          $932,697
    Insurance                     445         87,935         88,380
    Other                      51,239         42,926         94,165
  Intercompany                 44,336        (34,881)         9,455
Pretax income                 271,190         42,376        313,566


Reconciliations of total segment pretax income to the condensed
consolidated financial statement amounts were as follows:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                    (dollars in thousands)
Pretax income:
  Segments               $180,113    $156,847    $357,331    $313,566
  Corporate               (10,528)    (10,309)    (24,535)    (29,798)
  Adjustments                (939)        740         158      (6,736)

Consolidated pretax
  income                 $168,646    $147,278    $332,954    $277,032


Adjustments for pretax income include realized gains (losses) and
certain other investment revenue.  Adjustments for pretax income in
2003 also included pension expense.



Note 9.  Legal Contingencies

AGFI and certain of its subsidiaries are parties to various lawsuits
and proceedings, including certain purported class action claims,
arising in the ordinary course of business.  In addition, many of
these proceedings are pending in jurisdictions that permit damage
awards disproportionate to the actual economic damages alleged to have
been incurred.  Based upon information presently available, we believe
that the total amounts, if any, that will ultimately be paid arising
from these lawsuits and proceedings will not have a material adverse
effect on our consolidated results of operations or financial
position.  However, the continued occurrences of large damage awards
in general in the United States, including large punitive damage
<PAGE> 13

awards that bear little or no relation to actual economic damages
incurred by plaintiffs in some jurisdictions, create the potential for
an unpredictable judgment in any given suit.



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


                 REPORT OF MANAGEMENT'S RESPONSIBILITY

The Company's management is responsible for the integrity and fair
presentation of our condensed consolidated financial statements and
all other financial information presented in this report.  We prepared
our condensed consolidated financial statements using accounting
principles generally accepted in the United States (GAAP) for interim
periods.  We made estimates and assumptions that affect amounts
recorded in the financial statements and disclosures of contingent
assets and liabilities.

The Company's management is responsible for establishing and
maintaining an internal control structure and procedures for financial
reporting.  These systems are designed to provide reasonable assurance
that assets are safeguarded from loss or unauthorized use, that
transactions are recorded according to GAAP under management's
direction and that financial records are reliable to prepare financial
statements.  We support the internal control structure with careful
selection, training and development of qualified personnel.  The
Company's employees are subject to AIG's Code of Conduct designed to
assure that all employees perform their duties with honesty and
integrity.  In second quarter 2004, AIG adopted the AIG Director,
Executive Officer, and Senior Financial Officer Code of Business
Conduct and Ethics, which covers such directors and officers of AIG
and its subsidiaries.  We do not allow loans to executive officers.
The aforementioned systems include a documented organizational
structure and policies and procedures that we communicate throughout
the Company.  Our internal auditors report directly to AIG to
strengthen independence.  They continually monitor the operation of
our internal controls and report their findings to the Company's
management, AIG's management, and AIG's internal audit department.  We
take prompt action to correct control deficiencies and address
opportunities to improve the systems.  The Company's management
assesses any changes to our internal control structure quarterly.
Based on these assessments, management has concluded that the internal
control structure and the procedures for financial reporting have
functioned effectively and that the condensed consolidated financial
statements fairly present our consolidated financial position and the
results of our operations for the periods presented.
<PAGE> 14

                      FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and our other publicly available
documents may include, and the Company's officers and representatives
may from time to time make, statements which may constitute "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.  These statements are not historical
facts but instead represent only our belief regarding future events,
many of which are inherently uncertain and outside of our control.
These statements may address, among other things, the Company's
strategy for growth, product development, regulatory approvals, market
position, financial results and reserves.  The Company's actual
results and financial condition may differ, possibly materially, from
the anticipated results and financial condition indicated in these
forward-looking statements.  The important factors, many of which are
outside of our control, which could cause the Company's actual results
to differ, possibly materially, include, but are not limited to, the
following:

     *  changes in general economic conditions, including the interest
        rate environment in which we conduct business and the
        financial markets through which we access capital and invest
        cash flows from the insurance business segment;
     *  changes in the competitive environment in which we operate,
        including the demand for our products, customer responsiveness
        to our distribution channels and the formation of business
        combinations among our competitors;
     *  the effectiveness of our credit risk scoring models in
        assessing the risk of customer unwillingness or inability to
        repay;
     *  shifts in collateral values, contractual delinquencies, and
        credit losses;
     *  levels of unemployment and personal bankruptcies;
     *  our ability to access capital markets and maintain our credit
        rating position;
     *  changes in laws or regulations that affect our ability to
        conduct business or the manner in which we conduct business,
        such as licensing requirements, pricing limitations or
        restrictions on the method of offering products;
     *  the costs and effects of any litigation or governmental
        inquiries or investigations that are determined adversely to
        the Company;
     *  changes in accounting standards or tax policies and practices
        and the application of such new policies and practices to the
        manner in which we conduct business;
     *  our ability to integrate the operations of our acquisitions
        into our businesses;
     *  changes in our ability to attract and retain employees or key
        executives to support our businesses; and
     *  natural or accidental events such as fires or floods affecting
        our branches or other operating facilities.

Readers are also directed to other risks and uncertainties discussed
in other documents we file with the SEC.  We are under no obligation
to (and expressly disclaim any such obligation to) update or alter any
forward-looking statement, whether written or oral, that may be made
from time to time, whether as a result of new information, future
events or otherwise.
<PAGE> 15

                     CRITICAL ACCOUNTING POLICIES

Our Credit Strategy and Policy Committee evaluates our finance
receivable portfolio monthly.  The Credit Strategy and Policy
Committee exercises its judgment, based on quantitative analyses,
qualitative factors, and each committee member's experience in the
consumer finance industry, when determining the amount of the
allowance for finance receivable losses.  If its review concludes that
an adjustment is necessary, we charge or credit this adjustment to
expense through the provision for finance receivable losses.  We
consider this estimate to be a critical accounting estimate that
affects the net income of the Company in total and the pretax
operating income of our consumer finance business segment.  We
document the adequacy of the allowance for finance receivable losses,
the analysis of the trends in credit quality, and the current economic
conditions considered by the Credit Strategy and Policy Committee to
support its conclusions.  See Provision for Finance Receivable Losses
for further information on the allowance for finance receivable
losses.


                    OFF-BALANCE SHEET ARRANGEMENTS

We do not have any material off-balance sheet arrangements as defined
by SEC rules.


                    LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our sources of funds include operations, issuances of long-term debt,
short-term borrowings in the commercial paper market, borrowings from
banks under credit facilities, and securitizations.  AGFI has also
received capital contributions from its parent to support finance
receivable growth and maintain targeted leverage.

In second quarter 2004, AGFC issued its first foreign currency
denominated debt to further diversify its funding sources.  The two
concurrent issues totaled 1.0 billion Euros ($1.2 billion) in
principal amount sold to European investors.  We executed financial
derivative transactions to effectively convert the related foreign
currency exposure into U.S. dollars.
<PAGE> 16

Principal sources and uses of cash were as follows:

                                                Six Months Ended
                                                    June 30,
                                              2004           2003
                                             (dollars in millions)
Principal sources of cash:
  Net issuances of debt                      $2,319.4       $463.4
  Operations                                    518.5        264.6
  Capital contribution                           60.0           -

  Total                                      $2,897.9       $728.0


Principal uses of cash:
  Net originations and purchases
    of finance receivables                   $2,768.1       $377.4
  Dividends paid                                 24.0        100.2

  Total                                      $2,792.1       $477.6


Net originations and purchases of finance receivables and net
issuances of debt increased for the six months ended June 30, 2004
when compared to the same period in 2003 primarily due to increases in
WFI-related real estate loan production.

We believe that our overall sources of liquidity will continue to be
sufficient to satisfy our foreseeable operational requirements and
financial obligations.  The principal factors that could decrease our
sources of liquidity are delinquent payments from our customers and an
inability to access capital markets.  The principal factors that could
increase our cash needs are significant increases in net originations
and purchases of finance receivables.  We intend to mitigate liquidity
risk by continuing to operate the Company by utilizing the following
existing strategies:

     *  maintain a finance receivable portfolio comprised mostly of
        real estate loans, which generally represent a lower risk of
        customer non-payment;
     *  originate and monitor finance receivables with our proprietary
        credit risk management system;
     *  maintain an investment securities portfolio of predominantly
        investment grade, liquid securities; and
     *  maintain a capital structure appropriate to our asset base.

Consistent execution of our business strategies should result in
continued profitability, strong credit ratings, and investor
confidence.  These results should allow continued access to capital
markets for issuances of our commercial paper and long-term debt in a
cost efficient manner.  At June 30, 2004, to access the domestic
capital markets we had $7.4 billion of long-term debt securities
registered under the Securities Act of 1933 that had not yet been
issued.  Additionally, we believe that we have access to international
capital markets, as demonstrated by the Euro offering described above.
We also maintain committed bank credit facilities and have the ability
to securitize a portion of our finance receivables to provide
additional sources of liquidity for needs potentially not met through
other funding sources.
<PAGE> 17

Capital Resources
                                              June 30,
                                      2004                2003
                                 Amount  Percent     Amount  Percent
                                        (dollars in millions)

Long-term debt                  $13,015.1     70%   $ 9,576.0     63%
Short-term debt                   3,642.2     19      3,851.6     26

Total debt                       16,657.3     89     13,427.6     89
Equity                            2,077.8     11      1,699.5     11

Total capital                   $18,735.1    100%   $15,127.1    100%

Net finance receivables         $17,936.5           $14,030.9
Debt to equity ratio                8.02x               7.90x
Debt to tangible equity ratio       8.95x               8.85x


Debt to tangible equity is a standard measure of financial risk in the
consumer finance industry.  Reconciliations of equity to tangible
equity were as follows:

                                                  June 30,
                                             2004          2003
                                            (dollars in millions)

Equity                                     $2,077.8      $1,699.5
Goodwill                                     (224.7)       (216.1)
Accumulated other comprehensive loss            8.8          34.0

Tangible equity                            $1,861.9      $1,517.4


Our capital varies primarily with the level of net finance
receivables.  The capital mix of debt and equity is based primarily
upon maintaining leverage that supports cost-effective funding.  AGFI
has historically paid dividends to (or received capital contributions
from) its parent to manage our leverage of debt to tangible equity to
a targeted amount.  During second quarter 2004, AGFI received a $60.0
million capital contribution to maintain its leverage due to the
significant finance receivable growth during the quarter.  AGFI's
ability to pay dividends is substantially dependent on the receipt of
dividends or other funds from its subsidiaries, primarily AGFC.
Certain AGFC financing agreements effectively limit the amount of
dividends AGFC may pay.  These agreements have not prevented AGFI from
managing its capital to currently targeted leverage of 9.0 to 1.

We issue a combination of fixed-rate debt, principally long-term, and
floating-rate debt, principally short-term.  AGFC obtains our fixed-
rate funding through public issuances of long-term debt with
maturities generally ranging from three to ten years.  Most floating-
rate funding is through AGFI and AGFC sales and refinancing of
commercial paper and through AGFC issuances of long-term, floating-
rate debt.  Commercial paper, with maturities ranging from 1 to 270
days, is sold to banks, insurance companies, corporations, and other
accredited investors.  At June 30, 2004, short-term debt included $3.1
billion of commercial paper.  AGFC also sells extendible commercial
notes with initial maturities of up to 90 days, which may be extended
by AGFC to 390 days.  At June 30, 2004, short-term debt included
$499.9 million of extendible commercial notes.
<PAGE> 18

Liquidity Facilities

We maintain credit facilities to support the issuance of commercial
paper and to provide an additional source of funds for operating
requirements.  At June 30, 2004, AGFC had committed credit facilities
totaling $3.0 billion, including a facility under which AGFI is an
eligible borrower for up to $300 million.  On July 15, 2004, $1.5
billion of AGFC's committed credit facilities expiring on that date
were resyndicated, and the amount was increased to $1.8 billion,
including an increase of AGFI's total eligible borrowing capacity up
to $400 million.  The annual commitment fees for the facilities are
based upon AGFC's long-term credit ratings and averaged 0.07% at June
30, 2004.

At June 30, 2004, AGFI and certain of its subsidiaries also had
uncommitted credit facilities totaling $170.0 million which could be
increased depending upon lender ability to participate its loans under
the facilities.

Outstanding borrowings under all facilities totaled $60.0 million at
June 30, 2004 and June 30, 2003.  AGFC does not guarantee any
borrowings of AGFI.



         ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION


Net Income
                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Net income               $107.3        $ 93.9    $211.9        $177.9
  Amount change          $ 13.4        $ 14.7    $ 34.0        $ 22.3
  Percent change            14%           19%       19%           14%

Return on average
  assets                  2.26%         2.34%     2.33%         2.25%
Return on average
  equity                 21.75%        21.84%    22.00%        21.26%
Ratio of earnings to
  fixed charges                                   2.13x         1.96x


See Note 8. of the Notes to Condensed Consolidated Financial
Statements for information on the results of the Company's business
segments.
<PAGE> 19

Factors that specifically affected the Company's operating results
were as follows:


Finance Charges
                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Finance charges          $   483.5  $   441.4    $   947.2  $   881.8
  Amount change          $    42.1  $    18.5    $    65.4  $    35.0
  Percent change               10%         4%           7%         4%

Average net receivables  $17,190.6  $13,937.4    $16,438.5  $13,880.9
Yield                       11.30%     12.70%       11.58%     12.79%


Finance charges increased due to the following:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Increase in average
  net receivables        $ 91.9        $ 61.5    $141.4        $120.9
Decrease in yield         (49.8)        (43.0)    (80.3)        (85.9)
Increase in number of
  days                       -             -        4.3            -

Total                    $ 42.1        $ 18.5    $ 65.4        $ 35.0


Average net receivables by type and growth in average net receivables
when compared to the same periods for the previous year were as
follows:

                                  Three Months Ended June 30,
                                  2004                   2003
                           Amount      Growth     Amount      Growth
                                     (dollars in millions)

Real estate loans         $12,983.2   $3,203.1   $ 9,780.1   $1,987.9
Non-real estate loans       2,949.0       87.1     2,861.9       51.0
Retail sales finance        1,258.4      (37.0)    1,295.4      (52.7)

Total                     $17,190.6   $3,253.2   $13,937.4   $1,986.2

Percent change                             23%                    17%
<PAGE> 20

                                   Six Months Ended June 30,
                                  2004                   2003
                           Amount      Growth     Amount      Growth
                                     (dollars in millions)

Real estate loans         $12,220.7   $2,549.7   $ 9,671.0   $1,941.0
Non-real estate loans       2,935.3       52.7     2,882.6       47.3
Retail sales finance        1,282.5      (44.8)    1,327.3      (54.4)

Total                     $16,438.5   $2,557.6   $13,880.9   $1,933.9

Percent change                             18%                    16%


The historically low interest rate environment contributed to the
increases in both originations and liquidations of our real estate
loans.  Real estate loan production arising from WFI origination
services also increased real estate loan originations by $3.9 billion
during the last twelve months.  Real estate loan acquisitions declined
during the last twelve months primarily due to an extremely
competitive pricing environment.

Yield by type and changes in yield in basis points (bp) when compared
to the same periods for the previous year were as follows:

                                    Three Months Ended June 30,
                                     2004                2003
                               Yield     Change     Yield     Change

Real estate loans              8.74%    (114) bp    9.88%    (147) bp
Non-real estate loans         21.17      (17)      21.34      (43)
Retail sales finance          14.61      (23)      14.84        6

Total                         11.30     (140)      12.70     (149)


                                     Six Months Ended June 30,
                                     2004                2003
                               Yield     Change     Yield     Change

Real estate loans              8.92%    (103) bp    9.95%    (143) bp
Non-real estate loans         21.35       (8)      21.43      (43)
Retail sales finance          14.50      (25)      14.75      (10)

Total                         11.58     (121)      12.79     (148)


Yield decreased for the three and six months ended June 30, 2004 when
compared to the same periods in 2003 primarily due to a lower real
estate loan yield resulting from the low interest rate environment and
a higher proportion of average net receivables that are real estate
loans.
<PAGE> 21

Insurance Revenues

Insurance revenues were as follows:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Earned premiums          $44.2          $42.1    $88.9          $87.2
Commissions               (0.5)           0.6      0.5            1.2

Total                    $43.7          $42.7    $89.4          $88.4

Amount change            $ 1.0          $(5.4)   $ 1.0          $(5.2)
Percent change              2%          (11)%       1%           (6)%


In second quarter 2004, we reclassified $.7 million of commissions on
non-insurance ancillary products from insurance revenues to other
revenues.


Other Revenues

Other revenues were as follows:

                            Three Months Ended      Six Months Ended
                                 June 30,               June 30,
                             2004        2003       2004        2003
                                      (dollars in millions)
Service fee income from a
  non-subsidiary affiliate  $40.7        $ 0.5     $ 76.3      $  1.1
Miscellaneous:
  Investment revenue         22.9         21.3       48.3        41.0
  Net gain on sales of real
    estate loans held for
    sale                      4.5         33.7        8.0        52.9
  Writedowns on real estate
    owned                    (2.5)        (1.8)      (4.8)       (4.1)
  Net recovery on sales of
    real estate owned         0.9          1.0        1.2         1.4
  Net interest income on
    real estate loans held
    for sale                  0.2          6.1        0.5         9.3
  Other                       3.0          2.2        3.9         2.6

Total                       $69.7        $63.0     $133.4      $104.2

Amount change               $ 6.7        $39.9     $ 29.2      $ 58.0
Percent change                11%         173%        28%        125%


Other revenues increased for the three and six months ended June 30,
2004 when compared to the same periods in 2003 primarily due to higher
service fee income from a non-subsidiary affiliate and investment
revenue, partially offset by lower net gain on sales of real estate
loans held for sale and lower net interest income on real estate loans
held for sale.  Effective July 1, 2003, WFI and AIG Federal Savings
Bank, a non-subsidiary affiliate, entered into an agreement whereby
for a fee, WFI provides marketing, certain origination processing
services, loan servicing, and related services for the affiliate's
origination and sale of non-conforming residential real estate loans.
<PAGE> 22

These WFI service activities have supplanted much of WFI's origination
and sales activity.

Investment revenue was affected by the following:

                           Three Months Ended       Six Months Ended
                                June 30,                June 30,
                           2004          2003      2004         2003
                                      (dollars in millions)

Average invested assets   $1,347.1    $1,298.0    $1,344.0   $1,294.9
Adjusted portfolio yield     6.84%       5.94%       7.00%      6.32%
Net realized (losses)
  gains on investments    $   (0.9)   $    0.6    $   (0.2)  $   (2.3)


Interest Expense

The impact of using interest rate swap agreements to fix floating-rate
debt or float fixed-rate debt is included in interest expense and the
related borrowing statistics below.

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                      (dollars in millions)

Interest expense         $   146.9  $   137.0    $   284.6  $   279.8
  Amount change          $     9.9  $    (1.6)   $     4.8  $     4.0
  Percent change                7%       (1)%           2%         1%

Average borrowings       $15,877.5  $13,232.8    $15,185.4  $13,137.5
Borrowing cost               3.70%      4.12%        3.75%      4.26%


Interest expense increased (decreased) due to the following:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Increase in average
  borrowings             $ 27.5        $ 27.5    $ 43.6        $ 52.5
Decrease in borrowing
  cost                    (17.6)        (29.1)    (38.8)        (48.5)

Total                    $  9.9        $ (1.6)   $  4.8        $  4.0
<PAGE> 23

Average borrowings by type and changes in average borrowings when
compared to the same periods for the previous year were as follows:

                                  Three Months Ended June 30,
                                  2004                   2003
                           Amount      Change     Amount      Change
                                     (dollars in millions)

Long-term debt            $11,759.4   $2,446.0   $ 9,313.4   $2,386.7
Short-term debt             4,118.1      198.7     3,919.4     (205.3)

Total                     $15,877.5   $2,644.7   $13,232.8   $2,181.4

Percent change                             20%                    20%


                                   Six Months Ended June 30,
                                  2004                   2003
                           Amount      Change     Amount      Change
                                     (dollars in millions)

Long-term debt            $11,206.1   $1,893.6   $ 9,312.5   $2,594.6
Short-term debt             3,979.3      154.3     3,825.0     (495.1)

Total                     $15,185.4   $2,047.9   $13,137.5   $2,099.5

Percent change                             16%                    19%


AGFC issued $4.6 billion of long-term debt during the last twelve
months.  The proceeds of these long-term debt issuances were used to
support finance receivable growth and to refinance maturing debt.

Borrowing cost by type and changes in borrowing cost in basis points
when compared to the same periods for the previous year were as
follows:

                                   Three Months Ended June 30,
                                    2004                 2003
                               Rate      Change     Rate      Change

Long-term debt                 4.14%     (62) bp    4.76%    (143) bp
Short-term debt                2.43      (20)       2.63      (42)

Total                          3.70      (42)       4.12      (90)


                                    Six Months Ended June 30,
                                    2004                 2003
                               Rate      Change     Rate      Change

Long-term debt                 4.20%     (70) bp    4.90%    (132) bp
Short-term debt                2.48      (22)       2.70      (40)

Total                          3.75      (51)       4.26      (74)


Federal Reserve actions from 2001 through June 2003 created the lowest
interest rate environment since the 1950s and resulted in lower long-
term debt rates as new issuances were at substantially lower rates
than long-term debt being refinanced.  In June 2004, the Federal
Reserve raised the federal funds rate 25 basis points.
<PAGE> 24

Operating Expenses

Operating expenses were as follows:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Salaries and benefits    $126.4        $101.9    $246.2        $200.7
Other                      71.6          69.5     142.6         133.8

Total                    $198.0        $171.4    $388.8        $334.5

Amount change            $ 26.6        $ 31.5    $ 54.3        $ 51.0
Percent change              16%           23%       16%           18%

Operating expenses as a
  percentage of average
  net receivables         4.61%         4.92%     4.73%         4.82%


Operating expenses increased for the three and six months ended June
30, 2004 when compared to the same periods in 2003 primarily due to
growth in WFI operations and higher salaries and benefits and
advertising expenses.  The increase in salaries and benefits reflected
approximately 520 WFI employees hired during the last twelve months.
The decrease in operating expenses as a percentage of average net
receivables for the three and six months ended June 30, 2004 when
compared to the same periods in 2003 reflected continued emphasis on
controlling operating expenses, partially offset by growth in WFI
operations.  Approximately $35.9 million of the Company's operating
expenses for the three months ended June 30, 2004 and $65.6 million of
such expenses for the six months ended June 30, 2004 were directly
related to WFI operations, compared to $19.0 million for the three
months ended June 30, 2003 and $33.2 million for the six months ended
June 30, 2003.


Provision for Finance Receivable Losses
                                                     At or for the
                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Provision for finance
  receivable losses      $ 65.3         $76.3    $124.5        $147.4
  Amount change          $(11.0)        $ 3.4    $(22.9)       $  3.5
  Percent change          (14)%            5%     (16)%            2%

Net charge-offs          $ 65.3         $74.3    $134.5        $148.4
Charge-off ratio          1.55%         2.14%     1.66%         2.14%
Charge-off coverage       1.75x         1.55x     1.70x         1.56x

60 day+ delinquency                              $458.8        $526.3
Delinquency ratio                                 2.51%         3.65%

Allowance for finance
  receivable losses                              $456.0        $462.0
Allowance ratio                                   2.54%         3.29%
<PAGE> 25

Net charge-offs by type and changes in net charge-offs when compared
to the same periods for the previous year were as follows:

                                   Three Months Ended June 30,
                                   2004                   2003
                              Amount   Change        Amount   Change
                                      (dollars in millions)

Real estate loans            $14.3       $(0.7)     $15.0       $ 2.3
Non-real estate loans         41.7        (6.2)      47.9        (1.0)
Retail sales finance           9.3        (2.1)      11.4         0.1

Total                        $65.3       $(9.0)     $74.3       $ 1.4


                                    Six Months Ended June 30,
                                   2004                   2003
                              Amount   Change        Amount   Change
                                      (dollars in millions)

Real estate loans            $ 29.1     $  1.4      $ 27.7      $ 2.7
Non-real estate loans          85.7      (11.8)       97.5        0.8
Retail sales finance           19.7       (3.5)       23.2        1.0

Total                        $134.5     $(13.9)     $148.4      $ 4.5


The decrease in net charge-offs for the three and six months ended
June 30, 2004 when compared to the same periods in 2003 reflected
lower non-real estate loan and retail sales finance net charge-offs
primarily due to the improving economy.  Real estate loan net charge-
offs increased for the six months ended June 30, 2004 when compared to
the same period in 2003 primarily due to an increase in real estate
loan average net receivables of $2.5 billion, or 26%.

Charge-off ratios by type and changes in charge-off ratios in basis
points when compared to the same periods for the previous year were as
follows:

                                    Three Months Ended June 30,
                                     2004                2003
                               Ratio     Change     Ratio     Change

Real estate loans              0.45%     (16) bp    0.61%      (4) bp
Non-real estate loans          5.68     (102)       6.70      (27)
Retail sales finance           2.96      (57)       3.53       21

Total                          1.55      (59)       2.14      (30)


                                     Six Months Ended June 30,
                                     2004                2003
                               Ratio     Change     Ratio     Change

Real estate loans              0.49%      (8) bp    0.57%      (8) bp
Non-real estate loans          5.85      (90)       6.75       (5)
Retail sales finance           3.05      (44)       3.49       29

Total                          1.66      (48)       2.14      (27)
<PAGE> 26

The improvement in the charge-off ratios for the three and six months
ended June 30, 2004 when compared to the same periods in 2003 was
primarily due to the improving economy and a higher proportion of
average net receivables that were real estate loans.

Delinquency by type and changes in delinquency when compared to the
same period for the previous year were as follows:

                                             June 30,
                                   2004                   2003
                              Amount   Change        Amount   Change
                                      (dollars in millions)

Real estate loans            $280.3     $(41.3)     $321.6      $66.1
Non-real estate loans         146.7      (20.0)      166.7        5.9
Retail sales finance           31.8       (6.2)       38.0       (0.3)

Total                        $458.8     $(67.5)     $526.3      $71.7


Delinquency at June 30, 2004 was favorably impacted by the improving
economy.

Delinquency ratios by type and changes in delinquency ratios in basis
points when compared to the same period for the previous year were as
follows:

                                             June 30,
                                     2004                2003
                               Ratio     Change     Ratio     Change

Real estate loans              2.06%    (122) bp    3.28%        4 bp
Non-real estate loans          4.46      (79)       5.25        14
Retail sales finance           2.27      (36)       2.63         9

Total                          2.51     (114)       3.65         2


The delinquency ratio at June 30, 2004 decreased when compared to June
30, 2003 primarily due to the improving economy and a higher
proportion of net finance receivables that were real estate loans.

Our Credit Strategy and Policy Committee evaluates our finance
receivable portfolio monthly to determine the appropriate level of the
allowance for finance receivable losses.  We believe the amount of the
allowance for finance receivable losses is the most significant
estimate we make.  In our opinion, the allowance is adequate to absorb
losses inherent in our existing portfolio.  The decrease in the
allowance for finance receivable losses at June 30, 2004 when compared
to June 30, 2003 was due to net decreases to the allowance for finance
receivable losses through the provision for finance receivable losses
during the period totaling $6.0 million.  These decreases were in
response to our lower levels of delinquency.

The allowance as a percentage of net finance receivables at June 30,
2004 decreased primarily due to improved net charge-off and
delinquency statistics caused by the improving economy and a higher
proportion of net finance receivables that were real estate loans.

Charge-off coverage, which compares the allowance for finance
receivable losses to net charge-offs (annualized), improved for the
three and six months ended June 30, 2004 when compared to the same
periods in 2003 due to lower net charge-offs.
<PAGE> 27

Insurance Losses and Loss Adjustment Expenses

Insurance losses and loss adjustment expenses were as follows:

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Claims incurred          $19.0          $19.4    $41.4          $42.0
Change in benefit
  reserves                (1.0)          (4.2)    (2.3)          (6.5)

Total                    $18.0          $15.2    $39.1          $35.5

Amount change            $ 2.8          $(4.6)   $ 3.6          $(6.3)
Percent change             19%          (23)%      10%          (15)%


The change in benefit reserves for the three and six months ended June
30, 2003 reflected the release of benefit reserves resulting from the
termination of a reinsurance agreement.  In April 2003, we terminated
a reinsurance agreement with a non-subsidiary affiliate and reversed
$3.6 million of annuity reserve expense and annuity premiums that we
previously recorded.


Provision for Income Taxes

                          Three Months Ended       Six Months Ended
                               June 30,                June 30,
                          2004          2003      2004          2003
                                     (dollars in millions)

Provision for income
  taxes                  $ 61.4        $ 53.4    $121.1        $ 99.1
  Amount change          $  8.0        $  9.6    $ 22.0        $ 13.1
  Percent change            15%           22%       22%           15%

Pretax income            $168.6        $147.3    $333.0        $277.0
Effective income
  tax rate               36.41%        36.25%    36.36%        35.77%


Provision for income taxes increased for the three and six months
ended June 30, 2004 when compared to the same periods in 2003
primarily due to higher taxable income.


Asset/Liability Management

In an effort to reduce the risk associated with unfavorable changes in
interest rates not met by favorable changes in finance charge yields
of our finance receivables, we monitor the anticipated cash flows of
our assets and liabilities, principally our finance receivables and
debt.  We fund finance receivables with a combination of fixed-rate
and floating-rate debt and equity.  Management determines the mix of
fixed-rate and floating-rate debt based, in part, on the nature of the
finance receivables being supported.
<PAGE> 28

We limit our exposure to market interest rate increases by fixing
interest rates that we pay for term periods.  The primary means by
which we accomplish this is by issuing fixed-rate, long-term debt.  To
supplement fixed-rate debt issuances, AGFC also alters the nature of
certain floating-rate funding by using interest rate swap agreements
to create synthetic fixed-rate, long-term debt, thereby limiting our
exposure to market interest rate increases.  Additionally, AGFC has
swapped fixed-rate, long-term debt to floating-rate, long-term debt.
Including the impact of interest rate swap agreements that effectively
fix floating-rate debt or float fixed-rate debt, our floating-rate
debt represented 37% of our borrowings at June 30, 2004 compared to
43% at June 30, 2003.  Adjustable-rate net finance receivables
represented 22% of our net finance receivables at June 30, 2004
compared to 24% at June 30, 2003.



Item 4.  Controls and Procedures.


(a)  Evaluation of disclosure controls and procedures

     The conclusions of our principal executive officer and principal
     financial officer about the effectiveness of the Company's
     disclosure controls and procedures based on their evaluation of
     these controls and procedures as of June 30, 2004 are as follows:

     The Company's disclosure controls and procedures are designed to
     ensure that information required to be disclosed by the Company
     is recorded, processed, summarized and reported within required
     timeframes.  The Company's disclosure controls and procedures
     include controls and procedures designed to ensure that
     information required to be disclosed is accumulated and
     communicated to the Company's management, including its principal
     executive officer and principal financial officer, as appropriate
     to allow timely decisions regarding required disclosure.

     The Company's management, including its principal executive
     officer and principal financial officer, evaluates the
     effectiveness of our disclosure controls and procedures as of the
     end of each quarter.  Based on an evaluation of the disclosure
     controls and procedures as of June 30, 2004, the Company's
     principal executive officer and principal financial officer have
     concluded that the disclosure controls and procedures have
     functioned effectively and that the condensed consolidated
     financial statements fairly present our consolidated financial
     position and the results of our operations for the periods
     presented.

(b)  Changes in internal control over financial reporting

     There was no change in the Company's internal control over
     financial reporting during the three months ended June 30, 2004,
     that has materially affected, or is reasonably likely to
     materially affect, the Company's internal control over financial
     reporting.
<PAGE> 29

                      PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

See Note 9. of the Notes to Condensed Consolidated Financial
Statements in Part I of this Form 10-Q.


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

(a)  Exhibits.

     Exhibits are listed in the Exhibit Index beginning on page 31
     herein.

(b)  Reports on Form 8-K.

     No Current Reports on Form 8-K were filed during the second
     quarter of 2004.
<PAGE> 30

                              Signature


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.


                                 AMERICAN GENERAL FINANCE, INC.
                                          (Registrant)


Date:  August 3, 2004            By  /s/ Donald R. Breivogel, Jr.
                                         Donald R. Breivogel, Jr.
                                     Senior Vice President and Chief
                                       Financial Officer
                                     (Duly Authorized Officer and
                                       Principal Financial Officer)
<PAGE> 31

                             Exhibit Index


Exhibit

 (12)      Computation of Ratio of Earnings to Fixed Charges

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

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

 (32)      Section 1350 Certifications