THE BLOG

18
Nov

Loan Tools You Need Today for Tomorrow. Lenders Beware: Biden + CFPB = More Heat!

Posted by / Strategy

By Jer Ayles: Face Facts, Small-Dollar Lenders!

A Biden Presidency means certain “pain” for Lenders. Business to Consumer [B2C], Business to Business [B2B], MCA [Merchant Cash Advance], payday loans, installment loans, car title loans, line-of-credit loans, Fintech, wage advance… all will face increased scrutiny, compliance issues, and increased legal costs.

Of course, CONSUMERS will be the biggest losers because we still have roughly 40%+ of USA households who cannot access $400 cash when facing a financial emergency! And it’s these high-risk folks who must pay for access to our cash. No one else will lend to them! Banks & credit unions are dragged kicking and screaming into our space by the FED’s. This will continue to take years.  But the majority of these incumbents disdainfully believe they have built insurmountable moats and lack the vision to acquire or collaborate with us. Failing this trend, they will go the way of the dinosaur.

Image by Capri23auto from Pixabay

Lenders, have no fear!

“The business of lending to the masses” will continue to scale. Even during Covid and as the government printing presses continue to run, transaction volume is ticking up. Debt, borrowing, unexpected financial challenges, instant gratification… this DNA is in all the people of the world. Corona will end. The dollar and the Euro  “printing press” will stop. We’ll get back to living our lives. Another group of knuckleheads will be in charge. And round & round so goes the world.

What To Do? Focus on reducing overhead costs! Automate. Embrace AI. Reduce headcount while scaling transactions! Integrate with the tools already available TODAY!

Our industry has always been under constant threat; kinda like Trump. The only demographic that likes us is OUR CUSTOMERS! Unfortunately, our elite media & elected representatives do not care about our customers unless it’s election time. The bureaucrats in D.C. along with Fintech “lenders,” “Buy Now & Pay Later” embedded Apps, wage advance platforms, Fintech “leave a 15% default tip + $4.95 to accelerate your $75 loan via ACH + help us plant a tree,  remnants of Operation Choke Point, bank discontinuance issues, this recurring universal 36% APR cap theme running through State and Federal hallways and on and on… continue to attempt to destroy us. And yet here we are! $40B in fees last year! Our industry has some of the very brightest, savvy, connected, sophisticated entrepreneurs in ANY vertical! Why? Because our inventory, our product, our service IS MONEY! AND EVERYONE WANTS SOME!!

There is a multitude of solutions available NOW that will reduce your customer acquisition costs [CAC], easily & cheaply verify your applicant’s ability to pay, underwrite, process, fund, collect, and remarket. Wash, rinse, dry, repeat. That’s the cycle that guarantees your success. This is the history of mankind. [Again, read “Debt: The First 5000 Years.”]

YOUR key to success is awareness! Did you enjoy your latest Zoom Convention? Learn anything? Enjoy the after-hours bar scene like the good old days? Were you able to sort through all the B.S? I know! You need to hire a… NAME YOUR POISON! A lawyer perhaps 🙂

Here’s the skinny! The following NEW tools are what YOU NEED!

  • Customers. If you’re already in business PAY for referrals. The average CAC today is $287. Pay your current customers a referral fee IMMEDIATELY. If you’re a brick-n-mortar, offer to pay $50 cash if your current customer refers a friend who qualifies for a loan; any size loan. It’s not your referral customer’s fault their “friend” only qualified for $125!  Pay via ACH, the Cash APP, PayPal, a credit to their debit card… WHATEVER! Online Lenders MUST follow this strategy as well. A $50 funded customer IS A STEAL! Do you really want to continue to buy $5.00 leads with 2% conversion rates? And not own the customer data?
  • Instant Wage & Income Verification: IWVPro.com is your path to collaborating with a white-labeled Fintech platform enabling you to instantly in real-time verify the income claim(s) your borrower/applicant provides to you. IWVPro.com is virtually a data pipe to thousands of the largest employers in the USA & Canada. ADP, Walmart, Target, Uber, Lyft, Del Taco, Pizza Hut, Kentucky Fried Chicken, Best Buy, UPS, USPS… AND GROWING WEEKLY! It’s cheap & immediate! Will you get a “hit” 100% of the time? NO! [Just like IBV] It is a must tool! You get the wage data BEFORE it hits the bank statement. What? Your customer claims they cannot make their payment this week because they were laid off or their hours were reduced? B.S. You can determine they drove 12 hours last night for Uber, earned $180, driving a 2017 Toyota Camry license plate IOUMONEY, 7 rides covering 112 miles! You can tell them you know this WHILE YOU ARE ON THE PHONE WITH THEM! Again, visit https://iwvpro.com/ for details
  • Instant Bank Verification: the good old days of faxing bank statements are long gone. So is the need for customers to bring in their Photoshopped statements! Instant, real-time bank statement views have been around for a while. I know who does it cheaper, faster, stronger, more powerful than a locomotive… Oh, wait! Sorry, went off track. That was Superman. Just want to make certain you’re still reading my diatribe. If you are, text IBV and your name and email to 702-208-6736 and I’ll intro you to the VERY best & the brightest IBV provider in our industry. And, I PROMISE YOU this won’t cost you an extra dime! Jer
  • Artificial Intelligence for Bad Debt Negotiation: IOUUmpire.com is your connection to the white-labeled platform enabling you to settle your 30+ day “bad” paper with your customer without USING YOUR EMPLOYEES or a CALL CENTER! Your past-due customer is dead to you? Zero communications? Phone calls, direct mail, employer, text… = nada? So, your only option is to sell your paper for $.04 on the dollar? NOPE! The customer owes you $1000 and will not talk to anyone in your office? Provide them with a link to YOUR BRANDED web page. In your Dashboard, make a decision to settle with this “bad boy” for any amount you choose. In this example, let’s say $200. [$1000 sold at $.04/dollar = $40.] Your message is nice and friendly; folksy. “Dear Mr. Jones, let me make a deal with you that you can’t refuse. You don’t have to talk with a soul. Here’s your personal link. Allow me to cut you a deal and end these ceaseless calls, emails, texts…” Then, just kick back and relax. IOUUmpire’s robot – we call ours Frieda – will “work” 24/7/365 negotiating with your “dead” debtor. Your debtor logs in sees $1000 due, offers $75. Anna counters $833. Debtor counters $125. Anna counters $693. Offer, counter-offer, offer, counteroffer… “Congratulations, we have a deal, Mr. Jones! $397.00” Mr. Jones then lands on your payment page and pays in full or you allow payments. Again, visit IOUUmpire.com to learn more. 
  • Tribal Lending: Going stronger than ever! This model has become more sophisticated and has evolved substantially since the “Scott Tucker Days.” Just like the casino industry, the tribe Lending Model [TLE] has become much more acceptable to all players and we offer the best talent, resources, and IP available! There is a multitude of federally recognized Native American Indian tribes in search of additional capital to meet the overwhelming demand from borrowers across the USA. You can earn incredible returns on your money. Visit Leaning Rock Finance Consultancy for details.
  • $90 funded loans: Want a turnkey funded loan? Don’t want to deal with buying leads & underwriting? Text “Funded loan in a Box!” with your name to Jer: 702-208-6736.
  • Mobile App: Do you need a white-labeled Mobile App with your brand/logo… IOS & Android – We are live! Save thousands of dollars and months of time with our latest Phone App! It has YOUR BRAND! It’s YOUR customer for life on that phone. Expand beyond your store boundaries & a website.  Text “Mobile App” and your name to Jer at 702-208-6736 for info.
  • Payment Processing & Banking: I know them ALL and I know who can get the job done correctly with zero reserves and fair pricing! No B.S.  Text Jer at 702-208-6736
  • Online Car Title Lending: Want to offer collateralized car title loans in any state without having to engage in a face-to-face transaction? 36% APR capped states not a problem for our Team! These loans are collateralized by the title to the borrower’s automobile! Very low risk. VERY low LTV! We are live! You can run your own show or invest with us and earn a handsome ROI! [Debt/equity/blended deals available. Yes, Jer 702-208-6736
  • Finally, there are many more tools for lenders available but I’ll save you from having to continue to FOCUS. Just know that  “the business of lending to the masses”  is going nowhere but UP! [You can access many of them here where our vendors and suppliers list their services: Click “TheBusinessOfLending.com/Ressources.”

If you want to get down and deep into the weeds with me, reach out. I’m a gun for hire!

    • My Team and I offer consulting services for ALL aspects of “lending to the masses.” Whether you’re a de novo or seasoned portfolio in need of counsel, let’s explore.
    • The “Bible.” Our industry famous Course: “The Business of Lending to the Masses” currently version 74. We’ve sold over $1M of our courses to virtually EVERYONE in our industry! Want to know ALL the ins & outs of payday loans, installment loans, title loans, state-by-state licensing, Tribal Model, CAC, underwriting, onboarding, processing, software, IBV, IVW, collections, banking, Operation Choke Point, website development, call centers, artificial intelligence platforms, Fintech developments… visit TheBusinessOfLending.com for details.
    • Hourly consulting on specific initiatives.
    • Flat rate projects. De novo to M & A. and everything in between.
    • Recruiting. Do you need to hire a key executive? Reach out. I know everyone available.
    • Invest your dollars with experienced operators who are Lending today while employing all the state-of-the-art Tools mentioned here!
    • Brainstorming. Do you have an idea? An area you would like to explore? Reach out for a free exploratory conversation. TrihouseConsulting@gmail.com

The Impact of the Biden Election on Our Industry: “The Business of Lending to the Masses.”

CFSA- The Community Financial Services Association of America

The following content is a portion we ripped off from Law360 a great resource and worth every penny! Click here to read their entire Biden/CFPB article: Law360.com

Payday Lending

Under President Trump appointed Kathy Kraininger, the CFPB revoked portions of the “Payday Lending Rule” that had determined as an unfair and abusive practice to make payday and vehicle title loans without determining a borrower’s ability to repay.

This revocation was executed by regulation after the bureau “reevaluated the legal and evidentiary bases for those provisions and determined them to be insufficient.”

Debt Collection

The CFPB finalized its debt collection practices rule. It places limits on debt collectors’ attempts to reach borrowers/applicants and allows borrowers to opt-out of enabling collectors to contact debtors via e-mail, text messages, or “other media.”

The CFPB could revise the final rule before it takes effect!

Fair Lending

V.P. Biden has previously stressed that “fair lending” — whether for mortgages, small businesses, or consumer loans — is a priority of his administration. Per LAW360 experts, the CFPB “could continue the development of rules implementing ECOA, including disparate impact, accessibility for limited-English-proficiency speakers, advertising to disadvantaged groups, discrimination based on sexual orientation and gender identity, and small-business lending.”

Summation

A President Biden Administration in conjunction with the Supreme Court’s decision in Seila Law means that “consumer finance companies can expect a significant change in the focus and tenacity of the CFPB.” A President Biden will be able to set the bureau on a new path immediately.

IF the Senate remains Republican-controlled his ability to impact a substantial structural change will be minimal.

Jer Ayles: 702.208.6736 Cell

Jer@TheBusinessOfLending.com

https://www.linkedin.com/in/jerryayles/

https://twitter.com/paydayloanguy

https://TheBusinessOfLending.com

27
May

Lending to the Masses? It’s About the Job. Which States Have Greatest Demand for Loans!

Posted by / Strategy

You’re a Lender! You’re funding unsecured B2C loans? You have no leverage! Sure, credit “dings” will influence a tiny percentage of your borrowers. But, your borrowers will pay their rent, buy food and try to hang on to their transportation before they elect to pay you.

“Many employees in the ‘so-called upper class’ are experiencing their six-figure incomes slip through their fingers. A Nielsen study found that one in four families making $150,000 a year or more are living paycheck-to-paycheck, while one in three earning between $50,000 and $100,000 also depends on their next check to keep their heads above water.

Attention B2C Lenders! Consumers need CHOICES! Competition = < Customer Acquisition Costs = lower fees enabling your company to take market share from incumbents, prepare for “The Corona Aftermath,” and scale BIG! 

Imagine if your customer had YOUR app on THEIR smartphone. They suddenly realize they need $100 to make it until their next paycheck. If you’re a Lender with 1000’s of customers having your own branded app on their phone, you’re IN! A couple of clicks and your borrower has $$ on their virtual debit card or in their bank account within minutes!

Think of the ramifications. Zero friction for your customers. A continuing RELATIONSHIP with your clients. As a Lender, you have a captured audience with tons of historic data about their previous loan history with you. You can charge your 1000’s of customers a monthly subscription fee [Dave.com charges $1/month to 5M borrowers with their app as of last September $5,000,000 per month even if they fund zero loans!! You could make money by arbitraging the interchange fees. Dave.com charges $4.95 to “accelerate the ACH into their borrower’s bank account. And let’s not even talk about “THE TIP!”

The best part? Today, Lenders can secure their own privately branded IOS or Android app for pennies! Your app! Your BRAND! Your life-time borrower. Your data! A no-brainer… Ask me how: Click Jer at “The Business of Lending to the Masses!”

Pre-Corona – January 2020 – CareerBuilder found that 78% of U.S. workers are living paycheck to paycheck. 

Source: WalletHub

And this just in from “The Hill:” Tenants are afraid mass evictions will take place in the coming weeks as eviction moratoriums across the country begin to expire. 

“As the Coronavirus pandemic began to take a grip on the country in March, dozens of states passed eviction moratoria that protect tenants from being removed from their homes. But landlords in most states are still able to file eviction notices, meaning some tenants only have until the day their state’s eviction orders expire until they have to leave their homes. ”

“In Texas, where the pause on eviction proceedings ended on May 19, a local CBS affiliate found that landlords in North Texas had filed at least 1,111 eviction petitions between March 16 and early May.”

“Eviction protections expire in Iowa on May 28. Residents in Florida could begin facing eviction as soon as June 3, and in Washington state evictions protections are lifted on June 4.”

“In California and New York, two states with giant populations, eviction protections expire in late June.”

“Maya Brennan, a housing policy expert at the Urban Institute, said it won’t take long to see the effects of evictions on communities. ”

“The eviction court process is usually very quick and efficient,” Brennan said.”

[Anyone realize that the tenants thrown out of their homes will have to go somewhere? Homeless housing? A revolving door? Secure housing from the landlord who just evicted their previous tenant for failure to pay their rent. It’s an untenable situation! But allow me to continue…]

J. Edward Moreno from “The Hill” goes on…

“In some cases, tenants are accumulating rent payments even as their source of income is cut off. With no way to make up lost wages, it’s unclear how tenants will make up their rent.”

“The coronavirus relief bill signed into law by President Trump in March suspended evictions through July 24 for those who receive federal housing assistance and for nonpayment of rent on properties with federally backed mortgages. The Urban Institute estimates that the federal moratorium protects more than 1 in 4 rental units nationwide or about 28 percent.”

“Rep. Ilhan Omar (D-Minn.) in April introduced the Rent and Mortgage Cancellation Act, which would cancel rent for tenants and transfer mortgages to the federal government and allow landlords to recoup their rent costs. Efforts by Omar and other progressives to include the bill in more recent corona virus relief legislation fell flat.”

“As the country continues to reel from mass unemployment, a U.S. Census Bureau survey published last week found that 21 percent of Americans are not sure if they will be able to pay rent next month.”

“According to an Urban Institute study, 10 percent of parents and guardians with children under age 19 living at home said they were late or didn’t pay their rent or mortgage between March and April because of financial hardship.

“We are absolutely terrified,” said Cea Weaver, spokesperson for the New York-based tenant coalition Housing Justice for All. “The No. 1 message that we get is from people who are not sure what to do and asking for support, and what we have to tell them is there is no option.”

“It’s also becoming increasingly clear that the economic blow of the pandemic will last until even after states begin to reopen in the coming weeks. According to a recent study from the University of Chicago, 42 percent of coronavirus-related job losses aren’t expected to recover

“So I think that we should expect that your new income is your new income,” Weaver said. “Maybe things will change a little bit, but not a lot.”

“During the 2008 financial crisis, Congress passed the Protecting Tenants in Foreclosure Act, which banned the removal of any tenants being evicted if the eviction was solely due to the property being in foreclosure. But without federal lawmakers passing rent relief legislation this time around, state lawmakers are taking on the push as their states face massive budgetary fallout.”

“New York State Senate Majority Leader Michael Gianaris (D), introduced legislation in March that would suspend rent payments for those affected by the pandemic. The bill hasn’t passed committee as the state’s legislative session draws to a close on June 2.”

“Illinois Gov. J.B. Pritzker (D) announced Tuesday he would extend the ban on evictions in his state past Friday when Illinois’s stay-at-home order is scheduled to expire. His move comes as the state legislature has also failed to pass legislation that would cancel rent and mortgage payments statewide for those experiencing coronavirus-related hardships.”

“California Gov. Gavin Newsom’s (D) March eviction order prevented renters from being physically evicted from the premises, but it didn’t actually prevent landlords from filing the eviction in court preemptively. The Judicial Council of California later extended the governor’s order to prevent nearly all eviction filings in the state.”

“At the time, the California Apartment Association said the move is “unnecessary, overly broad,” and “invites tenants who have the financial wherewithal to pay their rent to withhold it, leaving landlords struggling to cover their own bills and to keep employees on their payroll.”

“Shanti Singh, a spokesperson for Tenants Together, a housing nonprofit organization based in San Francisco, said tenants have been contacting their hotline at record numbers this month.”

“Though the organization does not provide formal legal aid, they said most renters reach out seeking more information about what their rights are in these circumstances. Some have said they are working out informal agreements with their landlords to avoid eviction.”

“We are deeply concerned that there’s going to be an eviction cliff when these phases of emergencies are lifted,” she said.”

Here’s a link to “The Hill” original piece: The Hill

Are you itching to get into “the business of lending to the masses?” Do you comprehend the SIGNIFICANT tsunami for the demand for small-dollar loans in Q2, Q3, Q4, and beyond?   Are you a vendor, call center operator, payment processor, lead generator, loan management software provider, a lawyer… interested in learning more about this industry? Get a copy of our “Bible: How to Loan Money to the Masses Profitably.” Click to view the “Table of Contents” and get our 500+ page PDF delivered into your inbox immediately.

Finally, for perspective on money and lending read/listen to “Debt: The First 5000 Years” and “The Ascent of Money.” two excellent books that will enable you to grasp the significance of money lending over the millennia and enable you to recognize that the masses will ALWAYS be living paycheck to paycheck!


Grab a copy of “How to Loan Money to the Masses Profitably.” Immediate PDF download is available! You could be learning in 60 seconds… Or, schedule a 1:1 private call with our founder, Jer Ayles. Click to schedule…

Jer on LinkedIn

How to open a loan business

Click the IMAGE to Invest in our Course: “How to Open/Improve a Consumer Loan Business”

20
May

$550 Million Settlement with Santander Subprime Auto Loans: Arizona AG

Posted by / Strategy, Tribe

I’ve been pounding the table lately regarding the need for ALL entrepreneurs in ALL industries to collaborate with competent experts who know how to legally prepare you for this litigious society we live in! Yes, I’m well aware of the propaganda! “There are more payday loan stores in the USA than there are McDonald’s.” B.S!

  • Store count is down. There is this “thing” called the INTERNET.
  • Everyone has a smartphone. We have a white-labeled app enabling the masses – even those lacking a bank account – to access a few hundred bucks within minutes via a virtual MasterCard, ACH deposits… We enable the borrower to select their own custom payment plan. They choose when and how to pay us back. Our lower loan production costs = lower CAQ costs = lower customer fees < APR’s
  • Implementation of strategies for asset protection and tax reduction is NOT illegal. Attorney Howard Rosen recently discussed this topic in-depth here: Howard Rosen, Esq. 
  • It’s extremely expensive and time-consuming to secure lending licenses, compliance/regulatory IP state-by-state, followed by annual audits by incompetent government employees. For many entrepreneurs and consumers, the tribal model is a better solution. [Explore here: The Tribal Sovereign Lending Model.]
  • The payday loan product IS A DINOSAUR! Even ENOVA, the publicly traded lender that originally launched as CASHNETUSA in the ’90s disclosed on their last Quarterly Financial Report that single payment [payday loans] represents 2% of their loan portfolio. And they lent $380,000,000 in this 3-month period! CURO is about the same!
  • Big Brother, PEW, CRL, CFPB … continue to dwell and waste taxpayer money on OLD NEWS!

Here’s the latest: More than 12,000 Arizona Car Buyers Eligible for Millions in Relief

PHOENIX—Attorney General Mark Brnovich, along with a coalition of 34 attorneys general, announced today a settlement with Santander Consumer USA Inc., one of the nation’s largest subprime auto lenders, that provides $550 million in relief for consumers, with millions more expected in additional deficiency waivers. More than 12,000 Arizona consumers will receive between $22.7 million and $41.5 million of relief (through restitution checks, in-kind relief, or debt forgiveness). The settlement resolves allegations that Santander violated consumer protection laws by giving high-interest loans to car buyers it knew could not afford them.

“Buying a car is one of the most important purchases a person makes in their life and companies involved in any transaction need to be as transparent as possible,” said Attorney General Mark Brnovich. “Santander knowingly put Arizonans into loans they couldn’t afford, setting them up for years of financial hardship. This settlement holds Santander accountable and provides thousands of Arizona consumers with much-needed financial relief.”

Based on the multistate investigation, the coalition alleges that Santander, through its use of proprietary credit scoring models to forecast default risk, knew that certain consumer segments were likely to default, yet issued high-interest loans to them anyway. Santander exposed these borrowers to unnecessarily high levels of risk through high loan-to-value ratios, significant back-end fees, and high payment-to-income ratios. The attorneys general also allege that Santander’s aggressive pursuit of market share led it to underestimate the risk associated with loans by turning a blind eye to dealer abuse and failing to monitor dealer falsification of income and expenses. Finally, the coalition contends that Santander engaged in deceptive servicing practices and actively misled consumers about the risks of partial payments and loan extensions.

Under the settlement, which is pending court approval, Santander is required to provide relief to consumers and is required to factor a consumer’s ability to pay the loan into its underwriting moving forward.

Santander will pay $65 million to the 34 participating states for restitution for certain subprime consumers who defaulted on loans between January 1, 2010, and December 31, 2019. For consumers with the lowest quality loans who defaulted as of December 31, 2019, and have not yet had their cars repossessed, Santander is required to allow them to keep their car and waive any deficiency balance on the loan, up to a total value of $45 million in deficiency waivers.

The settlement also includes significant consumer relief by way of loan forgiveness. In all, Santander has agreed to waive the deficiency balances for certain defaulted consumers, with approximately $433 million in immediate forgiveness of loans still owned by Santander, and additional deficiency waivers of loans that Santander no longer owns but is required to attempt to buy back from third parties.

Santander will also pay up to $2 million for a settlement administrator who will administer restitution claims, and pay an additional $5 million directly to the investigating states.

Arizona Consumer Settlement Terms

  • Consumer Restitution: Over 12,000 Arizona consumers who defaulted on loans between January 1, 2010, and December 31, 2019, will receive a check for at least $224.80, totaling over $2.7 million in restitution for Arizonans. This dollar amount is subject to increase depending on how many consumers can be located nationwide. If additional funds become available, a second check will be mailed out.
  • Loan Forgiveness:  Arizonans could receive up to $38.7 million in loan forgiveness. Of that amount, approximately $19.9 million for 1,425 loans will be forgiven immediately ($13,964.91 average per loan), and an additional $18.8 million for 1,966 loans that have been securitized by third parties will be forgiven if Santander can repurchase them ($9,562.56 average per loan).
  • In-Kind Relief: $45 million of in-kind relief will be provided to consumers with the lowest quality loans who defaulted as of December 31, 2019, and have not had their cars repossessed. Consumers can keep their vehicles and Santander will give consumers the title and waive any outstanding balance on the loan.
  • Consumer Protection: Additionally, the Arizona Attorney General’s Office will receive $30,000. The funds will be deposited into the Attorney General’s Consumer Revolving funds to be used for future consumer enforcement actions.

Santander has already identified the eligible consumers for each category listed above, and Santander or the claims administrator will attempt to contact those consumers. If you think you may be eligible or would like additional information, please visit http://www.santandermultistateagsettlement.com. Additional information on restitution checks and expected timelines will be available in the near future.

Moving forward, Santander cannot extend financing if a consumer has a negative residual income after taking into consideration a list of actual monthly debt obligations. Additionally, Santander is now required to test all loans that default in the future to see if the consumer, at the time of origination, had a negative income. The test must include an amount for basic living expenses. If the loan is found to be unaffordable and the consumer defaults within a certain amount of time, Santander will be required to forgive that loan.

Santander is barred from requiring dealers to sell ancillary products, such as vehicle service contracts. Santander will also implement steps to monitor dealers who engage in income inflation, expense inflation, and power booking, and Santander will enact additional documentation requirements for those dealers. Further, whereas Santander previously allowed these problematic dealers to waive documentation requirements on income and expenses, Santander no longer will allow such exceptions. If Santander has to use a defaulted mortgage or rent payment value, the amount of input must reasonably reflect the payment value for the geographic location. Finally, Santander will maintain policies and procedures for deferments, forbearances, modifications, and other collection matters that all employees must follow.

Joining Attorney General Brnovich in the settlement are the attorneys general of Illinois, California, Maryland, New Jersey, Oregon, and Washington, who comprise the executive committee; as well as the attorneys general of Arkansas, Connecticut, the District of Columbia, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

Copy of complaint.

Copy of Arizona AG Press Release.

Are you ready to jump into “the business of lending to the masses?” Are you tired of kicking tires, Googling your time away day after day trying to figure out how to loan money PROFITABLY while you sit on the beach, “work” in a coffee shop anywhere in the world, and build an asset that ordinary folks everywhere on our planet ALWAYS want and need? MONEY! Go big or go small. It’s your call.

ALL your questions are answered here: “How to Loan Money to the Masses Profitably.”

Your “inventory” is MONEY. It’s not rotting vegetables, yogurt machines, pizza ovens, a franchise… It’s CASH. And everyone needs CASH.

Here’s the “Table of Contents.” 

There has never been a better time to invest in yourself and open up this new paradigm of tools for lending delivered immediately to your Inbox.  This is not rocket science. The pieces to this puzzle have been built. You choose how to assemble them. Websites, apps, customer acquisition, underwriting, processing, funding delivery systems, cloud-based loan management software, collections, defaults, capital, pro formas, integrations, lead providers… These topics and more are in Version 74 of our “bible!”

CORONA? Yes, a real shame! Many incumbents will not survive, Their cost of capital was too high, they were caught over-leveraged and they failed to embrace the latest MOIP [Money Over Internet Protocol] strategies. What’s that mean for those of us left standing? OPPORTUNITY! The masses still need MONEY. More than ever! And, we will survive and prosper post-Corona! Are you ready?

Begin your journey here: “How to Loan Money to the Masses Profitably.” Devour it! Study it! Then, CALL ME on my Cell: 702-208-6736. Free 15 minutes. [Just tell me what is the last word in our “bible” on page 412.] I normally charge $400/hr. 

Who am I? Jer Ayles.

And Jer Ayles.

How to open a loan business

Click the IMAGE to Invest in our Course: “How to Open/Improve a Consumer Loan Business”

09
Apr

CORONA: The State of the PDL, Small-Dollar, Installment Loan Industry & CURO PR.

Posted by / Strategy

I feel like a therapist!

Inbound calls, texts, and emails from balance sheet lenders, investors, tribe/state licensed portfolio managers, lead generators, title lenders, lawyers, VC’s, family offices…NON STOP!

“What should we be doing?

In a nutshell? Review your P & L. Eliminate every line item, renegotiate with critical landlords & vendors, eliminate every expense possible. Focus on collections, repos, and unnecessary costs.

PREPARE FOR THE AFTERMATH! [Hint: When we come out of this, tremendous opportunities will manifest!]

Key Themes:

  1.  Survival: Hoard cash. “Keep your powder dry,” as they say. STOP LENDING!

  2. Focus on getting your money!

  3. MOIP: “Money Over the Internet Protocol.” Prepare/embrace the phone!

  4. Digitize your lending operation.

Look around you! 70% of your competition will be gone!

The business of lending to the masses has radically changed! The “good old days” are NOT returning.

One thing will not change; DEMAND by consumers for cash!

How to open a loan business

NEED HELP? Schedule a call with Jer & the Team. Click here: Jer Ayles & Team

Now, for your pleasure and a few macro ideas, a PR Piece from CURO [a publicly traded, multi-state lender].

CURO Provides Business and Financial Update

04-08-2020

“Announces Closing of $200 Million Asset-Backed Revolving Credit Facility”

“WICHITA, Kan.–(BUSINESS WIRE)– CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader in providing short-term credit to underbanked consumers, today announced its response to the COVID-19 pandemic and provided an update on other important business and financial matters. This update is not intended as a full business and financial update and the Company currently expects to report earnings for the first quarter ended March 31, 2020, in a timeframe consistent with its past practices.

Financing and Cash: The Company closed today an incremental Asset-Backed Revolving Credit Facility (the “Credit Facility”) to provide financing for U.S. installment and line-of-credit receivables, including those generated under its technology, marketing and servicing relationship with Stride Bank. The Credit Facility provides for $100.0 million of initial borrowing capacity and, subject to obtaining additional commitments, the ability to expand borrowing capacity up to $200.0 million. Concurrent with the closing, the Company drew $35.2 million on the facility. The Company had $180.3 million of cash at March 31, 2020, including $41.5 million of restricted cash. On a pro forma basis, assuming the closing of the Credit Facility as of March 31, 2020, the Company had $215.5 million of cash, including $41.5 million of restricted cash.

Customer Care Program: In light of the COVID-19 pandemic, in mid-March, the Company established an enhanced Customer Care Program, which re-focused its efforts to help the Company’s customers during this unprecedented time. CURO has responded to over 35,000 calls and emails from customers who report varying degrees of impact and hardship related to COVID-19. CURO’s Customer Care Program enables our team members to provide relief to customers in various ways, ranging from due date changes, interest or fee forgiveness, payment waivers, or extended payment plans, depending on a customer’s individual circumstances. The Company has also temporarily suspended all returned item fees.

Store Operations and Employees: The Company’s 416 stores in the United States and Canada have remained open and, where applicable, have been designated as an essential service by local regulations. In an effort to keep its employees and customers safe, CURO has reduced store hours, with all stores now open Monday to Saturday from 10am to 6pm, while adhering to strict social distance guidelines throughout the store. The Company has committed to pay all of its store personnel their full-time wages through May 2, 2020, regardless of staff scheduling changes that have resulted from COVID-19. The Company also implemented an emergency leave pay plan to ensure that employees are paid when they are unable to work due to COVID-19. In light of the impact this pandemic has on the Company’s front-line teammates, CURO has committed to pay a bonus to all working store teammates to provide additional relief.

Contact Center and Corporate Support Operations: Virtually all 1,100 of the Company’s contact center and corporate support personnel in Wichita, Toronto and Chicago are now successfully working from home.

Underwriting and Originations: CURO has adjusted its credit underwriting models to tighten approval rates and enhance its employment and income verification practices for both the store and on-line lending platforms. CURO has seen a significant reduction in new customer applications and originations and the Company expects this trend to continue until the public health crisis abates. The Company has also recently seen an increase in delinquencies and net charge-off rates when compared to prior year periods.

In light of the uncertainties surrounding the negative business, financial and other impacts of COVID-19:

Guidance: The Company is withdrawing its full-year 2020 guidance.

Short-Term Incentive Program: On April 2, 2020, the Company’s Board of Directors canceled the 2020 Short-Term Incentive Program, an annual cash bonus program covering approximately 200 corporate support managers and executives. The Company believes it is important at this time to focus its resources on support of customers and front-line personnel in its store and contact centers.

Share Repurchase Program: On March 15, 2020, the Company’s Board of Directors suspended its previously-announced $25 million share repurchase program.”

ABOUT CURO

“CURO Group Holdings Corp. (NYSE: CURO), operating in the U.S. and Canada and powered by its fully integrated technology platform, is a market leader by revenues in providing short-term credit to underbanked consumers. In 1997, the Company was founded in Riverside, California by three Wichita, Kansas childhood friends to meet the growing consumer need for short-term loans. Their success led to opening stores across the United States and expanding to offer online loans and financial services across two countries. Today, CURO combines its market expertise with a fully integrated technology platform, omni-channel approach and advanced credit decisioning to provide an array of short-term credit products across all mediums. CURO operates under a number of brands including Speedy Cash®, Rapid Cash®, Cash Money®, LendDirect®, Avío Credit®, Opt+®, and Revolve Finance®. With over 20 years of operating experience, CURO provides financial freedom to the underbanked.”

Source: CURO Press Release

 

 

 

25
Mar

Payday Loan Industry Ready to Provide Emergency Funds for Corona

Posted by / Corona

By: Jer Ayles. Our communities rely on the “business of lending to the masses” for much more than small-dollar loans to help them in a jamb!  Money transfer to friends and family in other cities and countries, money orders for the millions of households in need, cell phone top-offs…

For those pessimists who are reading, DO NOT THINK this is about making money! This is about SURVIVAL! It’s about our Teammates hanging in there and literally risking their lives to be of service to our customers, our community and our nation!

Here’s a partial list of typical services and products:

  • ATM
  • Bill Payments
  • Business Services
  • Check Cashing
  • MoneyGram
  • Money Orders
  • Mobile Top-up
  • Money Transfers
  • Tax Services
  • Title Loans

Trade associations representing the payday lending industry announced that they are proud to provide essential products to individuals and businesses and stand ready to provide needed liquidity in a time of business disruption.

“During this difficult period, it is critical that the 60 million unbanked or underbanked Americans in this country have ready access to basic financial services through companies and people they trust, in the communities where they live,” the statement from Financial Service Centers of America (FiSCA) Executive Director Ed D’Alessio and Community Financial Services Association of America (CFSA) Chairman, D. Lynn DeVault stated. “Reflecting this fundamental need, state and local governing authorities from New York to San Francisco have deemed community financial service providers and their services as ‘essential.’ We applaud these local elected officials working tirelessly to serve the public and ensure access to critical services.

My Team is assembling an important “First Responder Action Report” for our industry. Topics include ALL aspects for business survival during this catastrophic pandemic and steps to take to prepare for the aftermath. Hint: If you follow my counsel, you may not only survive but resoundingly prosper in a multitude of incarnations! This will end! Our industry will rebound BUT things will be “different!” If you have an interest, we are building a ‘First Responder” list.  Email: TrihouseConsulting@gmail.com Put CORONA in the Subject.

For Lenders & Vendors, sign-up here to receive an instant alert regarding its availability  COVID-19 impact on our industry:

03
Mar

How to Start a Loan Business in Canada, USA & More

Posted by / Courses

How to Start a Payday Loan Business in Canada

NOTE: We are consultants for entrepreneurs who want to start or improve their payday loan business operations. We are not Lenders. We teach, consult, offer Courses and provide boot camps and phone consulting services enabling entrepreneurs with a desire to enter this industry to avoid failure.  We opened our first location in 1998 in Garden Groove, Calif. Today we own stores and online lending portfolios. Additionally, we teach, lecture, speak, consult entrepreneurs and companies in “The Business of Lending to the Masses.”

How to start a consumer loan company

For more information about our services, visit: Start Here

The following is a VERY BRIEF overview extracted from our 500+ page Course: “How to Lend Money to the Masses Profitably.”

Are you interested in starting a payday loan company in Canada? In one province? Online?

First Question: What is a payday loan

In Canada, a payday loan is a short-term loan with high fees for solving immediate, short-term financial emergencies. 

Payday loans are “expensive” money. Generally, depending on the Canadian Province, a payday loan consumer may borrow up to $1,500. 

Borrowers must pay the loan back from their next paycheque. Failure to pay back these loans on the promised due date result in more fees and interest charges.

This will likely increase your loan principal. 

Payday loans are designed to solve a cash shortfall until your next pay. Avoid using them for ongoing costs such as rent, groceries or utility bills. If you use them in this way, you may end up in financial trouble.

Both private and publicly traded companies offer payday loans in stores [brick-n-mortars] and online.

What to expect when you start a payday loan business

Here’s what you can expect if you’re considering opening a payday loan company.

  • The easiest method to determine the legalities involved is to simply get a payday loan. Visit your nearest competitor in your city and go through the process.
  • Get copies of everything; all the forms.
  • Look around! Whip out your phone and take pictures of any wall charts, regulatory info, consumer help alerts posted inside the location…
  • If there are payday loan stores around you, you know they’re legal!
  • So… get a payday loan/installment loan/title loan… Then, pay back the money in a couple of days. Consider this your first “investment” in your new business.
  • PS: If you cannot qualify for a loan at your competitor’s store, get a “shill.” Pay their fees.

Next:

  • Study our Course. It’s available here: “The Business of Lending to the Masses Profitably!” 
  • Our Course covers EVERYTHING you need to know about starting and operating a payday loan, installment loan, car title loan… business-to-consumer [B2C} loan business].
  • We thoroughly teach online and storefront models.
  • We provide sample consumer contracts, your State/Province licensing regulations and licensing forms.
  • We provide specific Chapters devoted to starting, getting customers, loan management software, underwriting consumers, funding your qualified borrowers, collecting your money, websites, marketing, employee hiring, strategies and tactics for learning from your competitors what does and does not work in your geographic area and much, much, more!
  • For a complete “Table of Contents” to our course, Click the Image:

Payday loan lenders typically require the following for borrowers to qualify :

Generally, payday lenders will require proof that a consumer has:

  • a regular income
  • a bank account
  • a permanent address

Before funding a payday loan, payday lenders will require borrowers to do one of the following:

  • fill out a form that will allow the lender to withdraw the total loan amount, including fees, directly from your bank account when the loan is due (also called a pre-authorized debit)
  • provide a post-dated cheque for the total loan amount including fees

Getting money from a payday lender to a qualified borrower

In most cases, the payday lender will deposit money into your bank account via an ACH, a check or, in a storefront environment,  give the borrower cash.

However, in some cases, payday lenders may require the borrower to take accept loan proceeds on a prepaid card. It may cost extra to activate and use the card.

Paying back a payday loan

Some payday lenders require consumers to repay the loan at the same location where they got the loan. Others offer online payment. We recommend and teach how a Lender can offer a multitude of payment methods both online and offline.

The Consumer Loan Agreement

Make certain you employ loan management software to compute all fees, payment periods, loan principals, payment schedules, APR’s… We teach all this in our Course! Payday lenders must require their borrowers to sign an agreement that shows your loan costs, including interest, fees, and the due date. FULLY disclose EVERYTHING to the consumer! [Our Course offers names and recommendations to the best companies offering cloud-based software enabling you to run a payday loan business from anywhere in the world!]

Find out your province or territory’s payday lending rules by contacting your provincial or territorial consumer protection office.

How much money do payday loan companies make?

A payday loan, installment loan, car title loan… Lenders can make great profits. There are zero guarantees because profitability depends on the Lender.

Payday loans are very expensive compared to other ways of borrowing money. This is because:

  • Borrowers pay high fees
  • Borrowers are charged a higher interest rate than on a regular loan or line of credit
  • Borrowers will have to pay a fee if their cheque or pre-authorized debit doesn’t go through the bank
  • Borrowers – on average – pay $17.50 per $100 borrowed every two weeks. That’s a 600%+ APR!
  • So… a borrower gets a payday loan of $300 from their Lender. Two weeks later they pay $52.50 in fees + the $300. At least 40% of these borrowers at a minimum will not pay anything towards the loan principal so the borrower “rolls-over” their loan. Thus another two weeks pass and the borrower pays $52.50 in fees again.
  • The average payday loan small business has 400 to 600+ customers!

As a Lender, be aware that a payday loan business is not all “peaches and cream!” Whether online, storefront or “blended,” you will have costs, headaches, employees…

But, the potential for earning a SUPERIOR Return on your Investment [ROI] is tremendous.

After all, your inventory is MONEY! You are nor investing in and operating a fruit stand experiencing rotting inventory 😆

With hard work, knowledge, implementation of the latest technology and tactics, Lenders can grow big, earn extraordinary profits and achieve a very nice lifestyle. BUT, at least in the beginning, IT WILL BE HARD WORK!

Figure 1: Comparing the cost of a payday loan with a line of credit, overdraft protection on a chequing account and a cash advance on a credit card (Based on a $300 loan for 14 days)

Graphic demonstrating the high cost of payday loans compared to other credit options

The costs shown in this example are for illustration purposes only and are based on the following assumptions:

  • a payday loan costs $17 per $100 that you borrow, which is the same as an annual interest rate of 442%
  • a line of credit includes a $5 administration fee plus 8% annual interest on the amount you borrow
  • overdraft protection on a bank account includes a $5 fee plus 21% annual interest on the amount you borrow
  • a cash advance on a credit card includes a $5 fee plus 23% annual interest on the amount you borrow

What happens to your borrower if they can’t pay back a payday loan on time?

There can be serious consequences if borrowers don’t repay their loan by the due date.

They may include:

  • the payday lender will charge you a fee if there isn’t enough money in your account
  • your financial institution may also charge you a fee if there isn’t enough money in your account
  • the total amount that you owe, including the fees, will continue to accumulate interest
  • the payday lender could call your friends, relatives or employer in attempts to contact you to collect the money
  • the payday lender could sell the loan to a collection agency and this could appear on your credit report
  • the payday lender or collection agency could sue you for the debt
  • the payday lender or collection agency could seize your property
  • the payday lender could take money from your paycheques (also called garnishing your wages)

If you can’t make your payday loan payments on time, it can be easy to get stuck in a debt trap.

Infographic: Payday loans: Make sure you pay on time!

Payday loans : Make sure you pay on time! infographic – see long description

What to know to be a payday lender

The total cost of borrowing you can charge. Be sure to find out:

  • all the fees, charges and interest
  • the correct date the loan is due
  • if there is a maximum cost you can charge for a payday loan
  • What does your competition charge
  • Fees applied if you’re borrower is unable to pay back their loan on time.

Understand that:

  • a fee is often charged if your borrower’s cheque or pre-authorized debit is returned due to non-sufficient funds
  • these fees can range from $20 to $50
  • many provinces have rules about maximum fees for non-sufficient funds
  • the amount can be much higher in provinces and territories where the fee is unregulated

Ask if there is a “cooling off” period. This is a period, often a day or two, during which a borrower can cancel the loan with no explanation and without paying any fees. The laws in many provinces protect this right. Make sure to know the “cooling off” period information.

Payday lending rules 

Each province and territory has different rules and restrictions around payday lending. However, many online payday lenders aren’t licensed and don’t follow provincial rules designed to protect borrowers.

Canada Fees and penalties

Many provinces regulate payday lending fees and penalties.

NOTE to Payday Loan Lenders! Laws, rules, compliance, regulations are in constant flux! The information below is almost CERTAINLY not current as you read it! Invest in our Course for the latest, most current information!

Table 1 – Payday lending regulations by province
Province Maximum cost of borrowing for a $100, 2‑week payday loan Cooling off period to cancel the payday loan Maximum penalty for a returned cheque or pre-authorized debit
Alberta $15 2 business days $25
British Columbia $15 2 business days $20
Manitoba $17 48 hours, excluding Sundays and holidays $20
New Brunswick $15 48 hours, excluding Sundays and holidays $40 (default penalty)
Nova Scotia $19 Next business day $40 (default penalty)
Ontario $15 2 business days n/a
Prince Edward Island $25 2 business days n/a
Saskatchewan $17 Next business day $25

Restrictions

In the following provinces, a payday lender can’t extend or roll over a payday loan:

  • Alberta
  • British Columbia
  • New Brunswick
  • Nova Scotia
  • Ontario
  • Saskatchewan

A payday lender can’t ask a borrower to sign a form that transfers your wages directly to them in the following provinces:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Nova Scotia
  • Ontario
  • Saskatchewan

Provincial laws define what a payday lender can do when trying to collect a loan. This includes when and how often a payday lender can a borrower and what tactics you can use to get you to pay.

These laws exist in the following provinces:

  • Alberta
  • British Columbia
  • Manitoba
  • Nova Scotia
  • Ontario
  • Saskatchewan

Canadian Entrepreneurs:

For more information about what rules apply to payday lenders or to make a complaint, contact your provincial or territorial consumer protection office.

How to open a loan business

Click the IMAGE to Invest in our Course: “How to Open/Improve a Consumer Loan Business”

21
Feb

36% APR-In Defense of Payday Loans: Academics, Legislators, Banks, Tribes

Posted by / Strategy

By: Jer Ayles via LinkedIn or email Jer
The Business of Lending.com

Professor Lisa Servon [watch her interview positioned at the bottom of this Post] got off her butt and worked for months in the trenches “behind the counter” for RiteCheck, a check casher located in the Bronx and for an Oakland based payday loan lender.

Rather than pontificating like the majority of anti-payday loan commentators and academics do,  Professor Servon reported to work in a “live” storefront and talked to real people!

She wanted to learn, “Why do these folks CHOOSE payday loans, car title loans, installment loans, and check cashers to help them solve their financial problems. Why not simply pull out their credit card, tap into their savings, click their bank’s smartphone app – or visit their local branch IF one exists – ask friends, family, their church… ”

The results of her experience resulted in a balanced, fair-minded book, The Unbanking of America and the Video Interview below. Yep! Shocks the hell out of me!!

Get Professor Servon’s 2018 book! I have and it’s excellent. It’s balanced. NOT like the Gary Rivlin garbage on Amazon also. His book, “Broke USA: From Pawnshops to Poverty” is more of the same old sad sack “clickbait” stories that lazy media “tools” put out daily.[Here’s a direct link to Amazon OR visit Amazon.com and do a quick search.]

The so-called consumer protectionists [think of the CRL: Center for Responsible Lending], regulators, socialists, leftists fail to get off their duffs and TALK to real customers.

What Profesor Servon was willing to do certainly beats sitting in a faculty room chaise lounge and pontificating about a subject you have zero knowledge about nor personal experience with!

There is NO DOUBT we all have agendas. And these agendas are usually about money. The old saying, “Follow the Money” is a catchphrase popularized by the 1976 docudrama film “All the President’s Men,” which suggests corruption can be brought to light by examining money transfers between parties.

Note: The founders of CRL are Herbert Sandler and his wife Marion Sandler, founders of the Sandler Foundation. The Sandlers’ have been heavily criticized for their role in the 2008 financial crisis. Their California Savings and Loan financial company, Golden West, was one of the many banks to offer the adjustable-rate mortgages that were blamed for the subprime mortgage crisis. The Sandlers’ ties to the financial crisis were detailed by CBS’s 60 Minutes.

An investigation by Politico revealed CRL had a heavy role in helping the CFPB draft new regulations on payday loans. According to POLITICO, “The group regularly sent over policy papers, traded emails and met multiple times with top officials responsible for drafting the rule. At the same time, the group’s financial services business, Self Help Credit Union, was pushing CFPB to support its own small-dollar loan product with a much lower interest rate as an alternative to payday loans.”[6]

An investigation by the House Oversight Committee[9] found that the Federal Deposit and Insurance Commission took a prominent role in Operation Choke Point, an interagency initiative to pressure banks to stop providing business services to industries such as payment processors, firearms sellers, payday lenders, etc. As members of the FDIC’s Advisory Committee on Economic Inclusion, CRL board member Wade Henderson pushed agency leadership to crack down on the payday lending industry—one of the industries targeted by Operation Choke Point. Additionally, according to emails uncovered by the Oversight investigation, Mark Pearce (former CRL president and current director of FDIC’s Division of Depositor and Consumer Protection), was exploring ways for FDIC to “get at payday lending.” The report found Pearce used his position to push for stringent regulations on the payday lending industry.[10] CRL praised efforts by Operation Choke Point to increase regulations on payday lenders.[11]

It’s notable too that Martin Eakes was a Co-Founder of CRL in 1998. Mr. Martin Daniel Eakes is an American economic development strategist and credit union CEO. [Do you know credit unions do not have to pay taxes?]

Do you “get” it? Banks and credit unions DO NOT LIKE the payday loan industry! They are competitors. Banks and credit unions have access to cheap money thanks to the Federal Reserve and tax breaks. In other words, their cost of capital is far less than that of Lenders offering payday loans, title loans, installment loans, line-of-credit loans… to the very low FICO/no credit/thin-file consumers who are in MOST NEED of access to fast, no-hassle, small-dollar loans.

This explains why the 36% APR theme is becoming prevalent today! If a 36% APR is mandated nationwide, only Lenders large enough to collaborate with banks via “the bank model” – exportation of interest rates across state lines, and credit unions have a shot at the 40% of USA households unable to access $400 cash in a financial emergency and the 70% who cannot access $1000 cash! These institutions will own these folks. Provide capital to “the big boys” or continue to collect BILLIONS of Dollars in NSF fees!

Thankfully, there is another option. Federally recognized Native American Indian tribes such as Leaning Rock Finance have entered the fray via E-commerce. Tribes who previously were experiencing extreme poverty because our government placed them on reservations deemed worthless, have the ability today to participate in offering a multitude of loan products to consumers via the Internet. Much like the “bank model,” Indian Country has hired sophisticated, experienced, financial savants and 3rd party vendors to provide a bit of competition for the banks. For more than a few tribes, this development has turned their economies around significantly enabling the tribes to create jobs, build schools, health care facilities, alcohol/drug abuse programs and much, much more.

Your typical mom-and-pop payday, installment… small-dollar loan providers cannot acquire, underwrite, fund, and service these sub-prime borrowers under the thumb of a 36% APR cap! [Not unless these lenders figure out how to “stack” ancillary fees on top of 36% APR loans much like the 3 primary supporters of California AB539 have accomplished.]

Yes, I know! A 36% APR appears high at first glance. Let’s examine the numbers. $300 borrowed for 12 months at 36% = $108/year in fees; IF the borrower really makes their payments. [Many sub-prime customers require a little prodding.] Continuing the math, that $108/yr = $9/month interest. Now the “big boys,” the publicly traded companies like Enova, Curo, Elevate, OneMain, WRLD… filings indicate their 1st-time customer acquisition costs are approx. $280. That’s just to acquire a customer. They still must underwrite, decision, fund, service, collect… And as I’ve written before, this 36% APR theme originated in the early 1900’s. Know that a $300 loan in 1900 is equivalent to a $7,000 loan today! So… that’s their plan [banks]. MUCH higher loan principals – no way is a bank or credit union going to fund a $300 loan. And, minimum 12 to 60-month loan terms! Say goodbye to a quick $300 until your next payday!

Do you understand that the same customers who bounce checks [NSF’s] are payday loan customers?

According to Federal Deposit Insurance Corporation (FDIC) data and the New York Post, overdraft fees [NSF’s] have reached their highest level since 2009, which was at the end of the Great Recession. Consumers paid $34.3 billion in overdraft fees during 2017 compared to $33.3 billion in 2016,  The New York Post reported.

Despite the increase, consumers aren’t, in fact, overdrawing their accounts. Instead, Moebs Services says the uptick was caused by credit unions increasing their overdraft fees. Overall, average overdraft fees at banks have risen from $20 in 2000 to $30 in 2017. Over that same time frame, the average overdraft fee at credit unions has increased from $15 in 2000 to $29 in 2017.

In August of 2017, the CFPB released a study that exposed the extent to which large banks’ abusive overdraft fees drain working families’ checking accounts. The study found that nearly 80% of bank overdraft and NSF are borne by only 8% of account holders, who incur ten or more fees per year, with many of those customers paying far more. For one group of hard-hit consumers, the median number of overdraft fees was 37, nearly $1,300 annually. The study also confirmed that overdraft fees on debit cards can lead to extremely high cumulative fees for consumers.

Opted-in frequent overdrafters typically pay almost $450 more in fees: The typical opted-in frequent overdrafter has 22 overdrafts compared to 18 for frequent overdrafters who have not opted in. However, the opted-in frequent overdrafter typically incurs 18 overdraft fees over a year, compared to only five for the typical frequent overdrafter who has not opted in. With a typical overdraft fee of $34, this means that the median opted-in frequent overdrafter pays almost $450 more in overdraft fees than someone who has not.

Frequent overdrafters have low or no credit scores: Consumers who overdraft frequently have median credit scores of less than 600, well below what is considered to be a subprime score. Consumers with lower scores generally have difficulty obtaining new credit. Roughly 20 percent of frequent overdrafters do not have a credit score in the data that was studied. In many respects, frequent overdrafters without a credit score appear even worse off financially than other frequent overdrafters.

Anti-payday loan protagonists refer to APR’s consistently when comparing payday loans to bank and credit card products. The APR on a bounced check approaches 17,000%! Do you know that?

According to the CFPB Report, most overdraft fees are incurred by debit card transactions of $24 or less and are repaid within three days. Consider overdraft fees in a lending context: If you were to take out a $24 standard loan and pay an additional $34 to borrow the funds for three days, this loan would have a 17,000% APR.

I’m biased. I admit I’m a lender and a consultant in “the business of lending money to the masses.”

I’ve “worked the counter.” There certainly are some “bad” operators in our industry. The same goes for virtually all industries including banking, Wall Street, politics, and your local yogurt shop.

There are a LOT of nuances regarding this subject.

If you really care, get out there. Do something. Contribute. Check out Amscot Financial in Florida [No affiliation except I know the father and sons.] They are a great example of our industry giving back to their community.

Finally, for those of you who think outlawing these businesses is the answer? You cannot legislate demand away. Do you think banks are the answer? They fund our businesses. They provide credit lines to Lenders. They securitize the portfolios of our publicly traded companies and more. Banks get nearly free capital from the FED, leverage the hell out of it and make serious money on the “spread.” Banks hold up checks, as mentioned in this video from Thursday through Wednesday intentionally so they can game the “float.”

Watch this Professor Lisa Servon interview below! Get her book. I guarantee it’s worth your time whether you’re a lender, a borrower, an advocate, a regulator, a legislator, or simply someone with a desire to be informed!

Finally, if you’re interested in joining this party, CLICK HERE to grab a copy of our ‘bible,” the latest version of “How to Start or Improve a Consumer Loan Business.” Get it delivered to your Inbox immediately. Read it. Study it. Then call me: Jer 702-208-6736. Let’s explore…

TheBusinessOfLending.com

28
Jan

Ex-Billionaire Scott Tucker Payday Loan Lender Finally Tells His Own Story

Posted by / Scott Tucker, Tribe

By: Jer Ayles. Consiglieri to entrepreneurs interested in “The Business of Lending to the Masses.”

Scott Tucker has been portrayed by Netflix, American Greed, The WSJ, The NYT… and on and on as a pure, 100%  scum bag payday loan lender and loan shark for years. When I speak to investors, Wall Street, Family Offices, reporters, employees and peers, the name “Scott Tucker” is always part of the conversation.

Below, I give you your opportunity to hear directly from Scott. In his own words, you will gain insight into his side of his story. No matter your preconceived thoughts about Scott Tucker and his payday loan business escapades, the interview below will most likely change your mind in some respects and inform you as to the lengths our government will go should they choose to make an example of you! [NOTE: BOOKMARK THIS PAGE in order to listen to all 5 podcasts!]

Scott Tucker Payday Loans

Scott Tucker Payday Loans

No doubt about it, Scott employed some pretty outrageous business practices. Scott has a big ego and he pushes life and business to the limit!

And, as we all now know, so do the FED’s.

Scott did a 2.5-hour interview with a white-collar criminal consultancy group focused on helping defendants in criminal cases prepare for sentencing, prepare for prison, and prepare for the best possible outcomes. [Link below.]

I know the payday loan space very well. I know Scott Tucker.

I too opened my first location in 1998. There were “rules” and “best practices” and yet it’s true that there was a bit of a “wild west” mindset in the early days of payday loan lending. The industry grew from virtually zero to billions of dollars in funded loans overnight!

Borrow $100 and two weeks later, payback $115. No big deal. Currently, 14M to 20M+ USA customers use payday loans, installment loans, and car title loans to solve their financial challenges. [Imagine China, Brazil, India small-dollar loan volume!] It was simple for an entrepreneur to scrape together $10K – $50K, open a little payday loan store in a strip mall and start handing out money to people! You had no clue if they would honor their agreement with you and pay you back. Collections! Ugh!!

IT WAS NUTS!

Some of us made MILLIONS of DOLLARS doing this! Others went broke! And a few, like Scott Tucker, went to jail! Scott was a pioneer who pushes everything in life to the limit! His downfall? Ego? His pioneering implementation of the “tribe model” after the alleged consumer abuse claimed by the FED’s had occurred? The FED’s decided to make an example of him? Likely a combination…

[NOTE: That the “tribe model” has matured vastly since the so-called “Scott Tucker days!” The combination of $Capital + sovereign federally recognized Native American Indian Tribes + sophisticated technology and extremely positive outcomes in the Courts supporting the tribal lending model have resulted in tremendous advances in the stability of the “sovereign model.” I’ve participated in tribe portfolios and consulted for multiple entrepreneurs who have successfully and lawfully scaled minimal capital infusions in collaboration with Indian Country to achieve $50M+ loan portfolios in just a few years! Small-dollar loans averaging $300 – $800 with 400%+ APR’s.  Click here to learn more about the Tribe Model.]

Boy how things have changed! And yet today, it’s still easy to start a consumer loan business LAWFULLY!

How do I know this?

  • The laws and regulations are more clearly defined.
  • Demand by consumers for small-dollar loans increases daily. [Simply review the Quarterly Reports for CURO/SPEEDY, ENOVA, ONEMAIN
    Each of these companies reported over $1 Billion dollars in loans last year! We’re talking small-dollar loans… often averaging $300- $800+!]
  • Today, there is a multitude of financial products and services for the so-called underbanked/unbanked/subprime as a result of the fact that nearly half of all U.S. households cannot access $1000 cash in an emergency. Approximately 40% can’t access $400 cash in an emergency!
  • A suite of 3rd party vendors can be assembled by a Lender who chooses to enter this “business of lending to the masses.” Within weeks, an entrepreneur can secure a State/Province license if required, select a loan management software company to automate the business, connect with consumer identification underwriters, gain instant visibility on a borrower applicant’s bank account [IBV: Instant Bank Account Verification], employment and cell phone carrier history, employer and residence patterns, determine if the borrower applicant already has outstanding payday and/or car title loans… Lenders today know if their loan applicant just visited Starbucks!
  • Frankly, it’s astounding how much data is available to a Lender today! Loan decisioning in 90 seconds! Same-day funding! Online or in a storefront environment. AI is certain to vastly reduce a Lender’s dependence on call center services if not eliminate completely.

SCARY! In these United States of America today, millions of folks must have access to a few hundred dollars for everyday emergencies!!

The single-payment “payday loan product” is rapidly becoming a dinosaur. However, demand for quick, easy access to a few hundred dollars is going nowhere but UP! Demand continues to increase all over the world. Moneylenders and the ordinary folks who need them have been around since the beginning. Read “Debt: The First 5000 Years” and “The Ascent of Money” for perspective. Two excellent books and highly recommended on the history of money lending.

But as in every industry, there are outliers. Both consumers and business executives who test the limits of common sense and fairness. Fraudsters and thieves.

Example: There was a phone sex call center in my first payday loan location’s building; 100+ female employees. [This was way back in the days of the 1-900 premium pay-per-call business models. “Call 1-900-XXX-XXX to talk to a psychic hotline, adult chat lines…] 20% of these ladies hit up my payday loan store every week. I’d give them $255. Two weeks later, they owed me $300. 70% paid me back as promised. My Team spent our time chasing down the 30% who tried to blow us off. 🙂

Banks & credit unions in my area? They did not like me! They did not like my customers.

But they did like the $35 NSF fees my payday loan customers were avoiding by doing business with me.

I know, dear reader… you’re first thought! My conscious? How could I be a money lender? Profiting off the backs of these poor sex workers! Scum bag!!

  • One lady needed an abscessed tooth fixed. I loaned her the cash to get it taken care of. [Remember this is early 1998 when $255 was really $255!]
  • One lady needed a prescription filled. We helped her…
  • One lady’s car broke down. She couldn’t get to work. We loaned her the cash…
  • I recall a phone sex worker who borrowed $255. Then, every two weeks we tracked her down for our $255. She never had it. She chose to pay us our $45 fee instead and “rollover” her payday loan. This went on for 10 pay periods [so… we collected $450 over 20 weeks]. Don’t think this was easy. She dodged us EVERY payday and would NOT respond to calls, letters… Eventually, I reviewed her transactions. We loaned her $255. She had paid us $450. As she sat at my desk, I told her she had paid enough and I literally tore up her contract. “We are done.” I learned later, from a buddy of mine who owned a payday loan store about 5 miles from me, that she was, and continues to get payday loans from his store.
  • On the other hand, I had a client who borrowed $3000 2 to 3 times/year using his truck as collateral; a “car title loan.” There were times when he had to make payroll or buy supplies for a construction job he had just “landed.” He’d pay us back $3240 for a 30 day $3000 loan. [We charged him 8%/month.] No worries!

Today, I have equity in stores and online platforms in multiple states and via Native American Indian tribes. I’m an investor in several internet lending platforms and Silicon Valley startups. I offer consulting services for entrepreneurs, venture capitalists, family offices, investors, and existing operators in need of help.

MOST IMPORTANTLY, I’m a conduit for all parties interested in “the business of lending to the masses.” My Team operates several websites & Blogs dedicated to “the business of lending money to the masses” profitably.

Additionally, I give and support several charities!

Jer – TheBusinessOfLending.com

Reach out! Cell = 702-208-6736 Email: TrihouseConsulting@gmail.com

Ready and able to explore the business of lending to the masses! Fintech, workplace advances, car title loans, installment lending, payday loans… CLICK HERE TO LEARN MORE

CLICK IMAGE TO LEARN MORE

And no, unlike Scott Tucker, I am not a billionaire. And apparently, Scott no longer is either.

From the Podcast: “Scott Tucker built a billion-dollar business. He started with a single storefront. In this episode, the third episode in a multi-part series, we learn how.

Despite his not being a good student, Scott Tucker always had ambition. Like many young entrepreneurs, he started with lawn mowing businesses that he launched as a child. While in college, Scott found an opportunity to get involved in real estate. Scouring the classified ads, he secured an opportunity that netted him more than $100,000 for six months’ work. Then he invested those resources to build other businesses.

After a brief period in the car business, Scott discovered a new market. People were asking if they could provide him with a post-dated check for a deposit. They needed a bit of liquidity until they received a paycheck.

Scott decided to start a company. People could write a post-dated check for $120. It would not be good until the person’s payday. Scott would give the person $100 in exchange for that post-dated check. That was how the payday loan business began.

Scott said that 1 out of 3 people who borrowed money for the first time chose not to repay the money. The business model had to build profits that would cover those anticipated losses. The strategy he deployed resulted in massive growth for the industry. It also resulted in massive amounts of revenues for his company and employment for thousands of people.

Unfortunately, the government did not like the industry. Scott went through numerous trials. As described in the first episodes of this series, a jury convicted Scott of violating various federal laws. It’s a white-collar crime, but he faces decades in prison.”

Interview #1

Interview #2

Interview #3

Interview #4

Interview #5

10
Jan

How to Start a Title Loan Business

Posted by / Opportunities

Why Car Title Loan Lending Can Be Better Than Non-Collateralized Personal Loans.

Installment loans, Car Title Loans, Payday Loans, Personal Loans and the Risk Evaluation for Balance Sheet Lenders.

“You know, people say they’re going to pay their house payment first. And then a funny thing happened in 2008, 2009 [during the mortgage meltdown] … Many people let their house go, but they needed that car, and they couldn’t go to work without the car. They left their house…and kept their car payments current.” #tribelending #consultingservices #paydayloans #ab539

How to Loan Money to the Masses

Consulting: How to start a payday loan business, an installment loan business, a car title loan business...

Course: How to Loan Money to the Masses

How to Loan Money to the Masses Profitably
How to Loan Money to the Masses Profitably

6 In 10 People Don't Have $500 cash!

That's 156,000,000 Adults!

CURO, a publicly traded lender, originates $1 Billion dollars [+/-] in consumer loans every 3 months. They have approximately a 3% market share. What's this mean for you? OPPORTUNITY!

The near-prime will soon be the subprime. Demand for loans of $500 to $5000+ continues to escalate. Opportunities are boundless for lenders.

As a lender, your inventory is MONEY! Not tulips dying. Not bananas rotting. The 99% will ALWAYS need money. Debt is the reality of living in America.

What do we do? We teach entrepreneurs how to lend money to the Masses. We lend money. We offer Courses, consulting, investments, access to our vast network of vendors, lawyers, Instant Bank Verification, payment processors, website designers, and underwriting...

We are 100% focused on the business of lending to the masses! Installment loans, car title loans, payday loans, line of credit loans...

RECENT POSTS

Categories

→ Limited time inflation relief pricing: Save $147.00

Save $147

Limited Time Inflation Relief Pricing $147 Off ends in

:
:
: