CFPB: Good News for Payday Loan Borrowers and PDL Companies: PDL Complaints Decline 12%

March 11th, 2016

By: Jer Trihouse
Jer - Trihouse

David Lazarus, the author of a hit piece in The Los Angeles Times, calls the collaboration of both Republican and Democratic lawmakers on a payday loan bill “a bizarre display of bipartisan cooperation to cripple the Consumer Financial Protection Bureau.” This statement is folly!

“The bill would delay federal regulations for payday lenders by two years. It also would allow states to adopt more lenient rules for the industry.” The States should have the ultimate say in regards to credit access for their residents! What do the bureaucrats in D.C. know about this topic? Zip!!

“Wasserman Schultz is joined by eight other Democrats in co-sponsoring the legislation alongside twice as many Republicans.” Finally, both sides of the aisle are working together on SOMETHING!

Wasserman Schultz’s spokesman, Sean Bartlett, said the legislation “is about preserving the shared goal of implementing strong consumer protections while also preserving access to affordable lending for low-income communities.”

Obviously, these Democrats and Republicans who are working together on this payday loan legislation are more in touch with their constituents then Richard Cordray, the head of the CFPB in Washington!

The CFPB’s own “Winter 2016 Complaint Report” reveals payday loan complaints declined 12%. Of the total 20,887 complaints received by the CFPB, 409 were in regards to payday loans. That’s .019%. [Here’s a link to their actual Report.]

“Under preliminary requirements unveiled last year, lenders would have to determine upfront if a borrower can repay the loan.”  This statement is ridiculous! Payday loan lenders don’t go to the FED and get 1% money – like BANKS do. We’re lending OUR OWN MONEY. If our borrower cannot pay us back, we’re OUT OF BUSINESS! STUPID!

Stupid things payday lenders doOur loans are not collateralized. All we have is the consumer’s promise to pay us back. In Wasserman Schultz’s state of Florida, which Lazarus attacks, a resident of Florida borrows $100 and pays back $110.00 two weeks later. That’s it! No subterfuge. Unlike bank NSF fees, this $10/%100 fee structure is plainly visible on the walls and in every consumer contract in English and Spanish in 18 point fonts!

The author is in Los Angeles, Calif. Has he ever bothered to actually visit a payday loan store? Doubtful. The State of California passed its own payday loan laws in 1997. We charge $17.65 per $100 borrowed. So… customer borrows $100 today, they pay us back $117.65 in two weeks. Sign on the dotted line, prove to me you can pay me back my money, show me you have a checking account and you’re approved. In and out in 10 minutes. SIMPLE! And that’s exactly what my customers want.

I congratulate these bipartisian ELECTED representatives for at least taking another look at the draconian measures the CFPB beaurocrats are attempting to do in restricting a wide spectrum of financial products to U.S. consumers!

Finally, I suspect all of these measures will soon be moot. Silicon Valley, Austin, London… launch new FinTech companies weekly. Orchard, Avant, Lendup, Prosper, JP Morgan, and on and on are rapidly changing the consumer and small business loan offerings available. The bureaucrats simply cannot keep up!

Need help? Jer – Trihouse Consulting: PDL, Installment & , Title Loans 702-208-6736. Teacher… Lender… Resource… Answers…
Jer – Trihouse/LinkedIn
Jer@TrihouseConsulting.com

 

Consumer Confidential: Why is a group of lawmakers working to undermine tighter rules for the payday-loan industry?

In a bizarre display of bipartisan cooperation, a handful of Democratic lawmakers have joined Republicans in trying to cripple the Consumer Financial Protection Bureau. The question is: Why? Most notably, Florida Rep. Debbie Wasserman Schultz, who also serves as chairwoman of the Democratic National Committee, is co-sponsoring the deceptively titled Consumer Protection and Choice Act, which…

The post CFPB: Good News for Payday Loan Borrowers and PDL Companies: PDL Complaints Decline 12% appeared first on Payday & Title Lending.

PAIN and Small Dollar Lending

March 3rd, 2016

Pain!

I get calls every day from lenders in PAIN!

What kind of PAIN you ask?

• Fear about what the CFPB/regulators will do to us
• What our friends, family and neighbors think of us
• What new city ordinance is going to be passed against us
• Who might sue us next
• How do we collect our money

The #1 PAIN? How to take care of our existing customers and how to get more of them!

At a minimum, there are 45 MILLION+ customers out there who want to do business with us.

The LIFE TIME VALUE (LTV) of just one customer is $4,236 – $15,000+ in fees generated!

So… if you miss just ONE customer you’re talking about SERIOUS PAIN!

(Relax! I’m getting to PAIN relief)

Look, I have no clue as to what the CFPB will do – if ANYTHING. The Chairwoman of the Democratic National Committee just introduced HR4018. This changes the game in our favor BIG TIME! And CSFA, FISCA, OLA, NASFA, our lobbyists, our State associations are all working hard…

If you’re still concerned about what your friends, family and neighbors think, open a pizza store. I’m certain that too will meet with some disapproval.

City Ordinances? As I’ve been saying for years, “Embrace the Internet or Die!” Cities can’t enforce their crazy laws anyway. The State will prevail. But, be prepared…

Most importantly, let’s not forget our customers. Our CUSTOMERS support us big time! Over and over again – at hearings, meetings and CFPB rallies, they’ve expressed their desire for continued access to our products and services!

PAIN RELIEF!

ENABLE YOUR CUSTOMER TO DO BUSINESS WITH YOU!

Online & Storefront Lenders.
Don’t lose a customer because you’re CLOSED. Be available 24/7 to make loans/$$
Are you losing business to your competition because of your hours of operation?
You want to service more customers? You want to make more loans? The magic words are “SPEED” and “AVAILABILITY.”

SPEED:
Speed of customer contact is huge! If you wait five minutes to call a lead after you purchase it, chances are the customer has been contacted by someone else already.

If your customer has to wait in line while your CSR’s answer your phone, they will bolt!

How many times have you experienced this yourself? You’re in a place of business. You wait in line for your turn. The phone rings. Suddenly, the caller on the phone has literally jumped into line ahead of you. The caller is not placed on hold. YOU are! Patience is not a virtue!

AVAILABILITY:
During the past week, Team Trihouse called 132 loan companies after hours. 93% of the time, all we got was a poorly worded recorded voice!

“Hello, sorry we missed you. Our hours are Monday through Friday 10 A.M. to 6 P.M. and Saturdays 10 A.M to 2 P.M. Please leave a message and we’ll return your call. BEEP…”

As “The Donald” would say, “STUPID!” 82% of the companies we left a message with NEVER returned our call.

Lenders are spending $$ on store branches, signage, leads, TV, radio, car wraps, direct mail, bus benches, on and on while FAILING miserably at serving their customers.

OK, ENOUGH! How do we fix this?

Hire and train more CSR’s and staff them 24/7.

WHOOPS! That’s expensive, time consuming and hard to scale.

A simpler way? Try Centrinex

OK, here comes the PITCH.

But seriously, I know Centrinex works! You can stop being “STUPID.” You can be “open” 24/7 and beat the pants off your competition.

Remember your customer’s Life Time Value? $4,236 – $15,000+

Centrinex:

• Centrinex has provided outsourced call center services to the short term lending industry for over 10 years, with 5 facilities (Domestic and Near-shore), and 25+ lenders currently enjoying the advantages of having partnered with Centrinex.

• Flexible solutions from standard operating hours to after-hours coverage, shared resources and even per-minute billing are available. You can expand your hours of operation without expanding your real estate and salary expense. Ramp-up as your needs dictate.

• Centrinex will call your loan applicant immediately. The moment your loan form is submitted by your loan customer a Centrinex CSR will call them while they’re still at their computer!

• When your phone rings, a Centrinex CSR will answer in seconds.

• After hours coverage allows you to purchase lower cost leads when your competition has closed for the day.

• Loan applicant fraud is HUGE. Partner with Centrinex – a Team who already “knows the ropes” and can assist in refining your underwriting to maximize loan performance.

• Online application abandonment. Centrinex can provide “Overflow Coverage” for peak periods your in-house staff cannot support.

• 24/7 Centrinex call center support for lead sellers. Maximize your lead inventory and monetize your denied leads.

• Centrinex works with all loan management software programs.

• Multi-lingual CSR’s available

• Collections: Centrinex averaged 35%+ success on 30 day debt in 2015

• Champion-Challenger: Is your current call center performing as well as you think? Run a campaign against your internal Team to find out.

• Disaster Recovery: Maintain a small, low cost staff solution with Centrinex in event of unexpected down-time/failure.

CONTACT TEAM CENTRINEX:
Frank Cotton 678-851-8116 (Cell)
FCotton@Centrinex.com

Are you attending CFSA in The Bahamas March 7th – 10th? Look for Frank. Give him a call.

Centrinex

Frank Cotton: Centrinex

Here’s Frank’s ugly mug:

Frank Cotton
VP Sales and Marketing
fcotton@centrinex.com
678-851-8116 – cell
Skype: fcotton368
LinkedIn: fcotton368

The post PAIN and Small Dollar Lending appeared first on Payday & Title Lending.

CFPB Gets a Right Hook from Democratic National Committee & H. R. 4018

March 1st, 2016

Good News for Payday Loan Consumers!

The CFPB takes a “hit” from the chairwoman of the Democratic National Committee!

Surprise! CFPB Gets a Right Hook from Rep. Debbie Wasserman Schultz (D-Fla.) & H. R. 4018

Trihouse Consulting

Jer: Trihouse Consulting

By: Jer Trihouse. The chairwoman of the Democratic National Committee is pushing a bill H. R. 4018 that would delay new payday lending regulations.

Finally, someone in D.C displays some sense regarding the needs of millions of consumers needing access to emergency loans!

Rep. Debbie Wasserman Schultz (D-Fla.) is co-sponsoring the “Consumer Protection and Choice Act.” H. R. 4018 places a two year delay on pending rules from the CFPB – Consumer Financial Protection Bureau.

[Man, is this going to piss… I mean ANNOY, CFPB Director Cordray!]

The legislation exempts states with exisiting payday lending abuse laws from the rules. Wasserman Schultz’s home state of Florida has one such law on the books, and 12 of the bill’s 24 co-sponsors are also from the Sunshine State.

“As a state lawmaker, she helped write Florida’s law that has sharply reduced the need to go to bad actors, curbed predatory practices and created standards and protections for low-income borrowers,” Wasserman Schultz spokesman Sean Bartlett said.

Here’s a portion of H.R. 4018: (Link to H.R. 4018 at bottom)

To amend the Truth in Lending Act to establish deferred presentment transaction requirements, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Consumer Protection 5 and Choice Act’’.

REGULATION OF DEFERRED PRESENTMENT TRANSACTIONS AND DEFERRED PRESENTMENT PROVIDERS.

If the Director of the Bureau determines that a State has in effect a covered deferred presentment law, any regulations of the Bureau with respect to deferred presentment transactions and deferred presentment providers shall not apply in such State.

COVERED DEFERRED PRESENTMENT LAW DEFINED.
For purposes of this section, the term ‘covered deferred presentment law’ means a law or regulation of a State that provides for the licensing of deferred presentment providers and the regulation of deferred presentment transactions, which may be accomplished through existing State authority, and that meets the following requirements…

Here’s the LINK to the Bill.BILLS-114hr4018ih

The post CFPB Gets a Right Hook from Democratic National Committee & H. R. 4018 appeared first on Payday & Title Lending.

Essay Reveals Payday Loans Not the Central Cause of Borrower Financial Calamity

February 22nd, 2016

Payday Loan Defaults

Do Defaults on Payday Loans Matter? Ronald Mann Columbia Law School

By: Jer Trihouse. The CFPB continues to attack the payday loan industry based on biased data collection and, quite frankly, the CFPB bureaucrats distaste for a financial product millions of consumers “vote” for by using. Thus, this essay by Ronald Mann at Columbia Law School will not be easily digested!

Jer Trihouse Consulting

Jer Trihouse

Mr. Mann’s findings reveal that consumer use of payday loan products is “at most a single step in a protracted experience, and by no means a particularly important one.”

In other words, payday loan usage is not the cause of catastrophe for consumers but rather their last gasp at the end of a 2 year path of never ending financial duress. After all, payday loan borrowers at this stage of “the game” are sophisticated enough to know that there is really very little a lender can do to them.

  • We don’t report them to the major credit bureaus
  • The borrower’s credit is already severely damaged
  • We can call them; but they don’t have to answer
  • We can email them
  • We can text them
  • In some cases we can draft their checking account via an ACH
  • Formal litigation is not cost effective
  • The most serious result of not paying us is their inability to return to us for another emergency loan
  • MANY borrowers in today’s world of online lenders plan to default immediately! It’s a “strategic” decision much like those made by underwater home owners in the last Great Recession
  • It’s a lot easier to blow off  a “big bad ass Internet payday lender”  than it is to tell their local payday loan store front owner Danny on the corner to pound sand.

From R. Mann’s essay:

“What is more interesting about the findings is how they situate the payday loan default in the timeline of the borrower’s financial distress. The premise of a regulatory regime [he’s referring to the CFPB]  that targets the payday loan as the central cause of financial calamity is that borrowers are slipping along in circumstances that are tight but manageable, but that the default on the payday loan tips them over the edge into unmanageable impecunity. The data analyzed here, albeit sketchy, undermine that vision in several ways. The first is that the payday loan is plainly not the beginning of serious financial problems.”

Here’s a link to R. Mann’s full ESSAY [via Bitly URL Shortener)

Here’s a link to R. Mann’s full ESSAY[via Google URL Shortener)

Was this forwarded to you? Want my thoughts and ramblings on the small dollar credit industry delivered to your inbox?

The post Essay Reveals Payday Loans Not the Central Cause of Borrower Financial Calamity appeared first on Payday & Title Lending.

Native American Sovereignty & Payday Loans

February 12th, 2016

Payday Loan Lending via Native American Tribes

The Native American Financial Services Association (NAFSA) formed in 2012 to advocate for Native American sovereign rights and enable tribes to offer responsible online lending products appeared today before the House Financial Services Committee to defend the rights of tribes to employ e-commerce to offer consumers payday loan products.

Their efforts are directed toward the CFPB proposed lending rules about to be published. These rules appear to be a heinous attack against consumers in need of financial services choices and payday loan lenders.

“Sherry Treppa, Chairperson of the Habematolel Pomo of Upper Lake offered impassioned testimony on the struggles her tribe has overcome through the centuries from staving off existential threats to ensuring economic self-sufficiency. Chairperson Treppa said the tribe’s decision to enter into ecommerce short-term lending empowered her Nation to finally rebuild and transform its economy, education programs and the social services it provides to its most vulnerable members.”

“In contrast to our experience working with other federal agencies as well as state and local governments, the CFPB has refused to engage in a meaningful dialogue about our shared interests and so far has shown little interest to work together, where necessary, as co-regulators,” said Chairperson Treppa. I remain concerned that the CFPB is developing its proposed action in a vacuum without consulting with tribes to learn about the innumerable tools that we have developed to ensure that we conduct business in a manner that is fair, responsible, compliant and benefits our tribal members and the American consumer.”

Native American Tribes to Congress: Respect Our Sovereignty

WASHINGTON, Feb. 11, 2016 /PRNewswire-USNewswire/ — Appearing today before a House Financial Services Committee hearing examining the treatment of Native Americans by the Consumer Financial Protection Bureau (CFPB), a key Native American leader urged Congress to once again stand shoulder-to-shoulder with Indian Country to help ensure the CFPB respects the historic government-to-government relationships of federal entities…

The post Native American Sovereignty & Payday Loans appeared first on Payday & Title Lending.

Tribe Payday Loans & Arbitration Agreements

February 8th, 2016

It’s been legally established that federally recognized Native American Indian Tribes funding payday loans are entitled to their own laws and legal systems and generally don’t necessarily have to follow state or even federal laws. [There are exceptions such as TILA…]

The payday loan lender Cheyenne River Sioux stipulate in their loan contract:

“According to the contract, any dispute connected to loan collection would have to be submitted to an arbitration conducted by the tribe or an authorized representative in accordance with the tribe’s consumer dispute rules.”  Another provision said that, “At the borrower’s choice, the American Arbitration Association or Judicial Arbitration and Mediation Services could administer the arbitration.”

However, some courts have determined that the Cheyenne River Sioux did not create, nor employ, a consumer arbitration process nor have anyone assigned to perform these arbitrations.

BIG MISTAKE!

Fourth District Judge Harvie Wilkinson reversed a previous court’s decision regarding Western Sky and Martin Webb. Payday loan lenders DO NOT WANT TO BE SUED in a class action. Typically, payday loan lenders insist payday loan borrowers to sign a contract that basically states they can’t bring one. Over the years, the Supreme Court has upheld such clauses. Legal opinions recognize that this agreement can result in “effectively vindicating” federal rights. So long as some remedy exists for a borrower, the courts have upheld this view.

Per Wilkinson’s, it would appear that any contract that rejects the application of federal law can’t be enforced. I take this to mean this decision maylikely reduce federally recognized Native Amenrican Indian tribes’ sovereignty rights.

We shall see. Here’s a link to the Court’s decision: Martin Webb-Delbert Services-Western Sky

The post Tribe Payday Loans & Arbitration Agreements appeared first on Payday & Title Lending.

Bank Accounts: Lenders, Check Cashers

February 3rd, 2016

Bank Accounts for Payday Loan, Installment Loans, Small Dollar Loans, Consumers…

The CFPB issued a “policy directive” suggesting banks and credit unions do more for consumers lacking bank accounts. This is a laudatory action. Those of us offering payday loans, installment loans, car title loans, line-of-credit, check cashing… know well how difficult this negative situation makes a consumer’s life.

BUT WHAT ABOUT SMALL BUSINESSES! How about bank accounts for lenders, check cashers, gun shops…? Who the hell creates ALL the jobs for these consumers in need of a bank account?

By now, we’re all aware of the devastation the small dollar loan industry has experienced as a result of “Operation Choke Point.” [Here’s a list of ALL the industries attacked by Operation Choke Point.] And everyone knows it wasn’t us who nearly brought down the financial system and then asked for bailouts from taxpayers.

So what’s up with Richard Cordray, head of the CFPB. Why not help consumers by helping all the small businesses who experienced “bank discontinuance?”

Senseless!

Here’s the CFPB’s opening salvo letter to banks and credit unions with a link to the entire letter from Richard Cordray:

February 3, 2016
[Address of financial institution]
Dear [CEO of financial institution]:

I am writing to you and your peers, as leading executives in the banking industry, to bring an important matter to your attention. This letter is not being sent in reference to any sort of regulatory requirement, but instead is simply a suggestion that I urge you to consider in serving your customers.

As you know, each year millions of Americans open new checking accounts, making them one of our most widespread financial products. Right now, much of the industry presents consumers with a binary result – either an applicant passes a standard screening process to obtain an account after identifying any credit risks posed by the applicant’s history of misuse or mishandling of some prior account, or the applicant is blocked from accessing the banking system altogether.

payday loan car title loan banks and consultingThere is, however, a third possibility, which is to offer all applicants a lower-risk account (whether a checking account or a prepaid account) whereby the applicant cannot pose the same level of risk to the institution. Accordingly, the same applicant need not be screened out of the banking system by applying the same risk thresholds that are used to determine eligibility for a standard checking account. Millennials, in particular, seem to be expressing great interest in the availability of such lower-risk products.

This is important because an estimated ten million American households are currently “unbanked.” You know very well that having a checking account or a reloadable prepaid account enables… Here’s the link.

Need help starting or improving your lending business? Reach out to Trihouse Consulting. We’re lenders, operators, consultants and more. Selling your business? Buying a small dollar loan business? Want to learn more? Jer@TrihouseConsulting.com 702-208-6736

The post Bank Accounts: Lenders, Check Cashers appeared first on Payday & Title Lending.

FinTech, Elevate and Loan Depot IPO’s, Gas prices, Pawn Destruction?

January 28th, 2016

By: Jer Trihouse. Alternative Financial Lenders (AFS) which includes payday loans, installment loans, pawn, title loans… and the new variation of FinTech lenders such as Lendup, Prosper, Lending Club, Avant, Enova, Elastic, OnDeck… are getting “creamed” of late! In light of the devestation of stock prices and their immediate expectations, and the fact that gasoline prices are well under $2/gal in many of our demographic markets,  it’s no surprise Elevate Credit (NYSE:ELVT) and LoanDepot decided to pull their IPO, nor for CSH to drop their unsecured payday loan products like a hot potato – other than in Ohio. QC has applied for delisting by the NASDAQ. (Low gasoline prices is killing the pawn industry as well.)

Jer Trihouse Consulting

Jer Trihouse

The CFPB represents a HUGE hammer that is about to smash these online business models  to bits. City ordinaces are not helping brick-n-mortars either. None of us know how bad this will be. Of course, the FED take’s delight in this. I only wish I had been at the after party when they announced a $1.2 BILLION DOLLAR fine against Scott Tucker!

Folks, in today’s economic environment and in combination with the unknown devestation the CFPB COULD level on all of us, your focus must be on cutting costs while developing new products with lower margins. It’s back to funamentals; onboarding new customers at a CAC that makes sense for your financial metrics and nurturing that customer over their lifetime.

Collaboration is another area offering unique opportunities. Witness Uber and their drivers access to loans.

Finally, my sources tell me the tribes and the mono-line pawn shop owners are salivating over the potential refercussions of the CFPB. Time will tell. But, it’s a certainty that fewer consumer loan options will drive consumers into the hands of tribe lenders and pawn shops.

Here’s an interesting article by Carter Dougherty 

Elevate Credit – Innovative Financial Services Or Online Loan Sharks? Jury’s Out

Elevate Credit – Innovative Financial Services Or Online Loan Sharks? Jury’s Out Depending on how you feel about borrowing and lending, Texas-based Elevate Credit could be the first hot new tech stock of 2016 — or an ignoble, consumer-exploiting failure. The company, backed by Silicon Valley venture capital heavyweights, set out to reinvent small-dollar lending over…

The post FinTech, Elevate and Loan Depot IPO’s, Gas prices, Pawn Destruction? appeared first on Payday & Title Lending.

QC Holdings, Inc. Announces Voluntary NASDAQ Delisting and SEC Deregistration

January 22nd, 2016

I’ve been watching QC Holdings shares CRASH for months! Finally, here it is:

QC Holdings, Inc. Announces Voluntary NASDAQ Delisting and SEC Deregistration

Title: QC Holdings, Inc. Announces Voluntary NASDAQ Delisting and SEC Deregistration

OVERLAND PARK, Kan., Jan. 22, 2016 (GLOBE NEWSWIRE) — QC Holdings, Inc. (NASDAQ:QCCO) announced today that it has notified the NASDAQ Stock Market (“NASDAQ”) of its intention to voluntarily delist its common stock from the NASDAQ Capital Market. The Company intends to cease trading on NASDAQ at the close of business on February 11, 2016. The Company’s obligation to file current and periodic reports with the Securities and Exchange Commission (“SEC”) will be terminated the same day upon the filing of the requisite notification with the SEC. The Company is eligible to deregister its common stock because it has fewer than 300 stockholders of record.

Following delisting and deregistering, the Company presently intends to provide annual information regarding its performance upon stockholder request. The Company’s shares may be quoted in the “Pink Sheets” (www.pinksheets.com), an electronic quotation service for over-the-counter securities. However, there can be no assurance that any market maker or broker will continue to make a market in the Company’s shares.

The Company’s board of directors determined, after careful consideration, that voluntarily delisting and deregistering is in the overall best interests of the Company and its stockholders. Factors that the board of directors considered include the cost savings that will occur as a result of the elimination of the Company’s obligation to file reports with the SEC, the avoidance of additional accounting, audit, legal and other costs and management’s attention devoted to compliance with the requirements of the Sarbanes-Oxley Act of 2002, the historically low daily trading volume in the Company’s shares, and the benefit of allowing management to focus on the long-term development of our core business.

About QC Holdings, Inc.
Headquartered in Overland Park, Kansas, QC Holdings, Inc. is a leading provider of consumer loans in the United States and Canada. In the United States, QC offers various products, including single-pay, installment and title loans, check cashing, debit cards and money transfer services, through 394 branches in 22 states at December 31, 2015. In Canada, the company, through its subsidiary Direct Credit Holdings Inc., is engaged in short-term, consumer Internet lending in various provinces. During fiscal 2014, the company advanced nearly $750 million to customers and reported total revenues of $153 million.

Website: QC Holdings

The post QC Holdings, Inc. Announces Voluntary NASDAQ Delisting and SEC Deregistration appeared first on Payday & Title Lending.

Title Loan Lies: GPS Devices & Forced Repair Warranties

January 21st, 2016

Title Lenders Doing Stupid Stuff: Again

CFPB TAKES ACTION AGAINST HERBIES AUTO FOR UNLAWFUL LENDING PRACTICES
Subprime “Buy Here Pay Here” Dealer Hid Finance Charges, Deceived Consumers

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) took action against Herbies Auto Sales, a buy-here pay-here used car dealer, for abusive financing schemes, hiding auto finance charges and misleading consumers. Herbies will pay $700,000 in restitution to harmed consumers, with a suspended civil penalty of $100,000.

Stupid things payday lenders do“Buying a car is often one of the most important purchases a consumer makes, so the experience needs to be fair and above-board,” said CFPB Director Richard Cordray. “But concealing finance charges and the real cost of credit, as Herbies did here, is unlawful and unacceptable.”

Y King S Corp., which does business as Herbies Auto Sales, is located in Greeley, Colo. Herbies operates as a subprime, buy-here, pay-here dealer, which is a dealer that both sells the car and originates the auto loan without selling that loan to a third party. From at least 2012 through May 2014, the company offered financing to about one thousand people each year.

Herbies unlawfully advertised a misleadingly low 9.99 percent annual percentage rate (APR), without disclosing a required warranty, a payment reminder device and other credit costs as finance charges. This ruse helped Herbies convince consumers that they would get the 9.99 percent APR instead of the much higher rate actually charged. Also, Herbies engaged in abusive practices.

Herbies violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. Specifically, the company:

  • Hid finance charges and advertised a far lower APR than consumers received: Herbies lied to consumers about finance charges and APRs in marketing materials, including on showroom window displays, and in Truth-in-Lending Act disclosures. Hidden finance charges included $1,650 for a required repair warranty and $100 for a required GPS payment reminder device.
  • Hid finance charges that stemmed from a refusal to negotiate car prices: Herbies refused to negotiate prices with credit customers, but did negotiate with cash customers. The resulting finance charge should have been included in the disclosed cost of credit.
  • Used abusive practices: Herbies’ financing scheme lured consumers with misleading advertising and then kept them in the dark about the true cost of financing the cars they were buying. This took advantage of consumers’ inability to protect their interests in selecting or using Herbies’ financing, among other things.

Enforcement Action
Under the Consumer Financial Protection Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the consent order, Herbies is required to:

  • Provide $700,000 in redress to harmed consumers: Herbies must provide $700,000 in restitution for consumers who financed cars with Herbies after January 1, 2012, except those whose accounts were charged off due to default. Herbies must submit a timeline to the Bureau for making restitution to consumers. Herbies is also subject to a civil penalty of $100,000, which is suspended as long as redress is paid.
  • Stop deceiving consumers during financing process: Herbies must not misrepresent interest rates, finance charges, or amounts financed, or any other fact material to consumers concerning the financing of any motor vehicle.
  • Post automobile prices: Herbies must clearly and prominently post the purchase price on all automobiles for sale when offering auto financing.
  • Provide certain financing information in advance: Herbies must give consumers certain information about the financing offer, including the actual APR, price of the car, and all finance charges, and get a signed acknowledgment from consumers that they received the required information before or at the time financing is offered.

The full text of the CFPB’s Consent Order is available at: http://files.consumerfinance.gov/f/201601_cfpb_consent-order_y-kings-corp-also-doing-business-as-herbies-auto-sales.pdf

The post Title Loan Lies: GPS Devices & Forced Repair Warranties appeared first on Payday & Title Lending.

Example Payday Loan Partial Payment Agreement

January 5th, 2016

Example Payday Loan Partial Payment Agreement

Do you need an example of a payday loan partial payment agreement; sometimes called a “Delayed Deposit Partial Payment Agreement?” [For this form and all the others you’ll need to successfully make money by lending money in the payday loan, installment and car title loan industry, get our “Bible.”]

Let’s face it. Payday loan lenders, car title loan lenders, installment loan lenders, crowd funding and peer-2-peer lenders  must often take a softer approach. Nothing wrong with this. But, get everything in writing AND spend the time necessary to explain the details to your borrower. Do not gloss over this! Invest the time with your borrower to make it clear what your borrower needs to do and what will occur if they fail to meet their obligation.

DELAYED DEPOSIT SERVICES PARTIAL PAYMENT AGREEMENT (CASH)

 

Licensee Name: __________________________      Customer Name _________________________

Address: ________________________________       Address:_______________________________

________________________________________       _______________________________________

Telephone: ______________________________       Telephone: _____________________________

 

Customer acknowledges:

  • I entered into a delayed deposit transaction with Licensee on __________________.
  • The check which I wrote in that transaction has been returned unpaid.
  • The returned check number is _________.
  • The amount of the returned check is $__________.
  • Licensee has added a penalty fee of $___________.
  • The total amount I owe to Licensee is $_________.
  • I wish to make partial payments in order to pay off the full amount I owe to Licensee.

 

Customer and Licensee agree as follows:

  • Customer will make payments to Licensee in satisfaction of the above debt in the minimum amount of $______.
  • Such payments will be made

___Weekly; ___Bi-weekly; ___Monthly; ___Other (Specify:_________________).

  • The payment is due on the _____ day of each ___________; ___Other (Specify:_____________).
  • The payments will be made in cash or by money order. Checks cannot be accepted.
  • Customer is entitled to a receipt for each payment.
  • Customer may pre-pay all or part of the above debt at any time.
  • If Customer makes payments according to this schedule, Licensee will not attempt other collection methods available to Licensee and will not re-present the check.
  • If Customer fails to make the first payment under this Agreement, Licensee is entitled to re-present the original check for payment. At its option, Licensee may re-present the check electronically within 7 business days of the missed payment date, and may separately electronically debit Customer’s account for the penalty fee.  Licensee may re-present the check more than once.  Customer will receive no additional notification of re-presentment(s) of the check.  Customer may incur costs from the financial institution each time the check is returned unpaid.
  • If Customer defaults, in whole or in part, under the Agreement, Licensee may utilize any collection methods available to it under the law. Customer may incur additional costs as a result.
  • Licensee will keep a record showing every payment received from Customer. Customer is entitled to a copy of such record during Licensee’s regular business hours, and a copy of this contract.
  • Upon successful completion of this contract, the original check will be returned to Customer.

 

____________________________________               __________________________________

Customer Signature                                                    Licensee Representative Signature

 

Date: _______________________________              Date:_____________________________

 

                                                                                                  

                                                                                                          DDS Partial Payments Form/Cash

DELAYED DEPOSIT SERVICES PARTIAL PAYMENT AGREEMENT (ACH)

 

Licensee Name: __________________________      Customer Name _________________________

Address: ________________________________       Address:_______________________________

________________________________________       _______________________________________

Telephone: ______________________________       Telephone: _____________________________

 

Customer acknowledges:

  • I entered into a delayed deposit transaction with Licensee on __________________.
  • The check which I wrote in that transaction has been returned unpaid.
  • The returned check number is _________.
  • The amount of the returned check is $__________.
  • Licensee has added a penalty fee of $___________.
  • The total amount I owe to Licensee is $_________.
  • I wish to make partial payments in order to pay off the full amount I owe to Licensee.
How to start a payday loan business

Start a PDL Company

[Want this form for your own use? Need it as a PDF or Word document? Email Jer@TrihouseConsulting.com or invest in our “Bible.” Both our payday loan and our car title loan Manuals include a multitude of aldditional forms, docs, check lists and more.]

Customer and Licensee agree as follows:

  • In satisfaction of the above debt, Customer authorizes Licensee to electronically debit the account on which the check was written. Licensee will use an Automated Clearing House (ACH) method, which is a nationwide electronic funds transfer system.
  • Licensee will electronically debit the account in the amount of $______.
  • Licensee will electronically debit such amount:

___ Weekly; ___Bi-weekly; ___Monthly; ___Other (Specify:_________________).

  • The electronic debit will occur on the _____ day of each ___________; ___Other (Specify:_____________).
  • Customer may pre-pay all, or if electronic debits have been made, the remaining portion of the above debt, in cash at any time. If Customer satisfies the full amount of the debt, this authorization for electronic debiting is immediately revoked.
  • If Customer makes payments according to this schedule, Licensee will not attempt other collection methods available to Licensee and will not re-present the check.
  • Customer will receive no additional notification of these electronic debits from Licensee. Customer may incur costs from the financial institution if any electronic debit is refused for insufficient funds.
  • If Customer defaults, in whole or in part, under the Agreement, or revokes this authorization for electronic debiting by giving written notice to Licensee at the above address, Licensee may utilize any collection methods available to it under the law. Customer may incur additional costs as a result.
  • Licensee will keep a record showing every payment received from Customer. Customer is entitled to a copy of such record during Licensee’s regular business hours, and a copy of this contract.
  • Upon successful completion of this contract, the original check will be returned to Customer.

 

____________________________________               __________________________________

Customer Signature                                                    Licensee Representative Signature

 

Date: _______________________________              Date:_____________________________

The post Example Payday Loan Partial Payment Agreement appeared first on Payday & Title Lending.

Payday Loan & Installment Leads

December 23rd, 2015

If you’re an installment lender, payday loan (single pay) lender, a title loan lender or in the lead generation industry, you should be aware of these trends. Lenders are quickly gravitating away from lead generators and their ping trees. When it comes to lending, the “Big Boys” are pulling all their lead gen in-house. They’re hiring talent and building expertise.

Here’s a visual aid from Enova to help you grasp how serious this strategy has become for payday loan, installment lenders, car title operators, line-of-credit providers and more. CLICK on the image to enlarge it! (Note: the “direct mail.”)

Payday loan leads

Click Image for Larger

Also, note the traffic sources for Enova leads. In 2009, lead purchasing was 67%. In 2014 it was 39%. Mobile stands at 48%!!

This is a common thread for lenders and does not bode well for Selling Source, T3 and the rest; at least regarding the payday loan, installment and car title lending industry. Of course, merchant cash advances are the newest trend; $300B loan potential!

NOTE: Click on the image to image it bigger.

 

 

The post Payday Loan & Installment Leads appeared first on Payday & Title Lending.

California Payday Loan Industry Statistics

December 15th, 2015

California Payday Loan Industry Statistics

Payday Loan Key Financial Statistics

The California Department of Business Oversight posted their annual report on the payday loan industry.

California Department of Business Oversight Annual Report: Operation of Deferred Deposit (Payday Loan) Originators Licensed under the California Deferred Deposit Transaction Law. (We include a link to their report at the bottom of this Post.)

The California Deferred Deposit Transaction Law (Payday Loan) (CDDTL), which became effective on January 1, 2003, shifted responsibility for licensing and regulating persons engaged in the business of deferred deposit transactions from the Department of Justice to what is now the Department of Business Oversight (DBO).

Pursuant to statute, the DBO annually publishes a report containing unaudited information provided by persons and companies licensed by the DBO to conduct deferred deposit transactions in California: Payday Loan Industry Statistics

In a deferred deposit transaction, commonly known as a payday loan, the consumer provides the originator a personal check for the amount of money they want. The originator provides the consumer the money, minus an agreed upon fee. The fee cannot exceed 15 percent of the amount the consumer receives from the originator. The originator then defers depositing the consumer’s check for a specific period of time, which cannot exceed 31 days. The maximum amount a consumer can receive is $300.

Data reported by the licensees for 2014 indicates the average dollar amount of deferred deposit transactions made was $235, and the average length of a transaction was 16 days. As of Dec. 31, 2014, the DBO regulated 2,014 licensed deferred deposit transaction locations. The licensees made 12,407,422 transactions with 1.8 million individual customers for a total dollar amount of roughly $3.38 billion. While the volume of payday lending has remained fairly consistent in California, the number of licensed locations has declined by about 19 percent since 2006.

Key California payday loan industry findings:

California Payday Loan Industry Statistics

Payday loan store count in California: This table shows there has been a steady decline in the number of deferred deposit transaction (payday loan) licenses. From 2006 to 2014, the number of payday loan licensees dropped by 479, or 19.2 percent.

California Payday Loan Industry Statistics

This table reflects the total dollar amount and total number of deferred deposit transactions made from 2006 through 2014. In 2014, the total dollar amount of transactions increased by 6.66 percent from the previous year, and the total number of transactions increased by 2.0 percent. The table also reflects a 2.19 percent increase from 2013 in the number of deferred deposit transaction customers. The average number of transactions per individual customer declined from 7.01 in 2006 to 6.82 in 2014.

California Payday Loan Industry Statistics

Payday Loan Industry Statistics for average California payday loan dollar amount in 2014 fell by 9.6 percent from 2013, to $235. That is the lowest payday loan average since the DBO started to collect full-year data in 2006. The average annual percentage rate of deferred deposit transaction fees (payday loans) also declined substantially in 2014 compared to the prior year, by 11.5 percent to 361 percent. That also was the lowest figure since 2006.

California Payday Loan Industry Statistics

California Payday Loan Industry Statistics

California Payday Loan Industry Statistics

 

Payday Loan Industry Statistics:

Link to California Department of Business Oversight: (Calif. Payday Loan Report).

The post California Payday Loan Industry Statistics appeared first on Payday & Title Lending.

ENOVA Payday Loan Job Position

November 22nd, 2015

Job Description

Payday & Installment Loan Analytics Services Manager

Your head honcho: Sr. Manager of Analytics

Our Analytics team:

Enova’s Analytics team consists of over 50 quantitative professionals dedicated to using the latest cutting-edge techniques to drive business value.   We are a shared service for the entire company and operate in four core Analytics workgroups:

  • Portfolio Analytics –we focus on building cutting edge risk, pricing, and underwriting models to optimize our lending decisions by using advanced modeling and simulation techniques to optimize the performance of our loan products and operations.
  • Fraud Analytics – analysts on the fraud team use advanced data mining techniques to identify and fight online fraud.
  • Marketing Analytics – the marketing analytics team is focused on applying statistical analysis and predictive modeling to help our marketing teams acquire and retain more valuable customers.
  • Research and Platforms- the RAP team builds and maintains all of our technical tools and platforms.  They help investigate new analytics methodologies, use cases, and data sources, to institute new and best practices within the department.

At Enova we have a company-wide culture that emphasizes data-driven analysis.

This is where YOU come in:

How to start installment loan companyAs an Analytics Services Manager you will be one of Enova’s most valuable resources.   You will be the delivery leader and SME for all of our Analytics products and services provided. You will demonstrate the ability and experience in building relationships both internally and externally.  You will serve as the point of contact for new business pursuits for our Analytics Services team.  Throughout client engagement you will lead the delivery to ensure exceptional results.

Kudos to you if you have:

  • A Master’s degree or PhD in related field of study
  • Experience in Analytics at a financial institution
  • A strong understanding of delivering financial services through the Internet.
  • Proven experience leading a credit/risk analytics, or modeling team, where team members were responsible for quantitative analysis, and model building.

Job Requirements

You’re right for this job if you have:

  • A Bachelor’s degree or equivalent experience, required
  • At least 12 years of experience in an Analytics or related field
  • Previous experience in client facing positions
  • Supported team members in managing projects in areas that involve

Analytics Services

  • Strategic and business development experience
  • Advanced knowledge of statistical/econometric modeling
  • Previous experience with advanced programming skills for meaningful data analysis
  • Must have strong business acumen and communications  skills

Click to Apply: here

The payday loan, installment lending, P2P, merchant cash advance… industry is experiencing unprecedented growth! Demand for loan products continue unabated while the loan products evolve.

The post ENOVA Payday Loan Job Position appeared first on Payday & Title Lending.

Payday Loan Industry Emergency

November 17th, 2015

Payday Loan Fan,

This is a payday loan INDUSTRY EMERGENCY!

PLEASE get your employees and your customers involved immediately; TODAY.

If you don’t, you and your small dollar loan business are HISTORY!

Do you think “big brother” and Mr. Obama should tell YOU when, where and how often you can borrow money?
Do you want payday loan and other short-term loan products to go the way of the dinosaurs?
Do you want to allow Mr. Obama to force you to close your doors, layoff your employees and advise your borrowers your payday loan services are no longer an option for them in a financial emergency?

As of this minute, We have 84,476 signed payday loan petitions opposing the “short-term lending rules being considered by the CFPB: Consumer Financial Protection Bureau.”

Go here NOW:
https://petitions.whitehouse.gov//petition/oppose-short-term-lending-rules-being-considered-consumer-financial-protection-bureau

Here’s a shortened version of the link above: http://1.usa.gov/1MaOVRa

Add your info to the Form on the right of your screen and SAVE our industry and our RIGHTS!
Only your first and last name initials along with your city and state will display.

You have until NOVEMBER 19th to SAVE OUR PAYDAY LOAN INDUSTRY as we know it.

Jer@TrihouseConsulting.com
702-208-6736

The post Payday Loan Industry Emergency appeared first on Payday & Title Lending.

Operation Choke Point List of Industries

November 6th, 2015

Operation Choke Point Targets:

 MANY industries sat back and watched as the payday loan industry appeared to be the only industry under attack by Operation Choke Point.

  • Ammunition Sales
  • Cable Box De-scramblers
  • Coin Dealers
  • Credit Card Schemes
  • Credit Repair Services
  • Dating Services
  • Debt Consolidation Scams
  • Drug Paraphernalia
  • Escort Services
  • Firearms Sales
  • Fireworks Sales
  • Get Rich Products
  • Government Grants
  • Home-Based Charities
  • Life-Time Guarantees
  • Life-Time Memberships
  • Lottery Sales
  • Mailing Lists/Personal Info
  • Money Transfer Networks
  • On-line Gambling
  • Pawn Shops
  • Payday Loans
  • Pharmaceutical Sales
  • Ponzi Schemes
  • Pornography[9]
  • Pyramid-Type Sales
  • Racist Materials
  • Surveillance Equipment
  • Telemarketing
  • Tobacco Sales
  • Travel Clubs
How to start a payday loan business

Start a PDL Company

We have methods and providers offering ACH processing, credit card processing, Image Cash Letters, debit card transactions… These providers and strategies are all covered here: “The Bible.”

 

The post Operation Choke Point List of Industries appeared first on Payday & Title Lending.