Operation Choke Point: Court Orders FDIC to Turn Over Docs to Payday Loan Industry Assoc.

FDIC Ordered to Turn Over Documents in Operation Choke Point Lawsuit to PDL Industry Assoc.

‘Time for DOJ and FDIC officials to get a lawyer!’

The Federal Deposit Insurance Corporation (FDIC) was ordered to turn over documents related to Operation Choke Point late last week.

District Court Judge Gladys Kessler told the government agency it had to begin working with the plaintiffs in the case for a nine-month discovery period beginning on June 20, 2017. “There is no justification whatsoever for not granting Plaintiffs’ Motion to Commence Discovery Immediately,” Judge Kessler said in her order.

Payday Loan Industry – The order comes after the Community Financial Services Association of America (CFSA) and a group of financial services companies filed suit against the FDIC over their conduct during Operation Choke Point. Under that operation banks were allegedly pressured into cutting ties with industries the Obama-era agency viewed unfavorably. Payday and other short-term lenders as well as those involved in the firearms industry said they were specifically targeted under the program.

The firearms industry has been particularly vocal in its opposition to Operation Choke Point. The National Rifle Association and other gun-rights groups have called the operation an attack on the industry.

Stupid things payday lenders do“‘Operation Choke Point’ is an Obama Administration initiative that encourages federal financial services regulators to harass and intimidate banks and financial institutions that work with firearm and ammunition retailers,” the National Rifle Association said in February 2016. “By leaning on the banks, regulators hoped to bring an end to those relationships thereby choking off their cash flow and forcing them out of business. A 2015 Congressional Investigation revealed that ammunition and firearm sales and dealers had, in fact, been targeted.”

CFSA said they were happy with the court’s order and believe the documents they will receive during discovery will shed light on whether the FDIC forced banks to deny certain businesses their services and, if so, how they chose which industries to target.

“We are thrilled by the Court’s order to enter the discovery phase, as this illegal federal program has been unduly harming legal entities for years,” Dennis Shaul, CEO of CFSA, told the Washington Free Beacon. “This court order allowing discovery will now finally enable the plaintiffs to access records of the federal government’s behind-the-scenes and secretive campaign to force banks to terminate their relationships with lawful American businesses. It is high time that the government’s unlawful and unjust crusade against lawful and licensed businesses be stopped. The federal regulators leading Operation Choke Point have threatened and pressured banks in the shadows of the law for far too long.

“The government defendants are well aware they have been on the wrong side of history for years and will stop at nothing to hide the extent of their illegal campaign. The Court’s ruling will allow these shady and criminal actions to be brought to the light of day.”

“The decision to grant discovery is probably the most important victory in the entire case, likely more important than the final judgment.”

Read this Report in FULL here: FreeBeacon.com
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Biggest Payday Loan Game Changer? Bet You Can’t Guess!

Nope! It’s not compliance, regulation or the CFPB. You’ve seen this coming since the day you got into this game. Game changing rules are a fact of life as a money lender.

Wrong! It’s not John Oliver’s Last Week Tonight Show laugh your ass off satire on the payday loan industry. Even John had to admit that nearly 50% of your customers are happy you’re here.

Nah! It’s not the 1200%+ APR’s you charge your borrowers.  Even the CRL admits behind closed doors that money cannot be loaned at 36% unless it’s subsidized by tax payers.

Zilch again! It’s not the ACH debacle that sent you scurrying for Rolaids last October.

Uh-uh. It’s not the loss of your bank account, stored value cards, kiosks, “Operation Choke Point” or any of the other arrows, bullets, grenades and drones you’re having nightmares about.

Give up? Ok, before I tip my hand, think about the problem you’re trying to solve. Think about the pain your customer is experiencing daily. Your customer wants access to money fast and easy. No hoops to jump through. No “financial education” course. She wants minimal paperwork and hassle.

Your customer wants, needs and is literally begging for small dollar credit NOW!

Smart lenders focus on reducing the “friction.”

Borrower behavior has changed. The 1% can regulate a LOT of things but they can’t successfully regulate consumer behavior. Eventually, regulators have to recognize and embrace reality or risk revolution. Think marijuana, alcohol, drugs, prostitution, money lending…

Google, Amazon, Uber, and  iTunes  changed the way consumers behave.

The phone is the HUB!

A generational shift is occurring now.  The phone is the HUB! Smart phones reduce the “friction” in financial services. The Kindle changed the way people buy books. Smart phones are changing the way consumers borrow money.

You need an example? Here’s a simple one:

Another example:

  • Whip out your phone. Open your web browser and type in “AceCashExpress.com.” Take a CLOSE look at the website.
  • Now, use your desktop, laptop or iPad and repeat this step; AceCashExpress.com . See the difference? It’s MAJOR!

Both AutomobilePawn.com and AceCash.com recognize the device used to visit their website. It’s automatic.

The difference is immediate! Using their phone, a borrower can simply click a button and apply for a loan, get directions, send a text or email message, make an appointment or share the website with friends and family members in need.

The SMART PHONE is the REAL game changer in the Small Dollar Credit (SDC) space! The rest is all noise.

Your task is to reduce the “friction” in lending. Figure this out and you can earn a higher ROI lending money than in any other industry AND survive the slings and arrows headed your direction.

How does your business “look” on YOUR customer’s phone?

Here’s an inexpensive solution: EZMobileToday.com

Jer@PaydayLoanIndustryBlog.com

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6 Key Personalities in the Payday Loan – Small Dollar Credit Industry

Who are the Significant Players in the Payday Loan Small Dollar Credit Space? 

Medium.com seems to think it’s Benjamin Lawsky, Western Sky, Scott Tucker, Richard Cordray, Jer with Trihouse, and Four Oaks Bank. Small dollar credit is evolving rapidly! This was outdated the day it appeared.
Who’s Who in the World of Payday Lending

1. Benjamin Lawsky:

Benjamin Lawsky

Benjamin Lawsky

Benjamin Lawsky is in charge of the New York Department of Financial Services. He’s been aggressive as hell towards the payday loan – small dollar – credit industry. He blew-up the industry last summer when he wrote a letter to 117 banks demanding that they stop ACH processing of online payday loans to residents of New York. Without a doubt, Lawsky’s team found the “Achilles Heel” of the payday loan industry; the ACH payments platform.

2. Western Sky:
Highly controversial Western Sky was sued by a multitude of attorneys general and finally ceased lending. Run by M. Webb, an individual member of the Cheyenne River Sioux Tribe, Western Sky was not immune from state lawsuits. To qualify for tribal immunity, a payday lending business must be blessed by a true tribe economic entity and benefit the tribe’s members substantially. This is still playing out in the courts.

3. Scott Tucker:

Scott-Tucker

Scott-Tucker

Scott Tucker is one of the early payday lenders from “payday loan central;” Kansas City. Mr. Tucker is engulfed in state and federal lawsuits. He too was an early advocate of the tribe lending model. The courts are determining how well his strategy will pay out. Set up “Google Alerts” to keep abreast of Mr. Tucker’s status.

4. Jer Ayles-Ayler:

Jer-Trihouse

Jer-Trihouse

Simply referred to as “Jer,” he  is a Newport Beach, CA-based consultant, well known throughout the payday industry for his “Payday Loan Bible” ($367.95) and his colorful, rambling e-newsletter, dispensing “payday loan insider strategies.” The latest one advocated employers to get into the “workplace advance business.”“‘Workplace Cash Advances’ trump all other payday loan/small dollar loan solutions for employees. Opportunities for entrepreneurs are here —NOW,” he wrote. Jer and his team offer advice for prospective payday lenders for $5/minute.

5. Four Oaks Bank:

Four-Oaks-Bank

Four-Oaks-Bank

Four Oaks Bank, in North Carolina, is the latest target of Operation Choke Point, the Justice Department’s crackdown on illegal online payday lending.

6. Richard Cordray

Richard-Cordray

Richard-Cordray

Consumer advocates, payday lenders, banks, and vendors are focused on Richard Cordray, the director of the Consumer Financial Protection Bureau. Since the CFPB was created in 2011, it has published several studies that claim payday lending can trap consumers in a “cycle of debt.” The CFPB continues to be very aggressive and created a data base collect consumer complaints about payday lenders, sued Cash Call, collaborates with “Operation Chokepoint” and a plethorat of additional directives in an effort to shut down lawfully licensed payday loan businesses.

Note: a somewhat similar version of this Post appeared here: Medium.com I’ve added our interpretations to their original observations.

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