Because none of you are smart enough,” says Mehta. “You make the stupid laws and I’ll comply and I’ll make money

In case you missed this,former Providan Bank executive revealed the contempt in which he holds borrowers in this short video:

“Because none of you are smart enough,” syas Mehta. “You make the stupid laws and I’ll comply and I’ll make money. . . . There are always some desperate people who will take the product. Lending money to people is never a difficult exercise. OK? People will take money if you’re willing to give it to them.”

“Lending money is never a difficult exercise.” Below, an excerpt of the Frontline program “The Card Game” with Mehta:


Lending: Bitcoin, Payday Loans, The AFS Industry

Lot’s of discussion occurring regarding virtual currencies like Bitcoin. We Lenders are a crafty bunch. The regulators are always playing catch-up although they will “slap-your-hands” if you aren’t careful. We live in exciting times. Look below the surface… see the future! List of businesses accepting virtual currency.  The Fed’s are beginning to notice as reported in the WSJ. Manhattan bar now accepts Bitcoin:  Will Lenders/consumers accept Bitcoin? Where are we headed??

What do YOU think?

Jer – Trihouse: The Payday Loan Industry



Payday Loan Internet Lending: More Heat

Continued reporting on the payday loan industry by New York Times reporter Jessica Silver-Greenberg:

“JPMorgan, the nation’s largest bank by assets, will give customers whose bank accounts are tapped by the online payday lenders more power to halt withdrawals and close their accounts.”

“Under changes to be unveiled on Wednesday, JPMorgan will also limit the fees it charges customers when the withdrawals set off penalties for returned payments or insufficient funds.”

“JPMorgan said that the bank will charge only one returned item fee per lender in a 30-day period when customers do not have enough money in their accounts to cover the withdrawals.”

No doubt, there are still some “bad players” in our industry. But the days of automatic roll-overs, multiple ACH’s resulting in excessive consumer bank fees… are coming to an end and the smart guys know it.

Forward thinking, long-term “players” in the payday loan space have understood the necessity of embracing best practices, strong branding, acceptance of compliance and disclosure, and great customer service as basic requirements for long-term profitability in the AFS (Alternative Financial Services) space!

The payday loan product is evolving. Millions of consumers use them – or some form of AFS product –  world wide. The payday loan industry is maturing and iterating. “Bad guys” will be pushed aside while responsible Lenders will profit handsomely.

Ultimately, consumers of AFS products will decide who the winners and losers are, not the regulators or the banks. Jer – Trihouse

Link to the Jessica Silver-Greenberg piece.

Link to The New York Times piece.


Heads-Up: Texas CSO/CAB SB1247 Update

From Michael Brown at:

Hello All – today I testified at the Senate Business
& Commerce Committee Hearing.  I was able to speak for 3 minutes and did an
adequate job of identifying the biggest issues for our group.  As a follow up to
my comments, please call the Senators offices listed below and leave them this
message.  If you are comfortable please provide your information in the email
and voice mail.

(Note: Receive personal updates from Michael here: )
( )

Hello Senator xxxxx

I am a smaller licensed CAB
owner, and I am calling to submit my comments on “SB 1247”.  The small to
mid-size CABs are willing to support many of the new rules proposed in the bill,
however, the “only one loan” rule would be catastrophic for our segment of the

Senate Bill 1247 will result in a drastic decrease in fee
revenue for my business.  In other states where this rule was imposed it
decreased fee income nearly 50%.

Small business owners will suffer most
if this bill passes as-is and this is why we have no choice but to oppose the
bill.  Please know that stores will close, and Texans will lose their jobs due
to the “only one loan” rule.  After the locations close and access to our
face-to-face loan services become restricted, consumers will simply turn to the
internet to get the loan they need.

I respect our customers and provide
fair services when they need it most – please let me continue to compete for
those customers.  Thank you for listening to our industry’s position and we look
forward to submitting further comments as bill revisions are

Please email me or call me at xxx-xxx-xxxx if you have any

We need your help,


Van de Putte








Michael Brown 214.293.8676


Texas: Guns, Payday Loans, CABS-CSO’s, 3rd Party Lenders and Car Title Lending in Texas

Jer Trihouse Payday Loan ConsultingThe state of Texas has long held a reputation for personal freedom, low taxes, and minding one’s own business. Texas attorney Greg Abbot recently ran this ad in The New York Times, “Wanted: Law abiding New York gun owners looking for lower taxes and greater opportunity.”

The Facebook landing page reads, “We have right to work laws and a reasonable regulatory environment. Texas has created more than 275,000 jobs in the last year alone! And we’ll fight like hell to protect your rights. You’ll also get to keep more of what you earn and use some of that extra money to buy more ammo.”

So, all appears well in Texas. Except Atty General Abbot has not managed to enlighten Texas Senator John Carona regarding the “reasonable regulatory environment” nor the “jobs” theme!

SB 1247, introduced by Senator Carona is perhaps the most draconian, job killing, consumer coddling, Texas legislation in a long, long time.

(As you read this, remember that the state of Texas already has strong small dollar loan consumer protection legislation in place!)

In a nutshell, here is SB 1247:

*18 pages of gobbly-gook. No consumer, business operator, regulator or court will have a clue as to how 80% of this bill is, or will be be, interpreted and enforced. No small business person in their right mind will risk the fines and compliance burden SB 1247 would implement. That being said, uncertainty will drive Texas entrepreneurs and consumer small dollar loan choices underground or out of existence.

*A consumer may only have 1 loan out with a CAB. What the…! How does this work? Does the Senator plan to block all access to the Internet? China, North Korea and Iran cannot even achieve this. Internet lending transaction volume is growing 30% per year. Why so slow :o) Because in 30+ states, borrowers can still get a loan from their local business man. You know, that business woman who leases office space, employs Texans; Texans who pay taxes, buy McDonald’s burgers, purchase homes and rent apartments.

Will the Senator setup road blocks at all the Texas state-lines and search all vehicles for payday and car title loan contracts?

We all know the Senator’s ultimate, longer-term strategy is to employ a state data base as implemented in Florida, Oklahoma, etc. Based on real world evidence, state data bases are not the panacea they were once thought to be. You want a $500 loan? Grab your phone, enter “Austin payday loan,” click the link, fill out the application and the $500 will be in your account in the morning. (Hell, with today’s technology, a borrower can pull this off on a Sunday and spend the $$ Sunday afternoon!)

Alternative finance services (AFS) products including installment loans, line-of-credit loans, payday loans, car title loans, a loan on your Rolex… are all accessable from a Lender in another state, another country, an indian tribe in the U.S./Canada, or a store you can walk into.

I could go on but read the bill for yourself over at ! (A great Texas resource I might add :o)

Simply said, draconian legislation is not the answer to solving the financial challenges 20 million consumers faced last year when they chose – “voted” – for access to payday loan styled products. AFS Lenders WANT THEIR MONEY BACK. They will not loan their hard-earned capital to borrowers unable or unwilling to pay it back or in states that make it too tough to collect their money. (Funny thing: One experiment “suggested payday loan borrowers who received an interest-free loan were as likely to take out successive loans as those who paid the normal interest and fees.” –Fusaro and Cirill 2011)

Witness the recent introduction of safe-harbor payday loan legislation in North Carolina, PA… Why? Because the legislators of these states, and others, recognize their constituents insist on using AFS products to solve their financial challenges. Consumers need AFS products and demand access to them. A Bertrand and Morse Study (2011)  conceded that “loans maybe fairly priced and that many borrowers are fully informed, capable and simply face a pressing need for cash at a moment when they lack other, cheaper forms of financial aid.”

You want AFS fees paid by consumers to decrease? Make legislative compliance easier to comprehend and allow competition in the marketplace. (I’ve got a New York Federal Reserve paper to prove this theory as well – Donald Morgan: Defining & Detecting Predatory Lending)

ENOUGH for now :o) Jer Trihouse Consulting  702-208-6736