Lisa Servon, RiteCheck, Check Cashing and Underbanked Myths

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Regarding: “Tribal Online Lenders Need a Legal Attitude Adjustment”

Tribes have long suffered by being disenfranchised from participation in e commerce. It’s the right and duty of a sovereign nation to develop any and all conscionable opportunities for its members to succeed.

To deny any tribe, particularly those in the position of being geographically remote and unable to participate in natural resource, gaming, and energy enterprises, the benefits of participating in online lending, is nonsensical.

Tribes have the ability to add competition to an industry that sorely needs it. Millions of borrowers would be better off. And so will tribes.

YES I am biased. Jer – Trihouse

Galanda Broadman proposes some interesting startegies in her piece, “Tribal Online Lenders Need a Legal Attitude Adjustment.”

A review of recent federal judicial decisions against tribal online lenders shows that they are losing the war–resoundingly.

Arguments under Tuscarora that federal consumer protection laws of general applicability, have fallen flat. Arguments that these tribal enterprises are immune from federal enforcement action (see U.S. v. James), have not surprisingly fared even worse. Tribal sovereignty is being eroded in the process of each federal court controversy.

The tribal online lending industry needs a legal attitude adjustment. Or is it only a matter of time before the industry meets its demise. Instead of throwing traditional federal Indian legal arguments against the walls of federal courthouses, in hope that they stick–they haven’t yet–the industry needs to heed lessons learned by other tribes when over-zealous federal agencies like the IRS, FBI or ATF come barreling onto an Indian reservation or into a tribal economy.

Among other non-conventional tribal defense strategies, one that has been deployed effectively against such federal agencies of late is preemptive consultation:

[C]onsultation can be used as a sword—a preemptive strike that forces U.S. agencies to consult… Read more: Galanda Broadman



Payday Loans: Think Finance – Employer’s Help Employees Lower Fees

This item appeared back in December 2013. Few operators took notice. Fewer recognized the implications. A software platform that enables borrowers to access a “loan” on their earnings at less than a couple of bucks per $20 borrowed. The “lender” has zero defaults, zero collections, zero ACH charge backs and reversals, no licensing requirements, the borrower does not need a bank account… THIS WILL BE HUGE! And you thought only the “big guys” like Think Finance could participate? Get ready…

Sonic Drive-In restaurants around Phoenix have added a new item to their menu of workplace benefits: short-term, high-fee loans.Arizona Restaurant Systems Inc., a Scottsdale, Ariz., company that operates 28 Sonic locations in the state, allows workers to take out loans ranging from $150 to $500 that typically last two weeks.

The fees, ranging from $8 to $25 plus interest, don’t go to the restaurant franchisee, but to a lender called Think Finance Inc., which makes the loans. Based on the fees, the loans carry an effective annual percentage rate of 100% to 165%.

“Our employees are typically living paycheck to paycheck,” said Spencer Manke, chief financial officer of Arizona Restaurant Systems. He said employees typically repay the loans directly from their paychecks.

Mr. Manke’s company is one of a growing number of employers and payroll firms helping lenders pitch loans to their employees. Since 2010, at least half a dozen nonbank lenders have started marketing loans to companies and payroll vendors. Employer-based loan programs are now available to more than 100,000 workers, according to estimates drawn from several lenders. That number could expand to more than 10 million workers in the next few years based on projections…

Read the Wall Street Journal piece in it’s entirety here: WSJ

And another here: WSJ

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Payday Loan Disruption

Jer Trihouse Consulting

Jer Trihouse

I’m lucky! I’m able to speak with international and domestic small dollar loan lenders, vendors, industry associations, pundits, regulators and the media DAILY.

I’ve learned the best approach is to LISTEN. What have I learned?

Everything is going digital. The “old ways” are just that – old. Serious disruption is now the norm. These are truly fantastic times to be a lender IF you’re willing to change your game. If not, you’re DEAD!

What do you think? 

Jer – Trihouse