THE BLOG

23
Sep

Payday Loan Lawsuit

Another Payday Loan Lawsuit

Are you a payday loan lender? Be aware! You’ve got a target on your back. The bigger we get the more often it makes sense to settle rather than fight these class action payday loan lawsuits. I’ve “been there – done that.”

Three former non-exempt employees sued PLS Financial Solutions of California, Inc. (formerly Payday Loan Store of California, Inc.) and PLS Check Cashers of California, Inc. on behalf of themselves and others and alleged various California Labor Code violations  including, but not limited to:

  • Unpaid meal and rest premiums
  • Failure to pay all regular and overtime wages
  • Unpaid and/or untimely vacation wages
  • Waiting time penalties
  • Failure to provide and maintain accurate paystubs and civil penalties under the Private Attorney General Act.

Stupid things payday lenders doAfter extensive investigation and an exchange of relevant information, the Parties agreed to enter into private mediation to try and resolve the claims.  The Parties attended mediation and thereafter reached the Class Settlement memorialized in the Joint Stipulation of Settlement and Release on file with the Court, and whose terms are generally summarized in this Notice… Click here to read the Settlement in it’s entirety.

You can still profit handsomely in the small dollar credit space BUT you must know what you’re doing. Get all the startup info here: Payday Loan Manual.

21
Sep

Installment Loan Profits: The Business of Installment Loans

Installment Loan Profits

An installment loan business offers tremendous opportunity BUT there are caveats. The first is the implementation of the 36% APR that many consumer advocates propose.

A $500 installment loan for a period of six months at a 36 percent APR produces total revenue of $53.79; just under $9 per month. If just one loan in a portfolio of these installment loans default, the installment loan lender must make ten “good” loans to recover their loan principal on the one bad loan, without considering operating costs on any of the installment loans in their portfolio.

installment loan business

To the tune of “Everything’s gonna be alright.”

The installment loan lender still requires enough revenue to justify obtaining and maintaining the lending location or internet platform, customer acquisition costs, hiring and paying their installment loan employees, acquiring the supplies and equipment required to run an installment loan business, the costs of maintaining ACH, loan management and Image Cash Letter (ICL) vendor relationships, securing a dependable bank account and all its attendant costs, and complying with the regulations both at the state, FED and or Tribal level.

A DAUNTING TASK, 36%? I Guess the so-called consumer advocates whose agenda is <36% APR’s would like to see installment lenders make it up with volume 🙂

17
Sep

Impact of City Ordinances on Payday Loan Lending

Payday Loan City Ordinance Impact

What impact do payday loan city ordinances have on payday loan store-fronts, commercial property owners, employees, payday loan borrowers and ancillary businesses?

City bureaucrats weep:Local ordinances restricting access to small dollar credit do not restrict usage but drive consumers to other forms of credit.”
Tim Ranney, President of Clarity Services.

I would add, specifically to the Internet! Jer Trihouse

Clarity-Services-1

Change in online and storefront payday loan usage before and after city ordinance passed

City ordinances drive borrowers to the Internet

Change in online and storefront payday loan usage before and after city ordinance passed

Data Set:

  • 750 million consumer inquiries
  • 100 million storefront records
10
Sep

Texas CAB-CSO Convention TOFSC

Texas Organization of Financial Service Centers

September 2015 Conference

“Michael Brown, President of the Texas Organization of Financial Service Centers (“TOFSC”) cordially invites you to attend our annual afternoon Conference in Austin, Texas on Wednesday, September 16, 2015. The event will be hosted at Sonesta Bee Cave beginning at 10:00am.  This year’s conference will be our fourth annual event.”

For more information  email Jer@TrihouseConsulting.com

How to start installment loan company It is our intent for the conference to provide attendees an opportunity to meet, greet, and socialize while  being presented with information on important issues in today’s Texas CAB-CSO payday loan, title loan,  installment loan and other small dollar loan products being offered in the Texas marketplace today.

Lunch will be served along with light snacks and beverages throughout the day. A cocktail mixer with  appetizers will be hosted starting at 5:30pm.

  Among the invitees to TOFSC are:

TOFSC Members

Credit Access Businesses – CAB and CSO

Third Party Lenders

Money Service Businesses

OCCC Representatives

Law Firms

Credit Reporting Agencies

Other Product and Service Vendors
Fees / Attendance:

Members: $200

Non-Members: $300

Vendor Association Members: $250

Vendor Non-Association Members-Exhibit Station: $300

Vendor Non-Association Members-Exhibit Station: $600

Feature Speaker/Sponsor: $1,500

*Fee is per person.

 

Again, reach out to Jer@TrihouseConsulting.com. My Team will forward your inquiry immediately.

Michael & his crew look forward to seeing you there!

08
Sep

Payday Loan Laws

Payday Loan Laws

Payday Loan Interest-Rate Caps

The following states have enacted laws that render payday loans void if they exceed the usury limit:

  • Minnesota, which caps interest rates for (a) written loan contracts at 8% absent applicability of another statute, Minn. Stat. § 334.01, subdiv. 1; and (b) consumer short-term loans at 21.75% APR, or the total of 33% a year on the part of the unpaid balance up to $1,125 and 19% a year on the part of the unpaid balance above $1,125. Minn. Stat. §47.59, subdiv. 3(a). Loans that exceed these rates are void and the borrower has no obligation to pay any amounts owing on them. Minn. Stat. §§ 334.03, 47.601, subdiv. 6(b);
  • Arkansas, whose state constitution provides that all contracts with interest in excess of 17% “shall be void as to principal and interest . .. . “
  • New Hampshire, which prohibits annual interest rates above 36% for loans of $1o,ooo or less. N.H. Rev. Stat. § 399-A:12(I). Loans that do not comply with those restrictions are void, and the lender has no right to collect any principal, charges, or recompense. N.H. Rev. Stat.§ 399- A:u(V);
  • New York, which prohibits any person or corporation not licensed by the state of New York from “directly or indirectly charg[ing], tak[ing] 16 Case 1:15-cv-05211-CM Document 6 Filed 07/31/15 Page 17 of 32 or receiv[ing] any interest … at a rate exceeding” annual interest of 16% on covered loans. N.Y. Gen. Oblig. Law§ 5-501; N.Y. Banking Law 14-a(1). Loans that exceed the rate are void. N.Y. Gen. Oblig. Law§ 5-511; see also Szerdahelyi v. Harris, 490 N.E.2d 517, 522-23 (N.Y. 1986) C'[A] usurious transaction is void ab initio … . “);and North Carolina, which imposes a tiered set of interest-rates limits with a maximum of 30% on loans below $15,000 and repayable between 12 and 96 months. N.C. Gen. Stat. § 53-176(a). Loans that violate this provision are void, and the lender has no right to collect, receive, or retain any principal or charges. N.C. Gen. Stat. § 53-166(d).
  • Colorado prohibits annual interest above 12% on unpaid balances for loans other than supervised loans. Colo. Rev. Stat. § 5-2-201(1). For supervised loans, Colorado prohibits a supervised lender from receiving a finance charge exceeding the equivalent of the greater of either of the following: (a) the total of 36% on unpaid balances of $1,000 or less, 21% on unpaid balances between $tooo.o1 and $3,000, and 15% on unpaid balances greater than $3,000, or (b) 21% per year on unpaid balances. Colo. Rev. Stat. § 5-2-201(2). Consumers are relieved of the obligation to pay any charge that exceeds these limits and are entitled to a refund from the lender or assignee for any excess amount that they paid. Colo. Rev. Stat. § 5-5-201(2).
How to start a payday loan business

Start a PDL Company

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