THE BLOG

22
Mar

Florida Payday Loan Laws

Great News for Payday Lenders, Personal Loan Lenders, & Signature Loan Lenders in Florida!

The state of Florida is eliminating much of the friction that has existed for payday loan, personal loan and signature loan businesses .

Florida Gov. Rick Scott signed Payday Loan Bill (SB 920) that doubles the current limit on payday loans from from $500 to $1,000 and enables lenders to offer 60-to-90 day loans.

Of course, the so-called “consumer advocates” (for you and me that translates into banks, credit unions, pawn shops… all our competitors) have said the new rules will create a debt trap for poor people. Ah… if only they had a clue!

Existing lenders (Amscot?) have said they needed to change the law because of potential new federal regulations. Supporters contended that payday lenders might have had to shut down without the change.

The bill authorizes deferred presentment installment transactions under Florida law.

A deferred presentment installment transaction must be fully amortizing and repayable in consecutive installments, which must be as equal as mathematically practicable. The term of a deferred presentment installment transaction may not be less than 60 days or more than 90 days and the time between installment payments must be at least 13 days but not greater than 1 calendar month.

REMINDER

How to Start a Loan BusinessNeed help with your loan business? For startups, invest in Course 1. More advanced? Invest in our Powerhouse Courses. PaydayLoanIndustryBlog.com/ Car title lending also.

The maximum face amount of a check taken for a deferred presentment installment transaction may not exceed $1,000, exclusive of fees. The maximum fees that may be charged on a deferred presentment installment transaction are 8 percent of the outstanding transaction balance on a biweekly basis.

Fees for a deferred presentment installment transaction are calculated using simple interest. Prepayment penalties are prohibited.

The bill retains current law in prohibiting a provider from entering into a deferred presentment transaction with any person who has an outstanding deferred presentment transaction or whose previous transaction has been terminated for less than 24 hours. If a drawer timely informs the provider in writing or in person that they cannot redeem or pay in full in cash the amount due and owing, the provider must provide a grace period for payment of a scheduled installment.

Effective Date: 7/1/2019

13
Mar

Seed/Angel Funding with Tribe Lending Enterprise [TLE] & Experienced Servicer

  • The Opportunity: Seed/Angel Funding with Tribe Lending Enterprise [TLE] & Experienced Servicer A highly experienced Team of two founders & a TLE are launching a tribal online loan portfolio in the USA. FOUNDERS’ DETAILS:
  • Founders’ contribute $1.1M cash to this launch
  • Founders’ contribute their lead aggregator company having generated 500K sub-prime consumer leads/month
  • This is not their first rodeo
  • U.S. based Team
  • Tribe lending model with a multi-pay installment loan product in 45 states.
  • Founder(s) previously successfully launched and exited tribe online loan portfolio
  • Founder(s) previously launched a highly successful online loan platform/portfolio in the most competitive, complicated state in the USA
  • Founder(s) previously serviced $20M sub-prime loan portfolio and 40K loans
  • Founders’ are family oriented – obligations, dependents, motivated, strong willed, driven, impeccable credentials… [I always favor these conditions when I collaborate.]
  • Founders’ know their loan product KPI’s. Realistic. Experienced. Well versed in Cost per Funded Loan, First Time Defaults, Customer Acquisition Costs, Lead metrics/costs…
  • Founders’ loan management software platform provides investors with 100% transparency hourly, daily, weekly, monthly… access to all accounting, reports…
  • In-house call center with highly experienced call center operations manager on Team
  • Tribe [TLE] Marketing/Servicing agreement in place with a large, sophisticated TLE – several $10M/$30M+ portfolios. • Supremely customer focused loan product offering financial literacy and credit building
  • ACH, bank accounts, CRA’s, EIN, lead generation… in place.
  • Founders have commissioned compliance officer, TLE employee(s), call center, accounting… Investor(s) • Provide $3M to be deployed year 1
  • Interest rate for investors = 15% to 24% paid quarterly
  • 15% to 50% equity to investors
  • Investor funds to be returned year 5
  • End of year 5, Investor return is $7.4M on $3M investment plus investor maintains their negotiated 15% – 50% equity in the enterprise.
  • OBVIOUSLY NO GUARANTEES:
  • Conservative performance estimates!

Year 3 = 80% return on loan portfolio

Year 4 = 100%

Year 5 = 125%

Year 5 Stabilize new investment money inflow = annuity of $750K/year.

As they say, “Your results may differ.”

• Exit strategy: maintain the portfolio as an “annuity” [estimated at $938K/year] or sell the loan portfolio for 2.2X. NEXT STEP?

• Email your contact information to: TrihouseConsulting@Gmail.com

• Conference call(s) • Meet each the Founders!

• Fall in love

• Nail down a Term Sheet.

09
Mar

Texas CAB’s, CSO’s and 3rd Party Lender FAQ’s

Texas CAB – Texas CSO- Texas 3rd Party Lender

Texas Credit Access Businesses obtain credit for a consumer from an independent third-party lender in the form of a deferred presentment transaction or a motor vehicle title loan, more commonly referred to as “payday loans” or “title loans.”

In Texas, the actual third-party lender is not licensed, rather the credit access business that serves as the broker is the licensee in this regulated industry. The credit access business charges a fee to the consumer for obtaining the third-party loan; this fee is usually calculated as a percentage of the loan amount.

Third-party lenders typically earn an initial 10% interest and often participate in consumer NSF and late fees; 12% – 14% APR’s are not uncommon.

The borrower will sign a promissory note with the lender for the actual loan and a separate credit service agreement with the credit access business. Generally, all documents are signed at the credit access business location and payments are made directly to the credit access business.

For more Texas CAB – CSO – Third Party Lender informaion: Texas CAB

06
Mar

Payday Loan Lender Preparing for Another Board Meeting

RIICO charges, class action lawsuits, payday loan lender annual conventions, CFPB, state AG’s… what’s a payday loan guy or gal supposed to do? Take a nap next to the boat!

Payday loans

Preparing for another challenging day while enabling average Joe’s and Jill’s to get access to small dollar loans.