Category: Banking

22
Sep

U.S. Bank Simple Loan vs Payday Loan

The CFPB has compared bank & credit union overdraft [NSF] fees to a short-term styled payday loan products with a 17,000% APR!”

According to Pew a bipartisan – in our opinion – “research association” –  12 million people a year take payday loans. If borrowers can’t make the payment, they often pay more fees to renew the loan. Payday borrowers, Pew found, spend an average of $520 in fees to repeatedly borrow $375.”

Yes, and a taxi costs $4800 from New York City to Los Angeles. BUT WHO WOULD DO THAT?Continue Reading..

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19
Jan

CFPB Drops Suit against 4 Payday Loan Tribes

The CFPB continues to capitulate in the payday loan space!

President Trump and acting director Mick Mulvaney have had an astoundingly positive influence on the outlook for payday lending and the upbeat environment for US households as well.

Previously, the CFPB received an astounding 1,000,000,000+ comments from US consumers “praying” for continued access to payday loans and other small dollar loan products.

These consumer comments in the form of electronic and hand written communications fell on deaf ears at the CFPB.

The CFPB ignored them. Additionally, the CFPB ignored the payday loan industry, their employees, vendors and pro-payday loan legislators throughout the USA – of whom there are many.

This continued attack of a lawful industry became further weakened today by the announcement that the CFPB is dropping all lawsuits against 4 payday loan tribal lenders!

The lenders are: GOLDEN VALLEY LENDING, INC., SILVER CLOUD FINANCIAL, INC., MOUNTAIN SUMMIT FINANCIAL, INC., AND MAJESTIC LAKE FINANCIAL, INC.

The reason the CFPB threw in the towel? They want to ” consult with new leadership” at the CFPB  🙂

Before Hon. Julie A. Robinson, the FED’s filed a “Notice of Voluntary Dismissal” against the four lenders owned and operated by the Habematolel Pomo of Upper Lake.

NO REASONS WERE GIVEN!

[Sponsor: Need a bank account for your MSB or lending business? Want to “push” loan funds to a consumer’s phone? Need ACH, credit card or debit card process? Need a second “backup” enabling your Team to sleep at night? Get an introduction here: Click “PROCESSING.”

Recall that last October, under the lead of former Director Richard Cordray, the CFPB had intended to implement new rules requiring all lenders to make a determination as to the borrower’s ability to repay the loan.

This would have caused massive disruption; after all, the typical payday loan is less than $400! How on earth coild a lender be expected to analyize ther loan applicant’s personal income, household and expense situation? Most of these folks are simply caught in a temporary financial emergency; utilities turned off, car repair, prescription needed…

For many LONG months, the payday and car title loan industry has been expecting overly aggressive CFPB rules to be implemented.

Today? These expectations are at an end! President Trump’s administration has delivered a HUGE dose of common sense to “the business of lending money to the masses.”

[As a result, our inbound phone calls and emails for consulting, capital raises, bank accounts, credit and debit card processing and “$$ push to borrowers” is escalating dramatically! TrihouseConsulting@gmail.com]

These are proving to be VERY GOOD TIMES for US households and lenders! It’s been such a LONG time that we’ve had a sense of optimism and entrepreneurship in America.

FEELS GREAT!!

Here’s the announcement from the CFPB regarding the 4 tribes:

notice-of-voluntary-dismissal-c-4-Tribes-01-19-2018

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07
Jul

Payday Loans vs Bank NSF and Overdraft Fees: Reported by CFPB

You think payday loan, installment loan and car title loan APR’s are high?

You want to know why banks, credit unions and so-called consumer advocates hate small dollar lenders?

Did you know the folks who initially funded the Center for Responsible Lending [CRL] launched a credit union – an entity treated as a non-profit?

Follow the money…

Payday Loan, Installment Loan, Title Loan APR's vs Banks

Payday Loan, Installment Loan, Title Loan APR’s vs Banks

Check this out! The USA’s 628 biggest banks reported – after being forced to by the FFIEC – $11.2 BILLION dollars in NSF and overdraft fees in 2015. [2015 is the first year banks having assets exceeding $1B were required to report this number!]

$11.2 BILLION is 8% of these bank’s net income.

The median bank fee was $34.00. However, because of the way bank algorithms work, 25% of bank customers paid $90 per instance [2013].

Average payday loan APR? Just under 400%

The average bank NSF fee? 1400%

Now, realize that these banks have virtually ZERO RISK! They are at the front of the line. Their account holder; their customer – must pay the bank/credit union or they put their customer in the ChexSystem data base and close their customer’s bank account.

And, let’s not forget that the banks borrow their money from the FED’s for approximately 1%. THIS IS NUTS!

[Note: If you would like a copy of the original CFPB Report in PDF format, email: Jer@PaydayLoanUniversity.com ]

60 of the reporting banks derived 20% of their net revenue from overdraft and NSF fees!

  • So… installment, car title and payday lenders must raise capital at average rates of 1.5% to 3%+ per month; typically with personal guarantees.
  • Assume the risks associated with launching a new business.
  • Overcome the challenges the search engines place on them.
  • Face the continued negative pummeling brought down on them by their competition: banks and non-profit credit unions.
  • Approve loans for consumers with zero collateral.
  • Face-off the FED’s regarding Operation Choke Point – we did get a nice victory on this matter recently 🙂
  • Keep their loan portfolios on their books [balance sheet lending] vs securitization by the big boys.
  • And a host of additional B.S. that comes with the territory.
  • Banks and credit unions HATE US because we are cheaper!!

Now mind you, we are not whining! Just asking for a level playing field – never going to happen – AND the realization by all parties that payday loan, car title and installment loans make a GREAT DEAL of sense for millions of consumers EVERY YEAR!

 

 

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10
Jun

Payday Loan Operation Choke Point-Update

Operation Choke Point Lawsuit Update via Judge in District of Columbia.

Judge Kessler in the District of Columbia, denied a group of payday lenders allegedly affected by the Department of Justice’s (DOJ) controversial Operation Choke Point.

Banks for payday loan lenders.

Payday loan industry fails to demonstrate harm due to an inability to secure bank relationships.

“For example, the payday lender told the court that it received termination notices from 21 banks since 2013. But the company did not indicate how many banks it continues to have accounts or business relationships with leaving the court unable to conclude that they have been “cut off” from the system. ‘In sum, the fairest reading of Plaintiffs’ submissions is that, presently, they do have a right to hold bank accounts and otherwise access the banking system,’ the court wrote.”

Car title loan company

Start a PDL Business

The CFSA and additional payday loan plaintiffs requested the U.S. Court of Appeals for the D.C. Circuit to review their case.

Here’s a link to the “Opinion.”

Here’s a link to the original discussion appearing in JD Supra.

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28
Nov

Bank Accounts for Payday Loan Lenders

Payday loan lenders and micro-lenders continue to suffer from “bank discontinuance” issues as a result of “Operation Choke Point” launched by the Obama administration in August 2013.

The Community Financial Services Association of America (CFSA) and Advance America said ” a preliminary injunction was needed to end the back-room campaign of coercion by the Federal Reserve, the Federal Deposit Insurance Corp, the Office of the Comptroller of the Currency, the CFPB [ruled unconstitutional by a D.C. Court]  and competitors masking themselves as so-called consumer protectionists.”

U.S. regulators are collaborating in an attempt to stop banks from offering banking services to micro-lenders in an effort to force consumers in need of emergency funding to beg, borrrow or steal when facing financial stress.

Nearly 50% of U.S. residents are unable to access $400 cash [Link to Federal Report] when faced with the need to fix their car to continue working, purchase a medical prescription for their child or a family member, turn on their heating or electricity…

Payday lenders, istallment lenders and additional small dollar lenders requested a federal judge for immediate relief! 

Jer Ayles-Ayler Trihouse Consulting

Jer TrihouseConsulting

The survival of mom and pop loan businesses is at stake!

It’s rumored that the big, multi-billion dollar online Fintech lending companies – SOFI, Lending Club, Prosper, Marcus, Avant, Enova… are adding additional pressure to wipe-out the small dollar lending industry; including the small independent store owners.

Advance America said its own situation became dire after five banks decided in the last month to cut ties, including a 14-year relationship with U.S. Bancorp, “putting it on the verge of being unable to maintain a bank account.”

The small lender national association injunction requests the federal court to “order the agencies to cease and desist from harming the reputations of Advance America and other CFSA members; from applying pressure on banks, encouraging them to terminate relationships with the banks and other CFSA members; denying CFSA members access to financial services; and from depriving members ability to pursue business.”

Instead of eliminating the “bad apples” of the payday industry, the agencies have “set about to choke off the life-sustaining financial oxygen that the entire industry, and millions of under-banked individuals, depend on.”

The CEO for CFSA, Dennis Shaul, stated that the results of Operation Choke Point for the payday loan, installment loan and micro-lending industry has been “dire.”

Mr. Shaul says that U.S. Bank has dropped its affiliation with several members, including Advance America, allegedly putting the company “on the verge” of being unable to maintain a bank account.

Another example by CFSA is thata smaller payday lender, DollarSmart Money Centers,  was forced to close when it lost all its banking services.

Here’s a link to the Injunction by the CFSA vs. the FDIC

Here’s a link to the Original Request

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