THE BLOG

15
Mar

Payday Loan Industry Report

As in everything in life, there is a caveat to this “Payday Loan Report.” That is, I’m referring to single-payment loan products. This is an important distinction because the payday loan industry has been evolving away from “payday loan single-payment” loan products to installment loan products for the last several years.

Example: ENOVA, a publicly traded “payday loan company did roughly $300M in loans last quarter. Of that, approximately 12% was a “payday loan” product. That’s down from 4-5 years ago when the “payday loan” product exceeded 70% of their loan volume. Installment loans tend to have larger loan principals and somewhat longer payback periods. This is the industry trend!

Additionally, some states report fewer loan transactions. As if “business is down.” That’s not accurate. The state’s rarely account for internet generated payday loan/installment loan/line-of-credit loan volume. AND, they completely ignore the tribe model!

What is a Payday Loan?
A payday loan is a small amount, short-term loan. The consumer must either provide the
lender direct access to their checking account or write a post-dated check for the loan
amount plus a fee based on the original loan amount.

Typical Payday Loan Terms

The terms for payday loans are determined by the licensing model implemented by the Lender.

Many Lenders employ the State license model.

As an example, here are the legal payday loan fees allowed in the state of Washington.

  • Minimum Loan Term: a due date on or after the date of the borrower’s next pay date. If a borrower’s next pay date is within
    seven days of taking out the loan, a licensee must set the due date of a small loan on or after the borrower’s second pay date.
  • Maximum Loan Term: 45 days, unless the term of the loan is extended by agreement of both the borrower and the licensee and no additional fee or interest is charged
  • Maximum Loan Amount: $700, or thirty percent of the gross monthly income of the borrower, whichever is lower
  • Maximum Fee: 15% on the first $500. 10% on the amount greater than $500
  • Example: A loan for $500 + $75 fee = $575 repaid. A loan for $700 + $95 fee = $795 repaid.

On the other hand, California law specifies a maximum loan principal of 15% of the amount of the loan. [Basically, that’s $17.66 per $100 loaned.]

Florida payday loan laws specify 10% of the amount of the loan principal with a $5.00 first-time application fee.

The Tribe Model payday loan fees vary also. The average fee charged a consumer by a Native American federally recognized tribe is typically $20 – $30 per $100 loaned.

The Texas CAB/CSO model does not dictate minimum payday loan fees.

Payday Loan Borrowers’ Rights
In some states, payday loan borrowers are entitled to an installment plan at any time prior to default. Borrowers do not have to pay a fee for the installment plan and have from 90 to 180 days (depending on the original loan amount) to repay the loan in a series of installments.

Tribe payday loan lenders often offer various installment plans as well. This policy and the fees are prescribed by the TLE [Tribal Lending Enterprise].

The average payday loan is $392.

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14
Mar

HELP! Ability to Repay Rule by CFPB: Notice of Proposed Rulemaking & Payday Loans

HELP!

There is a CFPB Notice of Proposed Rulemaking [NPRM] expiring May 15th that rescinds the ATR (Ability To Repay) portion of the rule.

YOU SUPPORT THIS NPRM to help your customers, your employees, your family, and your business!

So… stop whatever you’re doing now! Provide comments and engage your customers.

FiSCA (Financial Service Centers of America) has MADE THIS REALLY EASY FOR US!

FISCA created the “We Deserve Credit” campaign to assist in engaging our customers and employees in this important effort.

How Can You Help? Generate comments & petitions! Just like our antagonists do. Remember my EXAMPLES? CLICK HERE

How to start a payday loan business

Payday Loans & the CFPB

The FISCA “We Deserve Credit” Campaign makes it easy.

Comments:
Gather comments & signatures for the petition to support the NPRM.

FiSCA has set up an easy way to do both. Share FISCA’s web portal with customers and employees. Computers, tablets, and smartphones can be set up in your offices for customers to use. Same IP address? Not a problem.
The link for the comment portal is http://www.wedeservecredit.com

Petition:
The link for the petition portal where a customer can just sign the petition and not leave a comment.
http://www.wedeservecredit.com/petition

How you can get the word out? EASY!
FiSCA has resources to help you publicize this campaign. There are links below for promotional materials as well as sample email and text messages.

Poster: FISCA Poster PDF

HandOut: FISCA Handout PDF

Click Here for FISCA sample emails and text messages:

Keep a count of how many emails/text messages you send out. Please keep track of the number of recipients for each email/text message you send out.

More support is on the way from FISCA! They are engaging an outline that company owners, shareholders, etc. will use to write their own letter.

Your customers and employees MUST be alerted. They will suffer the most if you fail to act.

We’re smart! We’ll survive if we fail to take action TODAY! Our customers, our employees, our vendors, our local retailers… may not.

Meanwhile, to start or improve your loan business, Click Here to Begin. Schedule a call or pick up a copy [PDF] of the latest version of our “Bible: How to Loan Money to the Masses Profitably.”

Jer@PaydayLoanIndustryBlog.com 702-208-6736 Starting a loan biz? Buying a loan biz? Need to improve your loan biz? Reach out…

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06
Mar

The Horrible, Inexcusable Truth Behind Payday Loan Lobbyists in D.C.

SHOCKING NEWS! The Washington Post reveals the payday loan industry pays lobbyists to prowl Washington D.C!

The Washington Post points out that consumer lenders in the Fintech, installment, car title and payday loan industry pay lawyers and other insiders to lobby Washington D.C. on behalf of their own interests. Simply astounding!

Next thing you know, it will be revealed that AARP pays lobbyists huge sums of $$ as well to protect Boomers from bureaucrats trying to “prune” their Social Security checks. Oh, wait… AARP did! $8M+

The top 20 Banks in the USA spent $22M lobbying D.C.

Lawyers spent $220M! [To be clear, that’s $220,000,000!] Great white SHARKS!

payday loan lawyer great white

                Lawyer Great White Shark

Planned Parenthood spent $6M!

Credit Unions spent $7.5M!

What about Payday Loan Lenders? Guilty as charged! We spent nearly $2M! Cheapskate, dwarf lantern sharks…

Washington Post Mention-02-25-2019
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18
Feb

The Business of Lending to the Masses: Do You Have a Specific Skill Set for Hire?

Are you an expert in any segment of “the business of lending money to the masses?”
Do you have specific, extraordinary expertise relevant to our industry
  • Collection tools, strategies, alternative data …
  • Customer Acquisition channels/credit risk/Frictionless Onboarding/Originations>Recovery
  • Asset Protection? Tax minimization? R & D tax credit applications…
  • Call center operations, conversion analytics…
  • Tribe relationships
  • Technology implementation
  • Bank relationships
  • Multi-channel payment processing expertise
  • Analytic support/risk modeling/P & L Analysis…
  • Compliance
  • Other…
Our company, Trihouse Consulting, represents direct lenders, investors and industry vendors on the “prowl” for TALENT.  Many of these assignments can be performed remotely. Many are part-time; a few hours/week.
If you possess any of these skill sets – and are extraordinary – reach out. 
You need to hire these skill sets? Reach out as well.
PRIVACY & DISCREETNESS GUARANTEED BY ME!
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15
Feb

1st Tribal Lending

1st Tribal Lending

The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used, both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance.

Because of the unique status of Indian lands being held in Trust, Native American homeownership has historically been an underserved market. Working with an expanding network of private sector and tribal partners, the Section 184 Program endeavors to increase access to capital for Native Americans and provide private funding opportunities for tribal housing agencies with the Section 184 Program.

To help increase Native access to financing, the Office of Loan Guarantee within HUD’s Office of Native American Programs, guarantees the Section 184 home mortgage loans made to Native Borrowers. By… Read More

 

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