THE BLOG

28
Jan

Bank Accounts for Payday Loan, Check Cashers and MSB Lenders

Posted by / Trends & Tactics

Great news today for consumers and small dollar lenders regarding bank accounts:

Financial Institution Letter
FIL-5-2015
January 28, 2015

Statement on Providing Banking Services

The FDIC encourages insured depository institutions to serve their communities and recognizes the importance of the services they provide. Individual customers within broader customer categories present varying degrees of risk. Accordingly, the FDIC encourages institutions to take a risk-based approach in assessing individual customer relationships rather than declining to provide banking services to entire categories of customers, without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk. Financial institutions that can properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to any category of customer accounts or individual customer operating in compliance with applicable state and federal law.

The FDIC is aware that some institutions may be hesitant to provide certain types of banking services due to concerns that they will be unable to comply with the associated requirements of the Bank Secrecy Act (BSA). The FDIC and the other federal banking agencies recognize that as a practical matter, it is not possible for a financial institution to detect and report all potentially illicit transactions that flow through an institution.1 Isolated or technical violations, which are limited instances of noncompliance with the BSA that occur within an otherwise adequate system of policies, procedures, and processes, generally do not prompt serious regulatory concern or reflect negatively on management’s supervision or commitment to BSA compliance. When an institution follows existing guidance and establishes and maintains an appropriate risk- based program, the institution will be well-positioned to appropriately manage customer accounts, while generally detecting and deterring illicit financial transactions.

Any FDIC-supervised institution concerned that FDIC personnel are not following the policies laid out in this statement may contact the FDIC’s Office of the Ombudsman (OO) at the following dedicated toll-free number, 1-800-756-8854, or dedicated email address, bankingservicesOO@fdic.gov. Communications with the OO are confidential. The FDIC also has an independent Office of Inspector General (OIG) that is charged with addressing allegations of waste, fraud, and abuse related to the programs and operations of the FDIC. Individuals or institutions may contact the FDIC OIG through its Web site at www.fdicoig.gov by using the “Hotline” button, by phone at 1-800-864-3342, or by email at ighotline@fdic.gov.

Doreen R. Eberley
Director
Division of Risk Management Supervision

Here’s a link to the FIL and the “Letter:” https://www.fdic.gov/news/news/financial/2015/fil15005.html

 

27
Jan

PDL and Car Title Lenders: Tired, Outdated and Destined for the Junk-Heap

Posted by / Trends & Tactics

Man, there’s always something. Guess I could get a job at a nice Subway sandwich shop and get on O’Bama Care. Have a bunch of kids and qualify for an Earned Income Tax Credit of a few grand. Add some food stamps, Section 8 housing, a few cash deals selling cannabis on the side. Hell, I’m allowed 99 plants in Calif according to MyPotGuru.com.

Think I’ll sell some books! A lot easier. “How to Grow Cannabis in Your Closet Tax Free.” Better, “RENT-TO-OWN Cannabis Grow Pots!”

We just completed a 1 month survey of payday loan stores and car title lenders.

Total stores involved 767 in Calif., Nevada, Arizona, and Washington.

Total approved 1st time transactions: 97,409

Consumers who physically visited a store OR emailed/faxed/called and eventually were approved found the lenders via:

  • Signs 55% = 53,575 loans
  • Referred by friend/family: 14% = 13,637 loans
  • Referred by auto mechanic, tire shop, radiator repair…9% = 8,767 loans
  • Online search with an immediate call/text to the store: 19% = 18,508 loans
  • Direct mailer: 3% = 2,922 loans
  • Yellow pages: Ha Ha

So… does your loan management software reveal these stats to you? Are your employees trained to input this data accurately and consistently?

Do you review it and make adjustments monthly?

Do you check your Yelp ratings and respond to input?

Facebook?

You gotta a Twitter guru in your store?

What’s your sign look like? No, I don’t mean are you a Scorpio like me!

Gotta website? How’s it look on your phone? Got a click to call button? A Map button? Ah… you gotta at least have a text button?

Sponsors

 AutomobilePawn.com

 PaydayManual.com 

No? You’re screwed! You’re tired, outdated and destined for the junk-heap. Don’t waste your money on the CFSA convention. Take what meager cash you have left and get a Juicery Franchise. At least you won’t have CFPB headaches coming at you like a freight train!

Oh wait! Probably some kind of health dept. already looking for you. And the firemen inspectors will be paying your juice shop a visit real soon. Don’t want any expired fire extinguishers at $5000 per infraction on the premises.

Need a bank while we’re at it? Forget it. Guns, ammo, payday loan, gaming, porno, multi-lvel marketing are all OUT of banking thanks to operation “Choke Point.” Even the cannabis industry is trying to figure this out.

I got an idea? How about growing cannabis on tribe lands? The FED’s just stated they won’t bother the federally recognized tribes. They’re a sovereign nation! Grow it and deliver to the dispensaries via DRONES! That’s it!! Bet I know a few tribes that would create/pass a marijuana growers economic development board. Issue some licenses… I know a great Northern Calif. grower who would be happy to be their grower Guru: MyPotGuru

Oh, shit! We’re gonna need a bank! Wait! I gotta a tribe owned credit union. Would that work?

OK, where’s all the lawyers and compliance guys when I need them?

Gotta get an app made to hookup with my local budtender… A Hemp Exchange to bring growers and dispensaries together. Form a testing lab to guaranty consistency. Then I’ll need a packaging company to create adult compliant, kid safe, dog safe sealed packaging. Shucks, I’ll probably need the FDA to approve my packaging. And the Bureau of Indian Affairs may want a meeting.

Guess I’ll just eat an edible chocolate night train brownie, analyze my loan management software stats and relax knowing the CFPB is protecting me from myself.

Got an idea? Want to talk? Jer@TrihouseConsulting.com or I’m an advisor at MyPotGuru@MyPotGuru.com

26
Jan

Banks for Payday Loan Companies

Posted by / Banking

Bank for payday loan businessPayday Loan Business Bank Accounts

Banking

Building and maintaining relationships with banks for MSB’s and payday loan companies is challenging to say the least! Banking reform for the payday loan industry is likely on the way. There are only a handful of financial institutions in the country that are openly working with payday loan companies, check cashers and MSB’s.

“There are very smart bankers that have looked at this in different states, and I think before long, the light bulb will come on,” said the head of the banking industry association. “Banks across this country are standing up.”

But until there’s more guidance from the federal government on banking practices and more of a guarantee that financial institutions won’t be subjected to extreme audits by policy setting examiners, many will still remain too cautious to allow payday loan companies to open accounts or get loans he said.

So for now, payday loan companies should seek out small- to medium-sized financial institutions with total assets of between $150 million and $1 billion, as they’re more likely to work with the industry than larger banks.

The head of the banking industry offered several suggestions that could help companies obtain bank services: document everything, and be prepared to alter some of your business practices to satisfy concerns from banks. Specify a company compliance officer. Develop a formal compliance program. Implement employee training and DOCUMENT they completed it. That kind of transparency and flexibility can go a long way toward reassuring bankers that working with payday loan companies is safe, he said.

Need help? Jer@TrihouseConsulting.com

 

19
Jan

Internet Car Title Loans: a Tribe

Posted by / car title loans

Alleged Facts

20. Ms. Bynon is the owner of a 2008 Ford F150 Lariat Supercrew worth over $20,000. Exhibit P-7.

21. The vehicle was titled, registered, and licensed in Pennsylvania.

22. Ms. Bynon keeps the vehicle at her personal residence in Pennsylvania.

23. In 2013, Sovereign operated a web site under the fictitious name Title Loan America, from which it made title loans to residents of Pennsylvania at triple digit interest rates. Exhibit P-6.

24. During the month of March, 2013, Sovereign purports to have lent Ms. Bynon $2,500 at or about an annual interest rate of 180%.

25. Ms. Bynon entered into the loan transaction from a her computer at her home within the Commonwealth of Pennsylvania.

26. The car title loan was supposedly memorialized by a written contract, but Sovereign did Continue Reading..

16
Jan

Scott Tucker, AMG Payday Loan Law Suit Update

Posted by / Uncategorized

From the FTC:

AMG and MNE were defendants in an action against more than a dozen companies and corporate officers, alleging they violated the FTC Act, the Truth in Lending Act, and the Electronic Fund Transfer Act. MNE lent to consumers under the trade names Ameriloan, United Cash Loans, US Fast Cash, Advantage Cash Services, and Star Cash Processing. AMG serviced the loans.

According to the complaint, the defendants misrepresented how much loans would cost consumers and charged them undisclosed and inflated fees. Here just one example: The defendants’ contract said a $300 loan would cost consumers $390.  But what did people really have to shell out to repay the loan?  $975.

To settle the case, AMG and MNE will pay $21 million and will waive another $285 million in… Read More Here.

PDF: 500+ Pages $150.00

How to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!

How to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!

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