Attention all Lenders. Jer here. An extraordinary operations executive reached out to me today. He’s on the hunt for his next assignment. It’s my pleasure to provide those of you in need of serious help navigating 2022 to explore how he can enable you to launch/improve your lending operations, book of business, transition to online lending, substantially improve your ROI & IRR… Here he is:
I enable my B2C lender clients to create high-performing, user-friendly lending systems and platforms with a focus on digital lending and multi-channel delivery via both State & Tribal lending models.
I have nearly 10 years of successful experience building tribal & state-licensed online lending models as CEO, COO:
Attention all Subprime Small Dollar Lenders! Did you miss this?
The national <36% APR theme is gaining ground. You’re a “lender to the Masses?” Read this, digest it, assemble your team, plan to survive & prosper.
How will you deal with these issues?
High cost of capital
Legacy storefront lease payments
Outdated loan management platforms
Transition to online digital channels
Increasing [CAC] Customer Acquisition Costs
Competition – Sovereign Nation Tribal lenders, Pawn, BNPL [Buy Now Pay Later], Early access to wages, Dave.com platforms…
Acquiring, underwriting, funding, payment processing, customer service… via smartphone form factors.
Gaining awareness and introductions to the latest, most technologically advanced platforms, systems, and vendors delivering state-of-the-art solutions including [IBV] instant bank verification, [IWV] instant wage verification, and AI-powered debt negotiation platforms enabling your borrowers in default to literally “negotiate” with an artificially empowered engine thus reducing your collections department headcount while avoiding the customary strategy of selling your 60+ day bad debt for $.04/dollar.
Do you have a clue as to what organizations are continuously pushing for legislation that places a 36% cap on APR rates? Surely you don’t think this is to “protect” consumers from themselves! They ALL have agendas and it’s certainly NOT helping the masses extricate themselves from perpetual debt and serfdom!
Comprehending the revolutionary impact of DEFI on financial services and navigating implementation. ACH rails, funding, remittance… is already experiencing upheaval.
The masses will ALWAYS live paycheck to paycheck. Will you evolve and remain able to serve them profitably and fairly given the risks associated with serving the subprime? Are you aware that the “prime” consumer today will become the “subprime” consumer tomorrow? Or, will you abandon the business of lending to the masses and open a yogurt shop?
Read the following Press release! Know that my Team is a B2C Lender, investor, consultancy, conduit, Native American Tribal specialist, networker, and in daily conversations with the savviest executives, operators, and vendors in what I call, “The Business of Lending to the Masses.”
THIS NATIONAL THEME FOR A <36% APR CAP IS CRITICAL!
IT WILL NOT GO AWAY!!
November 17, 2021: Representatives García and Grothman Introduce Veterans and Consumers Fair Credit Act to Protect Consumers from Predatory Lending Practices. “
“WASHINGTON, DC – Earlier this week, Congressman Jesús “Chuy” García (IL-04), a member of the Financial Services Committee, and Congressman Glenn Grothman (WI-06) introduced the Veterans and Consumers Fair Credit Act, to extend small-dollar “payday” and car-title 36% rate cap protections established under the Military Lending Act (MLA) to all consumers, including veterans and their families. This bill will better protect consumers, particularly military personnel, from certain predatory lending practices.”
“A Senate companion bill was introduced earlier this year by Senators Jack Reed (D-RI), Sherrod Brown (D-OH), Jeff Merkley (D-OR), and Chris Van Hollen (D-MD). Representatives García and Grothman both testified before the Senate Banking Committee in support of the bill.”
“Predatory loans trap working-class people like the ones I represent in Chicago in an endless cycle of debt and jeopardize our economic recovery. It’s up to Congress to ensure that families aren’t stuck with unpayable interest rates on loans for a utility bill or baby stroller,” said Congressman Jesús “Chuy” García. “This bipartisan bill expands the time-tested protections of the Military Lending Act to veterans, military families, and other consumers. Congress should act with haste to advance it to protect families from this unpayable debt.”
“Usury has been condemned since Biblical times. Historically, the United States has had usury laws, putting a guard rail up for borrowers. As more and more loans are given online, it becomes more difficult for states to deal with the problem of snowballing debt. The Veterans and Consumers Fair Credit Act is a great starting point to address the influx of foul play by payday lenders who seize on vulnerable borrowers. We already protect military service members under the Military Lending Act, which means that we have recognized the predatory nature of high-interest loans to our men and women in uniform. This raises the question – if it is wrong to allow predatory lenders to target our service members, why is it right to let them target the rest of the community?” Said Congressman Glenn Grothman.”
“This important legislation is critical as consumers across the country try to recover from the financial ruin caused by the COVID-19 pandemic,” said Rachel Gittleman, Financial Services Outreach Manager with the Consumer Federation of America. “We thank Congressmen García and Grothman for stepping up to protect consumers from predatory, high-cost lenders that thrive on the unaffordable debt trap created by the borrower’s inability to repay. This legislation will protect consumers of color, veteran, low-income, rural, and older consumers, who have been targeted by high-cost lenders who see their historic financial exclusion as a ticket to exploitation.”
“The bill was introduced with 15 original cosponsors: Representatives Earl Blumenauer (OR-03), Suzanne Bonamici (OR-01), André Carson (IN-07), Danny K. Davis (IL-07), Sylvia Garcia (TX-29), Sheila Jackson Lee (TX-18), Raja Krishnamoorthi (IL-08), Ted Lieu (CA-33), Alan Lowenthal (CA-47), Carolyn B. Maloney (NY-12), Eleanor Holmes Norton (DC-00), Donald M. Payne, Jr. (NJ-10), Mark Pocan (WI-02), Rashida Tlaib (MI-13), and Bonnie Watson Coleman (NJ-12).”
“This bill is endorsed by organizations including the National Consumer Law Center (on behalf of its low-income clients), Center for Responsible Lending, Consumer Federation of America, Woodstock Institute, Americans for Financial Reform, The Leadership Conference on Civil and Human Rights, League of United Latin American Citizens (LULAC), NAACP, the Main Street Alliance, Jesuit Social Research Institute, Center for Public Justice, Ethics & Religious Liberty Commission of the Southern Baptist Convention, Faith in Action, National Baptist Convention USA, United Church of Christ, Justice and Local Church Ministries, Cooperative Baptist Fellowship, and more.”
57.2% of working Americans are in occupations where the median pay is greater than the living wage for families with two working adults and a child. This percentage jumps to 65.3% for one adult living alone, but plummets to 21.7% for one adult with a child.
The District of Columbia offers the best chance for two working adults with a child to earn a livable wage. In D.C., 75.4% of workers are in occupations that pay more, on average, than the local livable wage of $20.69 per working adult. North Dakota (71.0%) and Alaska (70.9%) are second and third, respectively.
In four states, less than 50% of workers are in living wage occupations suitable for two working adults and a child. In California, 46.9% of workers are in professions that pay more than the local livable wage of $21.76 per working adult — worst across the U.S. Arkansas (47.6%), Hawaii (48.4%) and Louisiana (49.7%) join California as the others below 50%.
Even in the most uncomplicated household structures — one adult living alone — between 20.1% and 49.1% of people aren’tin occupations where most workers make above the living wage, depending on the state. In North Dakota, 79.9% of people work in professions that pay more than the livable wage of $13.08 for single adults, versus 50.9% in Hawaii at a livable wage of $19.43.
What’s this mean? OPPORTUNITY! Done right, lending $$ to the masses is doing the right thing for them, for you, for your employees, for your community.
Know that each of the massive, publicly-traded lenders [think Enova, Curo, Elevate, World Acceptance…] only have a maximum of 3% of our industry. And a few are currently lending to subprime consumers at $300,000,000 per quarter! Unthinkable!!
Lenders, where do you get solid, accurate information about your industry? Workshops conducted by lawyers, who want you to put them on retainer? Talking to your buddies over scotch after the Conference workshops conclude. Oh, I know. You seek the counsel of vendors who have never loaned a nickel of their own money but are willing to share what they perceive to be the “secret” metrics, techniques, and strategies for lending YOUR hard-earned dollars to the Masses by paying for THEIR 3rd-party solutions!
So you ask, what’s different about YOU, Jer? Don’t you have your hand in my pocket as well? Jer, have you ever loaned a nickel of YOUR money via the Internet to some down-and-out consumer who lacks the funds to keep on the lights? Pay for a kid’s prescription? Fix a broken-down car needed to keep a job?
My response? YES, YES, and YES! I opened my first payday loan store in Garden Grove, California in late 1997. Day-by-day I worked and sweated to build 15 locations. [If you’re reading this and want to hear about loaning money to phone sex call workers, reach out. There happened to be a call center in my payday loan store building.] Then, I discovered the Internet! Then, the SMARTPHONE! Today, crypto, the lightning network, Defi… all are destined to upend the business of lending to the masses. [But, that’s another conversation.] The rest… is history. Equity in multiple stores, equity in both state-licensed and Native American Tribal [Federally recognized, sovereign Nation] portfolios, consulting gigs with VC’s, hedge funds, tribes, mom & pops, private investors, family offices, seed round participation in infrastructure platforms focused on “lending to the masses,” Board and Advisory positions, Fintech startups… I live and breathe this industry! It’s the “juice” that drives me. [I’m no golfer! Retirees RUST!]
My Point? Tap into relationships with those who have “walked the walk!” Enova fits this mantra! So, read and learn.
Background: Enova International[ENVA] is a publicly-traded company in “The Business of Lending to the Masses.” Translated, that’s SUBPRIME LENDING! Founded by @AlGoldstein in 2004 as @CashNetUSA [The Check Giant LLC], acquired by CashAmerica in 2006 for $35M in cash, spun off as Enova and taken public in 2014. 16 years in the subprime lending space. Served 7M customers. Originated $27B in loan originations! Focused on the USA & Brazil to a lesser extent.
Fact: There is no large player in the subprime or near subprime space! Fragmented! Meaning? There still remains a SUBSTANTIAL opportunity for de novo entrants and seasoned lenders to achieve significant success in lending $$$ to the Masses!
3rd Quarter performance In a Nutshell
Enova’s stock price has increased 50% over the past 12 months! Chargeoffs dropped down to 4.2%. Loan originations scaled 26% to $856,000,000; six times higher than last year’s 3rd Quarter! This is the second consecutive quarter Enova has produced sequential growth above 25%. They accomplished this during COVID-19! They only have 3% of a VERY FRAGMENTED MARKET!
“Originations from new customers increased to a record 43% of total originations, up from 39% in Q2 of 2021 and well above 11% in Q3 of 2020.”
Single-payment loan products now make up a mere 2% of Enova’s loan portfolio! [Thus my @JerAyles constant emphasis on offering installment, line-of-credit, car title… loan products when consulting with my clients and portfolio managers! Simply TOO MUCH BAGGAGE attached to “payday loans.”]
Of note on the Enova conference call:
“Yeah. I think you said it right, David. It’s kind of a resounding no. I mean, there is a lot of noise. But I mean, there’s no large player in the subprime credit card space. There are some small options out there, but they’re always have been and it’s mostly kind of high near-prime borrowers, not deep subprime borrowers, and that, obviously, a lot of talk of buy now, pay later. But that’s almost exclusively prime and super-prime. There’s really no big player that’s really done any kind of volume in the subprime or near-prime space where we focus most of our efforts.”
“And I think that’s always been one of the things that have differentiated us instead of supporters are kind of conviction on that subprime and your prep space, where there has been less competition and continues to be less competition.”
For a complete transcription of Enova’s 3rd Quarter earnings report, click the Enova link above. Additionally, there is always interesting analysis about Enova found on SeekingAlpha.com
Survey Says: 40% of Americans Have Less Than $300 in Savings
Ok, so this is crazy! After all the FED stipend, checks-in-the-mail programs, the unemployment addons, on both a State and Federal level, rent and eviction moratoriums… U.S.households still don’t have two nickels to rub together!
SCARY! What’s the US economy look like? What will be the impact on small-dollar lenders? Sure, demand for payday loans, car title loans, installment loans, line-of-credit loans, Buy-Now-Pay-Later plans… will skyrocket. So will “first-time-payment-defaults [FPD].
Those of us who are “Lenders to the Masses” best keep our heads up!
According to a recent GOBankingRates survey, 40 percent of Americans have less than $300 in savings, reflecting the effects of the COVID-19 pandemic on Americans’ financial health. This data is significantly less than the $400 figure that the Federal Reserve uses to measure households’ financial well-being. In the most recent Federal Reserve Report on the Economic Well-Being of U.S. Households, released in May 2021 and covering 2020, only 64 percent of Americans could cover a $400 emergency expense completely using cash or its equivalent. This means that 36 percent would need access to credit to meet unforeseen needs.
“We find that people’s financial savings can serve as a kind of litmus test for their financial well-being in general,” said Andrew Murray, content data researcher at GOBankingRates. “The 50-30-20 budgeting rule suggests people save 20 percent of their income, so when people don’t have any savings or have to withdraw from it unexpectedly, it’s a good indicator that they are struggling financially.”