Tag: sovereign nation


Minnesota AG Attacks CashCall and Rent-a-Tribe Payday Loan Model

The Minnesota AG accuses CashCall and its subsidiaries, WS Funding and WS Financial, of operating while unlicensed, charging illegally high interest rates and unjust enrichment. The AG  also accuses them of fraudulently claiming loans are immune to Minnesota usury laws because Western Sky Financial –  the entity actually making these loans to Minnesota residents – is subject to tribal sovereign immunity because Western Sky  is owned by an America Indian tribe member (Butch Webb). The loans are  sold to CashCall and its subsidiaries.

For loans less than $350, Minnesota law caps the fees that may be charged on a sliding scale as follows: $5.50 for loans up to $50; 10 percent of the loan amount plus a $5 fee on loans between $50 and $100; 7 percent of the loan amount (minimum of $10) plus a $5 fee on loans between $100 and $250; and 6 percent of the loan amount (minimum of $17.50) plus a $5 fee on loans between $250 and $350.

Per legal counsel for CashCall, highly respected attorney Claudia Callaway, “While it would be inappropriate to comment on pending litigation, we look forward to correcting the record in this matter.”

Tribe owned eCommerce businesses have  evolved significantly in just the past 24 months.  Sophisticated collaborations between experts in sovereign nation law, capital formation and lending operators have blossomed. However, state attorneys general and the majority of the media, are still straining to comprehend the “tribe lending model” and continue to refer to all tribal owned Internet lenders as “rent-a-tribes.”  If you repeat a “theme” frequently enough, people will eventually believe it.

For more insight and analysis of the “tribe model,” visit:
1) Tribe Payday Loan Sovereign Nation Model

2) Minnesota AG Attacks Cash-Call Article


Tribe Owned Businesses in Downtown USA?

So… U.S. Sen. Chuck Schumer, D-N.Y., wrote a letter January 28, 2013 to The Federal Bureau of Indian Affairs asking the agency to reject the Seneca-Cayuga Tribe of Oklahoma’s land-into-trust application. The Oklahoma-based tribe bought 229 acres of vacant land in Cayuga County, NY for $738,554 in 2002. The Bureau rejected their plans for a casino in 2006 and 2008. The agency said, “the tribe had not demonstrated the casino plan would provide an economic benefit to the tribe’s members in Oklahoma.” Strange…

What’s the implication for other tribally owned businesses? What if this “geographically remote,” federally recognized  tribe were to build a call center in downtown NY coupled with a technology center to offer small dollar loans exceeding New York’s usury rates? Certainly this enterprise would employ both tribe and local residents thus benefiting both parties economically. How will local tax payers, officials and state attorney’s general respond as this scenario is repeated in cities throughout the USA?

According to Glenn Coin | gcoin@syracuse.com , if the trust application is approved this time, the land will be taken off the tax rolls, costing local taxing entities approximately $9,541 in revenues, based on 2012 real property records. What about the jobs that would be created for employees of the call center and all the construction and materials employment resulting from this construction? Any thought given to the impact on local businesses from restaurants to equipment suppliers?

Read more here and here.


A Tribal Perspective on the Payday Loan Industry

SaveTheTribe.org offers some compelling commentary regarding why the payday loan tribal (Sovereign Nation ) model is under attack.  Here’s a portion of the Post at their Blog:

“There are over 22,000 payday loan stores in the United States. Regardless of protests from consumer advocates this is clearly a product with high demand. The majority of those stores are operated by a handful of large publicly-traded companies. Those companies are facing competition from online lenders and they are trying to use the political system to protect them. The short-term consumer lending industry is highly regulated. Each state has its own regulations and they vary widely. Loan amounts, terms and rates are different in almost every state. Anyone who can make loans throughout the country following a single set of loan terms can be a very efficient and effective competitor. Tribal lending corporations are that competitor and the Community Financial Services Association of America (CFSA) wants the federal and state governments to ban them from the business.”

Read the entire Article here: http://mynafcc.org/who-is-attacking-tribal-lending/

Thoughts? Comment! Tweet! Like! Get involved!




Payday Loans, Tribes, Sovereign Nation and Internet Gambling

Washington D.C. and Nevada will soon be offering Internet gambling. More states are certain to follow if only because state tax coffers are running empty. The FED’s next moves aren’t clear. The DOJ just reversed its interpretation of the 1961Wire Act. Meanwhile, more payday loan Lenders are “partnering” with tribes. The legal “templates” for tribal payday loan “partnerships”  are becoming almost robotic. Since the Tribal Business Expo last March in Las Vegas at the Hilton, we’ve helped initiate more than nine tribal agreements.

So, why all the interest by tribes and payday loan management companies to enter into these relationships? Here are just a few:

  • Many federally recognized tribes are poor. Not all tribes are able to participate in energy, gaming…
  • In spite of what payday loan critics say, the industry is highly regulated. Roughly 17 states simply ban payday loans.
  • Consumers by the millions want and need access to small, short-term, non-collateralizedloans. There are payday loan companies exceeding $120M per month in loans!
  • The Internet offers efficiency, speed, and access to payday loan customers
  • Fixed costs foe Internet payday loan Lenders is less than that for “brick-n-mortars.”
  • Tribe gaming revenues are down as much as 30% because of the poor economy
  • The “payout” expectations of tribes by payday loan Lenders has fallen because of competition for payday loan management teams that can bring expertise and capital sources to the tribe.
  • The cost of state-by-state compliance by payday loan Lenders is rising.
  • Sophisticated “money” is sniffing around the industry. They’re looking for significant returns and they are high-risk players.
  • Creative approaches for offering payday loan type products, such as the offshore model, are becoming harder to “digest.” Continued access to the ACH system and sub-prime consumer data are just two issues that could become a problem for the “exotics.”

Bottom line, the AFS  (Alternative Financial Services) space is quite simply ROARING with opportunity, challenges, technology, capital, DISRUPTION…

I’ve been in this game since 1997 and I’ve never been so EXCITED!

Jer@PaydayLoanIndustryBlog.com 702-208-6736




#1 Challenge for Payday Loan and Car Title Loan Lenders

We took a 30 second survey asking payday loan and car-title lenders what their biggest problems are. We’ve received over 1000 responses and continue to receive more daily.

(By the way, this is an ongoing “30 Second Quick and Dirty PDL Survey” you can access here: http://goo.gl/iDX6T This is the link to the Survey Page using the Google Shortener Tool.! If you take it, we’ll share our results with you! Experience of our respondents to this Survey varies from zero to 20+ years. The average is 3.3 years)

Before we reveal the #1 challenge revealed by 1000+ payday loan and car title loan business professionals, here’s a brief rundown of the other top responses to our quick and dirty survey in no particular order:

  • Collection tactics and underwriting and tools
  • Hiring and keeping good employees
  • New products and services that can be added
  • How to generate/buy/sell  Internet leads
  • Access to capital to grow your business
  • Adapting to Government and legislation
  • How to harness the Internet to increase revenues and collections
  • Payday loan and car title loan software selection and issues
  • Finding good locations and accessing their potential for success
  • Developing and maintaining a good quality industry image
  • Developing new business models in addition to the State Law Model, the Choice-of-Law-Model, the Sovereign Nation Model, the Offshore Model, the Peer-to-Peer Model, Installment loan products…
  • Training in all aspects
  • Legal questions about laws, organizing the business, Internet licensing
  • And a hell of a lot more…

So… drum roll please… The #1 challenge  revealed by our readers for help and insight?

“Getting more customers.”

Alright, let’s tackle this issue.  First things first – DEMAND is UP! Yep, hopefully that doesn’t surprise you!

I talk to entrepreneurs in the payday loan industry, car title loan industry and many related  AFS businesses (Alternative Financial Services) everyday. These business people call and email me from everywhere … from the USA, Canada, the UK, Australia, Korea, Africa, Mexico, New Zealand… and DEMAND is up. Customers want and desperately need our product; short-term, no-hassle quick access to small loans.

Sure, our demographics are changing! Potential customers with multiple credit cards and higher incomes  – customers who previously wouldn’t consider us for temporary financial help – are now considering us and actually using us. And many of our past customers are unemployed! Las Vegas has a 15% “official” unemployment rate! The “official” rate in California is 14%; we know among our customers it’s higher! So demand isn’t down it’s just that our customer is changing.

The problem is we’re all going after the same customer in the same ways while our customer has changed. These potential customers listen to different radio stations, watch different TV stations, read different web sites and blogs, drive different cars, read different magazines and newspapers, use Facebook, Twitter and Google … And these customers are applying for our products and services in multiple ways! It’s not uncommon for them to make a phone call, visit a store and apply via a web site! Our customers have “MOVED.”

These customers are more sophisticated. They have better educations with higher expectations. They are more aware of their options and require more attention.

I can’t use this Newsletter issue to discuss every method available for you to get more customers. It’s a HUGE subject and I’ll discuss more in coming issues.  So let’s begin here with one thing you can do to make an immediate impact on your revenues; it’s simple BUT not the easiest tactic to implement.

It’s called HOSPITALITY!

Yeah, that’s correct – HOSPITALITY.

So… what do I mean by HOSPITALITY? Well, as Danny Meyer states so eloquently in his book Setting the Table, The difference between SERVICE and HOSPITALITY is the foundation of success. SERVICE is the technical delivery of a product. HOSPITALITY is how the delivery of that product or service makes its recipient FEEL. SERVICE is a monologue – we decide how we want to do things and set our own standards for service. HOSPITALITY, on the other hand, is a dialogue. To be on a guest’s side requires listening to that person with every sense, and following up with a thoughtful, gracious, appropriate response. It takes both great service and hospitality to rise to the top.”

On a superficial level, “Setting the Table” is a book about starting and running retaurants; some of the best restaurants in the world. But on a higher level, it’s about business and customer service. I highly recommend it to you!

There’s a story that a business man opened a new store in Florida. On the day the business opened, the business owner received a surprise phone call from Gov. Jeb Bush. Gov. Bush thanked the business owner for doing business in Florida and offered this business man a “special phone number” should he ever need anything. Imagine the impact with your new customers if your company used this tactic. And imagine the fantastic feedback and insight you can receive from your customers.

“Hello Mr. Jones. This is Jerry Ayles at San Diego Financial Service Centers. May I take a few seconds to thank you for visiting our store/web site this week.” THEN SHUT UP! Listen! Allow your customer TO BE HEARD! People love for you to show a genuine interest in them. There is no stronger method of developing a relationship with another human being than to display a true interest in THEM and allow them to share their experiences, their stories, and their lives with you.

OK! I know what’s going on in your head right now! You’re thinking, “Is Jer nuts? Does Jer really think I have time for this?”

My answer to you is, “Can you afford NOT to do this?” Time and time again, I’ve written about the life-time value of your customer. Let’s review this quickly here again. Say… 4 loans per year… $300 per loan… $45 in fees per $300 loan = $180/year in fees X 10 years = $1800 total life-time revenue per customer. And these are conservative numbers! Substitute your own fees and average loan amount and the number of years this customer will stick with you.

Isn’t it worth 2 minutes of your time (or the time of a well trained member of your staff) to implement this?

How can you afford NOT to do this? How can you afford NOT to gain unbelievable insight into what’s going on in your customer’s head? How can you miss an opportunity to gain another apostle for your business? How can you fail to ask them for referrals of their family and friends? How can you afford to fail at this simple strategy?

Final thoughts: When you’re fortunate enough to entice a new customer to give you a try you’d better hit a home run with them on their first experience with you. Again, as Danny Meyer’s writes, “Your goal MUST BE to earn, regular, repeat patronage from a large number of consumers.” AND don’t think I mean putting them on a path to the so-called “cycle of debt.” I simply mean earning their trust and respect as they become acquainted with, and actually use, a variety of the products and services you offer in your financial service center.

Now another thing YOU MUST DO! Get your customers email addresses, Facebook accounts, twitter accounts… Ah!!!!!!!!! This thing is too LONG ALREADY. Next time…

As others have said, “Excellence is a journey, not a destination.”

Meanwhile, WHAT DO YOU THINK? Comments, suggestions, your ramblings are DEMANDED ?