Netflix Scott Tucker Dirty Money: Tribe Payday Loans

The Business of Lending Money to the Masses

The Business of Lending Money to the Masses

In October 2017, Scott Tucker was criminally convicted for his billion-dollar payday loan business. On Friday, he was sentenced to 16 years in prison. (Tucker’s attorney, Tim Muir, received 7 years.)

“As a unanimous jury found today, Scott Tucker and Timothy Muir targeted and exploited millions of struggling, everyday Americans by charging them illegally high interest rates on payday loans, as much as 700 percent,” Joon H. Kim, acting Manhattan U.S. Attorney, said in a statement. “Tucker and Muir sought to get away with their crimes by claiming that this $2 billion payday loan business was actually owned and operated by Native American tribes. Scott and his lawyer attempted to portray their Kansas City based AMG services as Native American owned; thereby having sovereign immunity. The jury disagreed.

Tribe payday loan business

Scott Tucker Payday Loan Business – Tribe Lenders

A lawyer for Tucker told said Scott  Tucker intends to appeal. Tucker is also appealing the $1.3 billion fine leveled against him last year by the Federal Trade Commission.

Meanwhile, Tucker is off to prison for 16 years!

The fact is, Scott Tucker’s payday loan business had thousands of returning borrowers! Why? Because they preferred Scott’s online payday loan product to the few options they had for borrowing a few hundred bucks without a hassle.

It’s true that Tucker employed MANY “tricks” and disclosure failures during the course of his customer’s online borrowing transaction. Too bad! Lenders don’t really have to do this. A lender can reveal ALL the costs, terms and transaction details BEFORE the potential borrower actually “signs on the dotted line” and still build a multi-million dollar loan portfolio. Many publicly traded and privately held companies are achieving this as I type here.

Tribal ownership? It appears that Scott Tucker and Timothy Muir accomplished this “after the barn doors were opened!” Their handling of this arrangement appears to have resulted in their mortal death. (They should have consulted with an experienced tribal chairman/manager like Allen Parker at!)

How to start a loan businessRegarding the payday loan product offering itself, the media ALWAYS fails to disclose that there is more to the 700% interest rate they ALWAYS refer to than first meets the eye. This is an annualized interest rate required to be disclosed by the lender to a customer by the FED’s. By now, everyone knows that these loans aren’t meant to be rolled over every 2 weeks for years! They are scheduled to be paid off on the borrower’s next payday. You borrow $300 and payback $345. No big deal IF you have zero options and you want  a fast loan!

Scott Tucker screwed up! But of course, that’s easy for the rest of us to conclude having the benefit of hindsight! Tucker was a maverick; blazing new trails. As he says in the Netflix “Dirty Money,” Episode 2 treatise on his business, “There was no road map.”



Madden v. Midland Funding Fix for Lenders and Debt Buyers: Huge Deal!

THIS IS HUGE! A fix for Madden v. Midland Funding! This has serious implications for all lenders. That includes tribes, online lenders, B & M’s…

This is a portion of a guest post written by Scott Stewart, CEO of the Innovative Lending Platform Association  on LendAcademy operated by Peter Renton; a great blog and an excellent Podcast you should be dialed into! (NOTE: As you read this, realize that consumer debt is impacted as well. For now, it appears to be borrowers in NY, VT and CT with more states coming!)

“Imagine you opened a salon two years ago with a chair for both you and your business partner.  Over the years, you built a small clientele and grew steady revenues.  Your business is profitable, and you want to add two more chairs to your shop.  You estimate that the expansion will cost $20,000 but will yield $40,000 annually in new revenue.

Together, you discuss taking out a small business loan with both large and small banks, but they turn you down citing your 640 personal credit score and the lack of two years of business tax returns as the reason for the decline.  So, you reach out to online lenders in the hopes of securing the capital you need to expand and grow your business. [Continued below…]


How to start a loan businessAfter reviewing your application, an online lender offers your business a $20,000 loan that can be funded in a day and paid back in weekly installments over a six-month period.  The APR seems high – it’s about 40% – but the total cost of capital is only $2,115.  That means you’ll pay $2,115 to borrow $20,000 to fuel your expansion, and that expansion is expected to yield a $40,000 return on your investment.  You and your partner decide to seize the opportunity.

Unfortunately, a recent decision by the Second Circuit Court of Appeals in Madden vs. Midland Funding, is making it difficult for online lenders to offer businesses the funds they need to grow and succeed.  The Madden decision undermined the legal doctrine known as “valid when made,” which has been a cornerstone of banking law for over 100 years.  The principle is simple.  If a loan is legal with respect to its interest rate, then it does not become invalid or unenforceable when sold to another party.  Numerous bi-partisan and non-partisan groups have come out in opposition to the Madden decision, in part because of the dangerous uncertainty it has inserted into the financial markets that are critical to supplying credit to individuals and small businesses.”

Peter Renton also wrote about the impact of Madden v. Midland in an earlier Post on Lend Academy:

There was a long discussion about the impact that this decision has had on borrowers in Second Circuit states: NY, VT and CT. Research has been done by Columbia University and others that show lending is down significantly in the three states and one panelist noted that “no marketplace lending platform is issuing loans in these states to borrowers under a 625 FICO.” If for some reason the Madden decision was to be expanded to all states then lending platform volume could drop as much as 50%.

Recently, the United States Congress passed the “Protecting Consumers’ Access to Credit Act of 2017 (HR 3299), otherwise known as the “Madden Fix” bill.

This bill would restore the “Valid when Made” doctrine meaning that if a loan was valid when it was made it does not become invalid when assigned to another party regardless of state usury laws.

In 2015, a Second Circuit panel in Madden v. Midland Funding, LLC overturned a district court’s holding that the National Bank Act (NBA) preempted state law usury claims against purchasers of debt from national banks. (See Special Alert on Second Circuit decision here.) The appellate court held that state usury laws are not preempted after a national bank has transferred the loan to another party.

It passed the house by a margin of 245 – 171 so it successfully picked up support from Democrats!

Lets hope this bill gets through the Senate in tact.

And, if you want to learn how to start a loan business that focuses on signature loans, car title loans, single-payment loans (payday), line-of-credit lending… start here:

“How to Loan Money to the Masses.”

Jer at


U.S. Bancorp Reveals $608M Scott Tucker Liability

The Business of Lending Money to the Masses

The Business of Lending Money to the Masses

As previously disclosed, the Company U.S. Bancorp is working to resolve matters with regulatory agencies, including the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network, relating to their review of the legacy Bank Secrecy Act/anti-money laundering compliance program of U.S. Bank National Association (“U.S. Bank”).

Resolution of these regulatory matters is expected to include payment of civil money penalties. Also as disclosed, a legacy banking relationship between U.S. Bank and payday lending businesses associated with former customer Scott Tucker (who was convicted of fraud charges on October 13, 2017) has been the subject of an investigation by the U.S. Attorney’s Office in Manhattan.

That investigation also has covered issues related to the adequacy and effectiveness of U.S. Bank’s legacy Bank Secrecy Act/anti-money laundering compliance program. The parties are currently working on a definitive settlement, which the Company currently expects to include a deferred prosecution agreement and payment of a penalty, which the Company expects to finalize soon. Based on the current status of these various matters, the Company has accrued a liability of $608 million, which is reflected in the Company’s financial results for the quarter ended December 31, 2017.

The settlement of these matters is subject to negotiation and completion of final documentation and approval by the Company and the relevant agencies, and therefore the final terms of the settlements may differ from the Company’s current expectations.

In addition, as previously disclosed, the Company remains subject to other ongoing examinations, inquiries and investigations by government agencies and bank regulators, including a review by the Board of Governors of the Federal Reserve System of economic sanctions and related compliance matters, any of which could result in administrative proceedings, monetary fines or other penalties.

U.S. Bancorp disclosed in a January filing with the Securities and Exchange Commission that its dealings with Tucker were the subject of an investigation by the U.S. Attorney’s Office in Manhattan, N.Y. That’s the same U.S. Attorney’s office that brought racketeering charges against Tucker. Scott Tucker was was convicted of those charges Oct. 13.




Indiana Payday Loans and Laws


How to start a loan business

How to start a loan business

Payday loan lenders in Indiana will likely experience increased transaction volume and profitability as a result of Indiana’s move to pass new laws allowing payday loan lenders to charge fees three times the existing rates previously in place.

Basically, Indiana legislators will establish longer-term payday loans for between $605 and $1,500.

Payday loan state law required that loans not exceed interest rates of 72 percent per year. But, by enabling shorter length payday loans for 7-14 days, payday lenders can offer consumers more choices for handling financial emergencies.

This is great news for consumers in Indiana!

Indiana payday loan lenders employ “unsecured consumer installment loans.” APR’s (Annual Percentage Rates) tier up to approx. 222 percent.

Indiana payday loans range from three  to 12 months with loan principals of $605 to $1,500.

As an example,  a 3 month payday loan – installment loan –  having a loan principal of $605 results in the payday loan borrower paying $144 in monthly maintenance fees and $91 in a “nonrefundable original fee.” Total payday loan payback is $840. (Beats asking friends or family for money!)

Bottom line: these Indiana payday loans will provide residents of Indiana more financial choice when facing emergencies.

Licensed Indiana payday loan lenders are barred from charging more than 20 percent of the borrower’s monthly gross income and an Indiana payday loan borrower can have one installment loan at a time.

What do you think about the new business opportunity for entrepreneurs to loan money to the masses in Indiana? Email

Want to start a loan business in Indiana? Learn how here:

How to start a loan company

How to start a loan company


How to Start a Car Title Loan Business: Bill of Sale

How to Start a Car Title Loan Business: visit for more tactics and strategies…

States Requiring Approved Bill of Sale

Many states/provinces require a state-specific bill of sale form. In this case, you must fill out the bill of sale form offered by the motor vehicle agency in your state. The list below lists states that require and provide a specific type of bill of sale form when you buy or sell a vehicle. Note, check YOUR state/province for updates often:

NOTE these links are to a PRIVATELY OWNED WEBSITE. NOT the DMV!

For specific tactics & strategies for starting & successfully operating a title loan business, visit: and


PDL Lender Stock Price up 20% After CFPB Drops Investigation


“Mick Mulvaney’s Consumer Financial Protection Bureau (CFPB) quietly closed an investigation into a payday lender headquartered in Mulvaney’s home state Monday. The company previously donated to the former congressman’s political campaigns.

Payday lender World Acceptance Corporation announced in a press release Monday that it received a letter from the CFPB stating that the financial watchdog had closed its nearly four-year investigation into the company’s marketing and lending practices.

Today, Friday January 26th, WRLD stock is up $19.22 as of now 🙂

Funny how things work!


How to Collect Your Money: Small Dollar Lending

How to start a loan business

How to start a loan business

Small Dollar Loan Collection Tips

Time to start making your collection calls. Yep, it’s a pain. Yep, we hate making these calls. But, you gotta do it DAILY! Every day rain or shine you gotta reach out to your borrowers and get your cash; or at least find out why they haven’t paid you AND when they will.

So… set up a schedule and get on the phone. It’s best to do what you hate the most FIRST; get it over with.



While we’re at it, ALWAYS have a checklist in front of you when you make your collection calls. Whether your calling a borrower about a payday loan, a car title loan, a signature loan… have your list WITH a picture of a really nasty Boss in front of  you. Why a nasty Boss? MOTIVATION to do the work!!

What’s on your COLLECTION CHECKLIST? Among other things:

  • Notes about your previous conversations with your delinquent Borrower. [What did she promise you during your last conversation?]
  • ASK FOR YOUR MONEY! [Make this request simple, easily understood and firm. Common sense, right?]
  • Why isn’t she paying you as promised? [Keep digging until you get the REAL answer! This will help provide you with insight for your next call with her and get you insight as to the likelihood of her paying you next go around. No payment? Slow payment?]
  • Push hard for full payment today – right now – or at least a significant partial payment. [Waive late fees if she pays today? Reduce the loan principal? Get creative!] 
  • Review and summarize THIS COLLECTION CALL with your borrower while she is on the phone. [Confirm everything said. Any promises made by you or your borrower.]
  • Verify her contact information. [Phones, email, Facebook, Twitter, text, employer… In an ideal world you get them all 🙂 
  • Followup your conversation with a text and an email.
  • Enter NOTES about this conversation into your Loan Management Software program. [Have these notes available for your next scheduled call with her!]
  • Finally, do some role playing. [Get on the phone with a fellow payday loan, title loan… employee and PRACTICE these collection calls. Take turns playing the role of a deadbeat small dollar loan borrower  🙂 

Why Consumers Borrow at 100%+ APR’s: Signature & Payday Loan Industry Survey Results

By: Jer and Miro. Payday Loan Industry Survey Results available.

Payday loan entrepreneur, do you want to know who your customer is? Still trying to figure out who uses payday loans, why they use them and what they really want?

A most interesting payday loan survey is now available! It was sponsored by the Government of Alberta, Canada. It reveals some great insight into the wants and needs of the following respondents to the survey:

  • individual consumers and consumer organizations;
  • payday loan businesses;
  • credit counseling agencies;
  • “other stakeholders.”
  • (Our Thoughts: Don’t let the fact that this survey was conducted in Alberta, Canada cause you to dismiss it as having little relevance to your situation. We have access to multiple studies in various locales and the conclusions are very much the same. Micro-lending consumers are similar throughout the world. And micro-lending products, like the payday loan, car title loans, and pawn services will continue to be in great demand as long as consumers can breathe. Government cannot legislate our product out of existence nor will the so-called “consumer protectionists” ever reach into their own pockets to help an anonymous consumer in need!)


The firm hired to perform the survey listed the following conclusions. These HIGHLIGHTS are insightful as there are some surprising conclusions to be drawn from their results.


User Satisfaction with Payday Loan Lenders
The majority of payday loan users are satisfied with their most recent payday loan experience,
including 49% who are very satisfied. Users are highly satisfied with the rates and terms being
explained to them (82%) but their satisfaction with the cost of the payday loan is substantially lower (54%).

(Our Thoughts: Why can’t the so-called consumer protectionists who continually attack the payday loan industry GET THIS THROUGH THEIR THICK SKULLS!)

Motivations for Using Payday Loans
Users cite a range of situations of great need or emergency situations in general, as their reasons for needing payday loans. The most frequently mentioned reason for needing a payday loan is to pay bills or prevent overdue bills (40%).

When asked for top of mind reasons for choosing a payday loan instead of another form of lending, users say it is a last resort (41%). Convenience factors represent other motivators for obtaining payday loans; for example, that it is easy to apply (12%), faster to get the loan (10%) and the location is convenient (6%). However, when asked to rate the importance of a number of specific aspects of payday loans, users rate speed, ability to borrow a small amount, hours of operation, convenient location, and ease of applying for the loan substantially more important (87-92% important ratings) than being the only place they are confident to apply (61%) or not being approved at other places (44%).

(A number of other studies of our industry have consistently pointed out the same thing; IT”S ABOUT CONVENIENCE!)

There is a degree of stigma associated with payday loans, with 25% of users agreeing they would be concerned about being seen at a payday loan store.

A low percentage of users obtain their loans through the Internet (3%). Almost all users obtain their loans from a payday loan store, usually somewhat or very close to their home. Most users (82%) have Internet access, at about the same incidence as the general population (84%). NOTE: In the USA, it’s 35% Internet & 65% storefront lending.

Remember – this is Canada. (OUR THOUGHTS: “Only 3% of payday loan users have used the Internet to get a payday loan and yet 25% of users admit to being concerned about being seen in a payday loan store.” We know from our own operations that 48% of our borrowers apply via our websites!  Canada must be different? This is further evidence that those of us offering payday loans should implement the Internet for our product offerings and, we suspect, strive harder to deliver peace of mind to those payday loan consumers contemplating the use of the Internet to get a loan.)


Users believe that payday loans serve a need because they allow for emergency loans to consumers who cannot obtain alternative financing.
However, users and non-users alike are in favor of regulating the following areas to eliminate unfair or predatory practices:
  1. limit to the allowable cost of borrowing and, to a lesser extent,
  2. making agreements easier to understand,
  3. allowing a “cooling off” period during which the loan can be cancelled without penalty,
  4. allowing the borrower to repay only the principal amount borrowed if the business violates the regulations,
  5. the practice of “discounting,” and
  6. rollover loans.
Payday loan users acknowledged that they are under financial hardship and have poor budgeting skills. They also appeared to have little comprehension about the actual cost of borrowing from payday lenders when all of the rates and fees are converted to an annualized percentage rate.

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Characteristics of Payday Loan Users
The payday loan users participating in the survey demonstrated a higher than average likelihood to be between 25 and 35 years of age (35% vs. 18% of the Alberta general population) and a lower likelihood of being under 25 (6% vs. 14%) or 65 years and over (5% vs. 14%).
Reflecting their ages, 46% of users report having children in their household under 18 years of age, versus 39% in the general population. Users’ annual household incomes are below average, with 37% having incomes between $20,000 and $49,999 per year versus 23% for the general population.
Use of Payday Loans
The study estimates that 3% of Albertans have ever taken a payday loan. Another study provided an estimate of 6% based on a sample size of 900 respondents (+1.6 percentage points, 19 times out of 20).(Thus, the potential for HUGE growth remains for the small dollar loan product.)The vast majority (93%) of non-users rate themselves unlikely to consider a payday loan. Supporting this view, most Albertans would not need a payday loan if they needed $300 in cash, as they tend to have access to funds from their bank accounts, relatives, lines of credit, overdraft protection and cash advances.Non users are more confident than users about being able to obtain the funds they need through their bank account or through a line of credit, while users and non users demonstrate similar levels of confidence about getting the required funds from other sources.Albertans who have had a payday loan before tend to be repeat users (79%), using payday loans an average of four times in the past. However, only 22% anticipate using payday loans again in the future.

Users perceive that they pay their loans off as soon as they are due (80%) and only use payday loans as a last resort (62%). Some users see themselves using payday loans at certain times of year (20%) and 10% use payday loans as part of their regular banking.

Payday loans most frequently involve obtaining between $200 and $499 (52% of users’ most recent loan value), and the amount is almost always under $1,000 (88%).

Payday Loan Agreements
While almost all payday loan users (92%) report having received a copy of their payday loan agreement, only 66% read the loan agreement before signing.

(We would bet the percentage of payday loan consumers who actually read their contract EXCEEDS those home buyers who read their loan new documents!)


Most of the consumers and their advocates said they would prefer, for simplicity’s sake, to see the maximum rate set as a percentage or dollar amount of the loan. One exception is a senior citizens’ association. This association would like to see the government set a limit of $15 per $100 on the first $300 of the loan, $10 per $100 on the next $500 and $7.50 for any amount above that.

Credit counselling agencies are also in favor of a tiered system. “These loan schemes take advantage of those least able to afford it,” says an outreach program for street people. “If indeed the service is required, then it needs to be better controlled – it is a circle whereby one never gets the loan paid off.”

How to start a loan company

How to start a loan company

The Industry
Most payday loan businesses that responded to the public consultation are in favor of a regulated maximum rate.

One payday lender says it opposes interest and fee limits because the current level of competition in the market is healthy and the “normal range” of rates charged in Alberta is consistent with those charged in other provinces. “We believe that a market-based approach to rate-setting is the most effective way of setting rate caps.”

Another industry stakeholder did not say in the discussion paper what rate it would like to see the maximum set at, it charges interest and fees of as high as $41.50 per $100 based on information received by regulators or disclosed in writing on disclosure statements to borrowers. An Edmonton television journalist posing as a first time borrower reported he was charged $52.70 per $100.
[Learn how to make money lending money to the masses! Your inventory? Cash; not flowers that wilt, fruit and vegetables that rot, merchandise that goes out of style… MONEY! Visit for details. Start a Loan Machine! We operate “Boot Camps” as well.]

The stakeholder would like to see the government set a maximum fee as a percentage of the loan, i.e.: $23 per $100 lent. While it does not disclose what rate cap it would like to see set, the $23 figure is consistent with figures it has said publicly that it would like to see charged. Several small payday lenders said they would like to see the maximum set between $30 and $35.

The payday loan business respondents are unanimous in their desire for some form of industry regulation, and almost universally in favor of creating this with federally approved legislation. The sole exception is one payday lender in a small Alberta city that prefers regulation without federally approved legislation.

Comments? Questions? Help? Suggestions?
Learn More at: Payday Loan University

CFPB: Colossal Upheaval Equals Tremendous Uplift in Payday Loan Industry

FLASH: Massive Upheaval at CFPB & the Monumental Future for the Payday Loan Industry

Jer Ayles

Jer Ayles

By: Jer Ayles. You’re aware of the dark cloud hanging over the payday loan industry since 2013

It was a BIG, REPULSIVE, FRIGHTFUL, NASTY cloud; a visible, billowing, dark mass of vapor hanging over the small dollar loan industry. [Think Elizabeth Warren.]

This cloud was given a name.

We know this cloud as “The CFPB” or “EW” for short.

“The Consumer Financial Protection Board.”

Well, guess what dear reader?

This blood sucking, murky, overcast, confused muddle IS GONE!


Rainbows, opportunity, sunshine and smiles all around!

A shindig for money lenders and consumers begins today!

As lenders, we can get back to our business of lending money to the masses enabling our clients to solve their financial challenges; fix their car, buy that refrigerator, get their prescriptions, invest in their school books and generally just get on with living.

President Trump appointed Mick Mulvaney as the new director of the CFPB.

The mission given to Director Mulvaney by President Trump? “TO FIX IT! To protect people without trampling on capitalism.” Without choking off access to financial services. Folks in the lower end of the middle classes…”

Director Mulvaney’s first words? “Regulators must protect people without choking lending. I won’t set the CFPB agency on fire, but it will change.”

Director Mulvaney added, “Anybody who thinks that the Trump administration CFPB will be the same as an Obama administration CFPB is simply being naïve.”

Both Director Mulvaney and President Trump “felt the CFPB under the previous administration had GONE TOO FAR…”

Mick Mulvaney, once called the Consumer Financial Protection Bureau the “worst kind” of government entity, vowed to keep the agency open while making changes that protect people without choking off capitalism.

“Elections have consequences at every agency, and that includes the CFPB,” Mulvaney said.

“Things are going to be different,” Mulvaney said.“I consider the CFPB to be part of the executive branch of government. That means that it is charged with executing the laws.”

All I can say Dear Reader is HALLELUJAH!!!!!!!!!!!!!!!

Here’s a link to Director Mulvaney speaking before reporters: LINK

Recommended Action: Got a question? Idea? Need help? Want to make money lending to the masses? Reach out: or check out our “Resources” page.



CFPB Finally Issues New PDL, Title… Rules

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We appreciate hearing from you. Let us know if you ever have any questions:

SUMMARY: The Bureau of Consumer Financial Protection (Bureau or CFPB) is issuing this final rule to establish 12 CFR 1041, which creates consumer protections for certain consumer credit products, and the official interpretations to the rule.
First, the rule identifies it as an unfair and abusive practice for a lender to make covered short-term or longer-term balloon-payment loans, including payday and vehicle title loans, without reasonably determining that consumers have the ability to repay the loans according to their terms.
The rule exempts certain loans from the underwriting criteria prescribed in the rule if they have specific consumer protections.
Second, for the same set of loans along with certain other high-cost longer-term loans, the rule identifies it as an unfair and abusive practice to make attempts to withdraw payment from consumers’ accounts after two consecutive payment attempts have failed, unless the consumer provides a new and specific authorization to do so.
Finally, the rule prescribes notices to consumers before attempting to withdraw payments from their account, as well as processes and criteria for registration of information systems, for requirements to furnish and obtain information from them, and for compliance programs and record retention.
The rule prohibits 2 evasions and operates as a floor leaving State and local jurisdictions to adopt further regulatory measures (whether a usury limit or other protections) as appropriate to protect consumers.