THE BLOG

15
Jul

Payday Loan Stores vs Internet Lending

Lending Money: Brick-n-Mortars are NOT Dead

By: Jer Ayles at Trihouse Consulting

35 million U.S. households cannot wait 3-5 days for money to be transferred into their bank account – if they’re lucky enough to have a bank account! So, brick-n-mortars are NOT going away; at least not today. Here’s why…

According to the FDIC and every Tom, Dick & Harry, 50% of U.S. residents have a credit score of 680 or less.  That means no credit! No borrowing. No loans.

This group includes 9,000,000+ households who do not have a bank account; 7% of the population.

An additional 20% percent of U.S. households (24.5 million) are underbanked; meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system. That’s payday loans, car title loans, pawn, rent-to-own, etc.

What do these all these statistics mean? 34,000,000 households cannot borrow a nickel to fix the car, pay for a prescription, turn on the water, gas, electricity, cell phone, internet, cable serviceJ, avoid an NSF…

If you’re reading this, it’s likely YOU cannot fathom finding yourself in this situation!

But I can promise you, as the owner of several payday loan and car title loan stores/internet properties, and a very busy consultant for the “business of lending money” industry, THIS IS THE CASE FOR MILLIONS OF CONSUMERS WORLDWIDE!

Imagine; 24 MILLION households unable to get their hands on $400 in an emergency.

So, for those of us who are tech savvy and have access to a multitude of options for credit and cash, it’s impossible to “put ourselves in others’ shoes.”

On the other hand, for those of us seeking “enlightenment,”  simply pay a visit to your local payday loan store for a couple of hours and see the light!

You think payday loans are a rip-off?  I know you do! I used to also. But, consider this:

 

Surprised? That’s right! A typical bank or credit union NSF fee has a 1400%+ APR.

Check out the reconnection fees for utilities. And credit card late fees? FUHGEDDABOUTIT!

Here’s the crazy part: The banks have zero risk and yet they get away with $35 NSF fees. No risk, you ask? Correct. The banks and credit unions are at the front of the line when a customer gets paid. The bank takes their cut before paying any other consumer transactions. What? The consumer lost their job and zero bucks are going into their bank account? No problem for the bank. They simply place their customer in Chexsystems and wait. Their “bad” customer will NEVER get a bank account again UNTIL the bank gets paid.

Credit unions have an even better deal. They are considered NON PROFITS! They do not pay taxes like the rest of us. But, they still get away with $35 NSF fees.

The big problem for these 35M households is the fact they can rarely wait for their emergency money to “hit” their bank account via the various payment/money transfer rails available today. Sure, Fintech companies and old school payday lenders are slowly changing this situation.

But, the PREFERRED method for the “underbanked” to solve their cash crunch is to walk into a brick-n-mortar small dollar lender and walk out with CASH ten minutes later!

END OF STORY. [Send comments and questions to: TrihouseConsulting@Gmail.com ] 702-208-6736

29
Jun

Resources for Payday Loan, Title Loan & Installment Balance Sheet Lenders

We’ve made several additions to our trusted repository of resources for payday, title and installment lenders. These include banks, 3rd party lenders, debt traders, lawyers, ACH, loan management software, mobile website designers, bonds, SEO, call centers…

Here’s the link to the page. All contact info and websites are included:
Installment – Payday – Title – Loan – Lender – Resources

Best!
Jer – Trihouse
702-208-6736 Call or Text

08
Jun

Wolf of Wall Street Fires Up PDL Employees

WOW!

Your payday loan Team need a little INSPIRATION?

THIS IS IT!

“So, you listen to me and you listen well. Are you behind, on your credit card bills? Good. Pick up the phone and start dialing. Is your landlord ready to evict you? Good. Pick up the phone and start dialing. Does your girlfriend think you’re a fucking loser? Good. Pick up the phone and start dialing! I want you to deal with your problems, by becoming rich! All you have to do today …is pick up that phone, and speak the words that I have taught you. And I’ll make you richer than the most powerful CEO of the United States of fucking America.”

WARNING: For those of you who cringe at anything politically incorrect, DO NOT WATCH “The Wolf” work the phones!

Gather your Team around a computer monitor for 90 seconds and immerse yourselves in a TRUE ADRENALINE RUSH the likes of which your more timid souls have NEVER BEFORE EXPERIENCED!

NO B.S.

Watch & listen as the “Wolf of Wall Street” works the phones.

GUARANTEED, YOU & your TEAM will achieve a MASSIVE 10X+ increase in ROI today.

PS: A HUGE thankyou to Robert Wheeler at TOFSC for bringing this to our attention!

See those little black boxes? They are called telephones.

I’m gonna let you in on a little secret about these telephones.

They’re not gonna dial themselves! Okay? Without you they’re just worthless hunk of plastic. Like a loaded M16 without a trained Marine to pull the trigger. And in the case of the telephone, it’s up to each and every one of you, my highly trained Strattonites, my killers.

My killers who will not take no for an answer! My fucking warriors who’ll not hang up the phone, until their client either buys or fucking dies!

Let me tell you something. There is no nobility in poverty. I’ve been a rich man, and I’ve been poor man. And I choose rich every fucking time. Cause, At least as a rich man, when I have to face my problems, I show up in the back of a limo wearing a $2000 suit …and $40,000 gold fuckin’ watch!

Now, if anyone here thinks I’m superficial or materialistic. Go get a job at fucking McDonald’s, because that’s where you fucking belong!

But, before you depart this room full of winners, I want you to take a good look at the person next to you, go on. Because sometime in the not-so-distant future, you’re pullin’ up to a red light in your beat-up old fucking Pinto, and that person’s gonna pull up right alongside you in a brand new Porsche, with their beautiful wife by his side, whose got big voluptuous tits. And who will you be next to? Some disgusting wilder beast with three days of razor-stubble in a sleeveless moo-moo, crammed in next to you with a carload full of groceries from the fucking Price Club! That’s who you’re gonna be sitting next to.

So, you listen to me and you listen well. Are you behind, on your credit card bills? Good. Pick up the phone and start dialing. Is your landlord ready to evict you? Good. Pick up the phone and start dialing. Does your girlfriend think you’re a fucking loser? Good. Pick up the phone and start dialing! I want you to deal with your problems, by becoming rich! All you have to do today …is pick up that phone, and speak the words that I have taught you. And I’ll make you richer than the most powerful CEO of the United States of fucking America.

I want you to go out there, and I want you to RAM Steve Madden stock down your clients’ throats. Till they fucking choke on it till they choke on it and buy 10,000 shares! That’s what I want you to do. You’ll be ferocious! You’ll be relentless! You’ll be telephone fucking terrorists! Now, let’s knock this Motherfucker out of the park!

I listen to this everyday before I sell. I ignore no soliciting signs, kick dogs that try to bite me, and shout out my sales pitch before they tell me “not interested” that would put Billy Mays to shame. I MAKE them interested. Everyone is either a buyer, or a chump who isn’t qualified to buy. I don’t go home until I sell, I’d rather piss off a hundred people than not pay my bills.

05
Jun

Payday Loan Advertising after the Google Ban

Payday Loan Advertising after the Google Ban

After Google, Bing and Facebook banned Payday Loan companies from advertising their products, direct acquisition of new loan borrowers has gotten more difficult. The move is especially troublesome for those companies with small marketing budgets, as the market leaders have built brands that enable them to continue funneling in new payday loan, installment & title borrowers without aggressive acquisition focused advertising.

The primary strategy for payday loan, installment, title and line-of-credit lenders is to build their own brand. Building a compelling marketing proposition with the creative to match, and spending considerable budget on advertising this brand, are no longer optional in order to create a long term competitive advantage.

Balance sheet lenders must bring a sense of real world legitimacy to their offerings in order to get business without relying on tactics at the bottom of the acquisition funnel. These tactics include PPC, affiliate and targeted SEO keywords that place lenders in front of potential borrowers at the moment they need access to small dollar loans. While it’s great to be there at this stage of the acquisition process, in order to build a lasting loan portfolio that doesn’t rely on one fickle media company (like Google), lender brands must literally be inside their potential customer’s head before they make their loan decision.

Payday, Small Business & Installment Loan Biz

Payday, Small Business & Installment Loan Biz

To gain this brand awareness in terms of media channels, we recommend TV, outdoor, print and direct site sponsorship in addition to programmatic marketing; of course, budget permitting. On the ‘earned’ side of media, lenders should focus on Public Relations, Content Marketing and Organic Social Media –  again to bring a sense of real-world legitimacy into prospective borrowers minds and to create brand awareness.

Lenders should also employ direct acquisition tactics, in addition to building a brand. If there is not enough budget to do all of this, we recommend focusing on acquisition. We live in the real world, and those lenders on a shoestring budget will have no other choice. For direct acquisition (those bottom of the funnel tactics) we certainly recommend lenders to employ lead generators, programmatic display advertising (RTB and Retargeting), SEO through content link building on quality sites (no shady stuff!), email advertising and perhaps even snail mail direct marketing.

[Be aware that direct mail marketing, unless well targeted, typically results in <1.5% conversions! Expensive… After reviewing 15M+ first-time customer acquisition conversion rates, CAC’s (Customer Acquisition Costs) ranged from $198 – $395+.]

One interesting detail is that payday lenders can still  use Google’s display network via Google’s Adx; one of the largest programmatic exchanges. If that continues, it demonstrates that this was merely a public relations move for Google, with their most visible property (paid search) as the only place this ban is in place.

This article was contributed by Bart Burggraaf who is a partner at MediaGroup Worldwide, a niche financial services marketing agency. Get in touch if you need any help with your marketing as a payday, installment, title, or line-of-credit lender.

Jer – Trihouse: PaydayLoanUniversity.com/

01
Jun

Time to Evolve to a New LMS!

Time to Shift to a New LMS?
If you are not happy with your current payday loan, title loan or installment loan [LMS] provider, don’t hesitate to look for a new one. Sometimes we make shortsighted decisions  to take the path of least resistance. In any case, it’s important you know  what’s out there, the cost, and the support levels you will realize by making the move.
There is new, exciting LMS technology in our market that can take your lending programs to a whole new level when it comes cost, ease of use and customer acquisition. First-time customer acquisition costs exceed $200+. Customer onboarding and servicing can break you while destroying your margins. Your LMS can make the difference! Recognize that reducing reoccurring monthly transaction costs will dramatically improve your portfolio’s performance; particularly when costs are reduced 20-40%.
Top complaint about LMS? The length of time and the out-of-pocket expenses for custom programing and integration. Solutions exist NOW!.
What if you could lower your costs, get into a better LMS that is built with the lenders interests in mind? This is now all possible. It’s time to set up a demo.
Specifics? Reach out now!! TrihouseConsulting@gmail.com
AND, don’t hesitate to visit: http://www.paydayloanuniversity.com/resources/ LOOK AT “Loan Software.”
31
May

Choice Act Defangs CFPB: “No Authority Over PDL, Vehicle Title Loans.”

Good news for payday loan, title loan and other alternative lenders! Proceed to page 403 of the Financial Choice Act  for some interesting language relevant to those of us who fund loans:

17 ‘‘(t) NO AUTHORITY TO REGULATE SMALL-DOLLAR 18 CREDIT.—The Agency may not exercise any rulemaking, 19 enforcement, or other authority with respect to payday 20 loans, vehicle title loans, or other similar loans.’’

Additionally, the American Bankers Assn. submitted a report to Treasury Secretary Steve Mnuchin requesting CFPB’s proposed payday-lending rules be denied and asking for regulatory changes allowing banks to issue their own payday loans.

Here’s a link to HR 10 The Financial Choice Act as propsed in The House: Choice Act

And, here’s a link to the Bank Report: ABA White Paper on Small Dollar Credit

20
May

Payday Loans: Banks & Credit Unions Want a Piece Again

By: Jer – Trihouse. The payday loan industry took a huge hit in August 2013 as a result of the Obama administration’s ACH debacle via “Operation Choke Point.” Hundreds of lenders including tribes, state licensed and offshore lenders were forced to leave consumers high and dry without access to short-term emergency funds.

I’ll NEVER forget that day! I had arrived in Paris for a month’s holiday the prior day and suddenly I was inundated by my payday loan business partners, peers, competitors and friends with their tales of woe. Their ODFI’s and ACH processors were dropping them like flies. We had to scramble to collect on hundreds of millions of dollars in consumer loans! But how?

I must have spent 80 hours on Skype my first week in France in an attempt to solve our payment process and banking issues.

Eventually, we developed a plan and survived. Many of my friends did not.

Today, things are completely turned around for us. It’s back to business as usual. Banks, ACH processors, credit and debit card processing are relatively easy to secure. New lenders with creative loan products are entering our game daily. Installment loans, FinTech, P2P, marketplace lending, loan-by-phone… exciting times and tremendous opportunity!

As I pointed out in a previous article, Native American Tribes loaned $1B plus last year. One publicly traded company lent $500M in just one recent quarter while others report similar results. Meanwhile, thousands of brick-n-mortars continue to thrive in 33+ states and new lenders enter this space daily. “Pew estimates 12 million Americans take out payday loans each year, spending $9 billion on loan fees.” Add car title loans, installment loans, line-of-credit loans… And, let’s not forget: 53% of American households cannot get their hands on $400 in an emergency! Difficult to fathom but so true.

Why? Because consumers and SMB’s continue to seek loans at record rates. And, they are willing to pay 300%+ APR’s for the privilege. (NOTE: I rarely refer to APR’s but it seems appropriate here.)

So, it’s no surprise to me that the Wall Street Journal ran a piece with the headline:

“Banks Want a Piece of the Payday-Loan Pie”

“Pushed out of short-term loans by 2013 regulation, banks and credit unions hope for a comeback.”

This is great news for alternative financial lenders!

I welcome this development!!

With banks and credit unions (recall credit unions do not pay taxes) lobbying for less regulation and declawing the CFPB, our future is secured.

As WSJ reporter Yuka Hayashi writes, “Letting banks and credit unions offer small loans, proponents say, would help the millions of U.S. households that pay billions of dollars in fees each year to payday and auto-title lenders that often charge annual interest rates exceeding 300%.”

And, this movement by banks and CU’s clears the path for alternative finance lenders like us to continue to offer our consumers fast, easy, transparent loan products that solve our customers financial challenges. No bank or CU can beat us at our game! We are laser focused on our customers and their needs.

Honest reporters acknowledge (Lisa Servon, I’m thinking of you 🙂 that a visit to a payday loan store or website CLEARLY and CONSPICUOUSLY reveals EXACTLY what the fees are for a payday loan, an installment loan, a car title loan, a line-of-credit product…

Can ANY bank or credit union say the same thing about their fees? A RESOUNDING NO!

Our future, in spite of reports of our death being greatly exagerated, is certain!

Need help with your small dollar loan business? Click for help.

  • Credit card processing: push-to-fund processing
  • ACH services
  • Debit card
  • Check-21/RCC
  • Online or brick-n-mortar
  • Tribes, state-by-state, offshore

14
May

Texas Payday Loan Laws & License

Texas Credit Access Businesses

Texas Credit Access Businesses obtain credit for a consumer from an independent third-party lender in the form of a “deferred presentment transaction” or a “motor vehicle title loan,” more commonly referred to as “payday loans” or “title loans.”

In Texas, the actual third-party lender is not licensed; the credit access business that serves as the broker is the licensee in this Texas CAB/CSO regulated industry. The credit access business charges a fee to the consumer for obtaining the third-party loan; this fee is usually calculated as a percentage of the loan amount.

Texas-CSO-CAB-ManualThe unlicensed third-party lender charges a maximum of 10% interest annually. Often, the Texas third-party lender participates in consumer late and NSF fees thus increasing this 10% APR.

The borrower will sign a promissory note with the lender for the actual loan and a separate credit service agreement with the credit access business. Generally, all documents are signed at the credit access business location and payments are made directly to the credit access business.

The Texas CAB services the loan, markets the loan, and secures the consumer loan on behalf of the third-party lender.

Typically, Texas CAB’s charge $22 – $35 per $100 loaned for a period due on the consumer’s next payday.

CREDIT ACCESS BUSINESS LICENSING FORMS

Texas CAB Licensing Forms

New License Applications: Apply Online: ALECS

Personal Affidavit

Personal Employment History

Personal Questionnaire

Texas CAB Individual License Forms

Application for New License or Transfer of License

Application Questionnaire

Assignment of Statutory (Registered) Agent

Business Operations Plan

Disclosure of Principal Parties

Disclosure of Third-Party Lenders

Financial Statement-Personal

Financial Statement: Schedules 1 – 3

Financial Statement: Schedules 4 – 6

New Application Checklist

New Application Consent Form

Personal Affidavit

Personal Employment History 

Personal Financial Statement

Personal Questionnaire

Statement of Experience

Statement of Records/Record keeping

 

 

04
May

Criteria Required for an Installment Loan or Payday Loan

Borrower Requirements for Payday & Installment Loans

At a minimum:

  • Military exemption
  • Debit card
  • Completed payday or installment loan application
  • Proof of income (Normally a bank statement(s)
  • Maximum of 2 bank account NSF’s in past 30 days
  • Demonstrate an ability to repay the loan; meet the terms of the loan

Note: Again, these are the very minimums. Your loan business minimum requirements may differ. And many operators will disagree with my last point!

Where are you on your installment loan lending business evolutionary scale?

If you’re a startup, having a serious amount of capital you need to put to work quickly, you will have to embrace more risk and expect higher first-time default rates.

Your first time customer acquisition costs will be higher than a fully matured portfolio as well.

How to Start Installment Loan Business

How to Start Installment Loan Business

On the other hand, those of us with legacy portfolios having displayed stability beyond the first 2+ years, will likely treat our loan portfolio as an annuity. 80% plus of your customer base will be returning borrowers. 10% – 20% of your customers will have to be replaced annually.

There are a multitude of strategies to profiting in the business of lending money to make money; without the need to actually fund loans. Here are 14 different ways I discussed previously: “14 Ways to Make Money in the Payday Loan – Installment Loan Space.”

Finally, employ one or more of the sub-prime consumer agencies we thoroughly discuss in our Manuals a few of which are listed here: Payday, Car Title & Installment Loan Resources

03
May

Payday Loan: 36% APR Cap Rate Impact on South Dakota

36% APR Cap Rate on South Dakota has Devastating Impact on Some So. Dakota Residents.

When will the regulators and folks who have access to cash in an emergency ever understand?

A multitude of organizations, the CFPB, PEW and the Federal Reserve among others, recognize the fact that “47% of U.S. residents cannot get their hands on $400 cash in an emergency!

The few Americans who actually cast a vote, and the various state and federal regulators, must eventually comprehend that passing laws against poor people is not the method for solving this cash flow problem.

Payday, Small Business & Installment Loan Biz

Payday, Small Business & Installment Loan Biz

South Dakota voters didn’t understand the repercussions of the payday loan bill that was passed. Passage didn’t squelch the need for a temporary loan. It simply pushed the financially challenged into the hands of banks and credit unions who charge 1000%+ APR’s for NSF’s, out-of-state lenders and Native American Indian tribes.

Competition for borrowers, Fintech companies, and the daily onslaught of new financial products is the answer to meeting the challenge of making cheap money available to those who experience a sudden car repair, rent payment difficulty, sickness… – Jer Trihouse and yes I’m biased!