Category: Title Loan Laws

09
Jan

36% APR CAP in Nevada: A Helping Hand or a Handcuff for Your Finances?

Posted by / Title Loan Laws

Lenders, want to double your ROI? Negate the need for securing a state license in the states you choose to lend in? Insulate your loan company from state audits? Plaintiffs' attorneys? Read below!

By: Jer Ayles -As a consultant and commentator for subprime lenders, my perspective on the proposed regulatory bill in Nevada, which aims to impose a 36% annual percentage rate (APR) cap on small-dollar loans, is grounded in a deep understanding of the credit market and the needs of credit-constrained consumers.

 

This response will evaluate the pros and cons of the bill, offering a comprehensive analysis.

 

The initiative petition by Stop Predatory Lending NV to cap interest rates at 36% annually for certain loans in Nevada represents a significant intervention in the small-dollar loan market.

 

While this bill intends to protect consumers from high interest rates and spiraling debt, examining the broader implications of such a regulatory change on credit-constrained consumers who often rely on these financial instruments during emergencies is essential.

 

Key Takeaways:

 

1. Consumer Protection: The bill’s proponents rightly argue that exorbitant interest rates can trap borrowers in a cycle of debt.

 

The proposed cap aims to protect consumers from predatory lending practices, ensuring loans are more manageable.

 

2. Access to Emergency Funds:

 

Small-dollar loans are a critical lifeline for many Nevadans during financial emergencies.

 

These loans often serve those who are underserved by traditional banking systems. Imposing a cap could limit the availability of these essential funds. [Nationwide 36% APR CAP.]

 

3. Market Exit of Small-Dollar Lenders:

 

A significant consequence of this bill could be the exit of small-dollar lenders from the Nevada market.

 

The 36% APR cap may render their business model unviable, leading to reduced competition and fewer credit options for consumers.

 

4. Unintended Consequences: With reduced access to legal small-dollar loans, consumers might turn to less regulated or illegal lenders, potentially exposing them to even greater risks.

 

5. Economic Impact:

 

The small-dollar lending industry contributes to the economy through employment and taxes. Restricting this industry could have wider economic repercussions, including job losses.

Conclusion:

 

While well-intentioned, the proposed bill in Nevada may inadvertently harm the very consumers it seeks to protect by restricting their access to emergency funds.

 

A balanced approach is necessary, where consumer protection is weighed against the need for accessible credit options for those with limited financial means.

 

Allowing the market to decide on interest rate caps and robust consumer education and regulatory oversight might offer a more sustainable solution.

 

This ensures that lenders operate ethically while preserving essential financial services for credit-constrained consumers.

 

Ultimately, the goal should be to create a fair, transparent, and competitive lending environment that safeguards consumers’ interests without stifling their access to critical financial resources.

Explore a collaboration with a sovereign, federally recognized, Native American Indian tribe. 

 

Schedule a free, 15 minute “Discovery Call” with THE TRIBAL EXPERTS!


Let’s talk!
Click for an appointment.

Native American Tribe small dollar lenders

4 WAYS I CAN HELP YOU

07
Dec

Start an Arizona Car Title Loan Business

Posted by / Arizona, Tactics

Revolutionizing Car Title Loans: Embrace the Future with Technology-Driven Lending!

Attention car title loan lenders and entrepreneurs!

Welcome to the future of car title loans – where convenience meets technology!

Gone are the days of consumers having to drive to a car title storefront lender, wait in line, and have their vehicle inspected in person.

Car title loan borrower’s time is valuable, so we’ve embraced today’s technology to make the process as simple and efficient as possible.

With just their smartphone, they can apply for a loan with you.

You’ll send your applicant a link to your user-friendly app (white-labeled for your car title loan business) or your loan management platform (again, white-labeled with your branding).

In this app, your title loan applicant can create a quick, 3-minute video of their collateral: their car, truck, plane, boat, or motorcycle.

This video is your virtual inspection!

Your client simply walks around their vehicle, capturing its condition and features. It’s easy, fast, and can be done from the comfort of their home or wherever their vehicle is parked.

But that’s not all!

You can also offer them the option to simply take photos of their vehicle, along with its title and registration.

Then, they can email, text, or upload these photos directly to you through the app. This flexibility ensures they can complete the process without hassle, regardless of their schedule or technical know-how.

More importantly, you can operate your car title loan business from anywhere in the world!

Know, too, that vehicle title loans are legal in many, many states, including Arizona!

Thank you, Elon Musk, via Starlink and the Internet!

As a car title loan lender, you aim to make your customer’s loan experience seamless and stress-free.

With these innovative solutions, you bring the title loan service to them, making it more accessible and convenient than ever before.

Start your car title loan business today with our help and experience the new age of car title lending! 🚗💨📱✨

4-WAYS I CAN HELP YOU

How to Open a Title Loan Business
08
Jul

Supreme Court Says Bankruptcy Code Applies to Native American Tribes, Too

Posted by / Title Loan Laws

You're a Subprime Lender Partnered with a Tribe?

You borrow money from tribes?

This new court decision will affect you.

Key Takeaways:

According to a recent Supreme Court case, Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, the Bankruptcy Code takes away immunity from all governments, including Native American tribes.

This means that when it comes to bankruptcy law, tribes are treated just like any other government.

If you’re involved with lending or doing business with tribal entities, this is a pretty big deal.

 

Here’s the backstory:

The Lac du Flambeau Band, a recognized Native American tribe, runs a payday loan business named Lendgreen.

 

They lent money to Brian Coughlin, who almost immediately filed for bankruptcy under Chapter 13.

 

This filing usually stops collections efforts, but Lendgreen kept trying to get their money back.

 

Coughlin wasn’t happy about it, so he took them to Court to stop the collections and asked for damages because of the stress.

 

  1. The case first landed in the Bankruptcy Court, where it got dismissed because of the tribe’s sovereign immunity, which means they’re usually protected from certain lawsuits. But the First Circuit Court disagreed and reversed the decision, stating that the Bankruptcy Code could take away a tribe’s immunity.
  2. The main point from Justice Jackson, who was on the winning side of the Supreme Court ruling, revolves around two parts of the Bankruptcy Code. One part, Section 106(a), takes away governmental units’ immunity for specific bankruptcy provisions. Another part, Section 101(27), defines a governmental unit to include other foreign or domestic governments. With these definitions, the Court said that Congress meant for the Bankruptcy Code to apply to Native American tribes.
  3. On the other hand, Justice Gorsuch, who disagreed with the majority, made the point that tribes aren’t exactly foreign or domestic governments – they have a unique status. He didn’t believe Congress clarified enough that they wanted to remove the tribe’s immunity.

For lenders who partner with Native American Indian tribes and the 60% of consumers living paycheck to paycheck who borrow money from them, this is a case where the lines are blurred on how Native American tribes are treated legally.

 

This decision means that, in terms of bankruptcy, they’re viewed just like any other government.

 

It’s a complex issue that has implications for how tribes and their businesses operate in the future.

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08
Feb

California AB539 Solutions for Lenders

Posted by / California

<36%: Do you want to remain in business? We offer a turnkey program that will enable you to start/continue offering <36% APR title loans while maintaining a 200%+ ROI on your portfolio.

These solutions for continuing to offer <36% APR collateralized loan products “work” in all states!

1 in 3 Californians Struggle!

Nearly 1 in 3 Californians have a subprime credit score or no credit score at all,6 meaning they likely struggle to access credit through a traditional bank or credit union. Here’s the New York Fed Study: Click

We have 2 Solutions to choose for all States:

Offer CPI: “Collateral Protection Insurance” coverage to your title loan/collateralized borrowers.
OR
Collaborate with a federally recognized Native American Indian tribe. LeaningRockFinance.com ] #consultingservices #ab539 #tribelending #smalldollarloans

California AB539: The law became effective January, 1st, 2020. California Department of Business Oversight Law: Click Here CDBO

California Sub-36% APR AB539 Transaction Volume

Solutions for <36% APR Lenders

We’ve reviewed hundreds of existing California CFL consumer contracts. The majority already reference the forced-placement of collateral protection insurance to protect the lienholder from a catastrophic loss.

If your contracts do not already have this language, allow our 25-year experienced Team to provide your contract language free of charge.

Additionally, we offer a 100% turnkey package enabling your title loan company – in any State – to offer <36% APR collateralized loan products while still earning superior ROI on your business investment.

Simply email: TrihouseConsulting@gmail.com to schedule an exploration.

Native American Indian Tribe Collaborations

Additionally, if your offering consumer personal loans at ANY APR, we provide collaborations with Native American Indian tribes. This “works” just like the “bank model.” Visit LeaningRockFinance.com for an introduction.

06
Feb

How to Start an Alabama Car Title Loan Company

Posted by / Alabama

Opening a car title loan business in Alabama is easy, and can be very profitable. Alabama has specific licensing, regulatory and compliance statutes in place. You can access all the Alabama car title loan, pawn, small-dollar loan and payday loan license applications here: Alabama Department of Financial Institutions.

FAQ’s [Alabama Frequently Asked Questions] for entrepreneurs interested in launching or buying a small-dollar loan company are available there as well. Regarding payday loans in Alabama, there is a statewide database.

Frequently Asked Questions: Statewide Database for Deferred Presentment Providers Updated February 15, 2019
Frequently Asked Questions: Statewide Database for Deferred Presentment Providers Updated February 15, 2019

If you have invested in our “bible:” How to Loan Money to the Masses Profitably, you know that we advise readers of our course to study our Course carefully and then actually get a loan yourself.

How to Start a Loan Business
How to Start a Consumer Loan Business.

Here’s some interesting commentary from JD Supra regarding maintaining secured creditor rights in regards to Alabama car title loans & pawn.

Secured creditors must be ever mindful of their rights in consumer bankruptcy cases. Details that might seem technical or insignificant can mean the difference between a creditor’s obligation being secured and being unsecured, having a claim denied or having collateral released from the bankruptcy estate into the hands of the creditor, allowing the creditor to mitigate its financial loss.

In a recent case from the U.S. Bankruptcy Court for the Middle District of Alabama, a secured creditor was able to protect its interest in collateral in two bankruptcy cases where its title pawn transaction customers failed to redeem their pledged vehicles during the required time period. As a result, the secured creditor was able to obtain relief from the automatic stay and exercise rights against the collateral, resulting in a better financial result for the creditor.

As always, the technical details were important to the end result for the creditor. Donna Thompson and Kisha Daniel entered into title pawn transactions and several renewals with TitleMax of Alabama, Inc. Each customer provided TitleMax with the certificate of title to her vehicle, and those certificates of title identified TitleMax as the first and only lienholder.

Each customer then filed for protection under Chapter 13 of the U.S. Bankruptcy Code and declared her intention to repay TitleMax through her Chapter 13 plan. TitleMax objected to confirmation of both Chapter 13 plans and asked the court to grant it relief from the automatic stay with respect to both debtors’ vehicles, claiming that the vehicles were not the property of the debtors’ bankruptcy estates and were not subject to the automatic stay. TitleMax argued that the debtors failed to redeem their vehicles within the time period allowed under Alabama law and the Bankruptcy Code and that the court should grant TitleMax relief from the automatic stay with respect to both vehicles.

The debtors argued, among other things, that their transactions… the Pawnshop Act… Read more below,

06
Jan

California AB539 Disruption = Opportunity

Posted by / California

AB539-California 36% APR Rate Cap: Devastation + Disruption = Opportunity for CFL Lenders

By: Jer Ayles. Are you a California Lender operating per the CFL licensing model? Ready to throw in the towel, sell off your portfolio, collaborate with a federally recognized Native American Indian tribe, layoff your employees, tell the average Joe’s and Jills you simply can no longer serve them when they face a sudden financial emergency… Are you going to give up the business of lending money to the masses?

WHAT: California AB539 bans loans between $2500 and $10,000 with APR’s exceeding 36%. It became effective January 1st, 2020. This is huge. But, there are two fixes for this IF you choose to start or continue to loan money to the nearly 50% of Californians unable to access $400 cash in an emergency!

WHY: A $100 loan for 12 months yields the Lender $36.00 PER YEAR! Lenders cannot pay to acquire customers, pay their rent, pay their employees, process loan applications, spend capital on radio, TV, direct marketing, Google, Facebook, Instagram… process the loan applications [production costs] they secure via all these efforts… And then attempt to collect their hard-earned money by reaching out to customers by phone, text, letters…

RESULT: California loans of less than $4,000 = $5,000+ WILL NO LONGER BE OFFERED to consumers with “shitty credit.”

That’s life!

Consumers with poor credit, thin files, maxed credit cards, friends and families in the same boat, communities of color, low wage earners, Latino owned businesses, even the President of the NAACP said his constituents… “cannot qualify for a short term small-dollar loan ANYWHERE in California!” [Except perhaps from an illegal, unlicensed loan shark, by pawning the stuff in your garage, knock you over the head while you dodge the needles and excrement in the streets of your city, outrun the tent cites along your bicycle trails…

BANKS and CREDIT UNIONS [CU’s do are non-profits and do not pay taxes by the way] DO NOT WANT TO SERVE THESE BORROWERS! “It’s expensive, a hassle, and they do not pay back their loans in a timely fashion,” said a banker at Lend360!

Where are these ordinary Americans supposed to get their hands on $400 FAST to keep on the lights, pay for their kid’s prescription, fix the car so they can participate in the gig economy, or serve you your Big Mac?

READ ON! This may be a long read BUT it will save your business, your investment, your employees, your customers, your landlord, and your life’s work and contribute to the tax base enabling our elected officials to continue to abuse all Americans!!

Are you aware that the “big boys” sponsored AB539? They spent huge sums of $$$ on PACs and politicians in California to make certain all of us “little guys” cannot compete? Do you know that this 36% APR cap calculation does not include ancillary fees such as non-refundable loan origination fees, credit insurance [that only subsidizes the Lender and consumers must pay again each time their loan is renewed], club memberships, life insurance, accident, health, and disability insurance, involuntary unemployment insurance, property insurance, “nonfiling” fees, accidental death & dismemberment insurance, automobile security plans… MY Point? THE ALL IN APR – annual percentage rate – our sub-prime borrowers pay is HIGHER than the stated APR on their loan contract.

Guess who just a few of these “Big Boys” are:

  • Lendmark Financial Services
  • OneMain Financial
  • Oportun
  • Why? They implement a “loan packing” strategy. They add on all the “ancillary” products I mention here; none of which benefit the borrower!

Example? “Credit insurance premiums” are paid ALL UPFRONT! Credit insurance increases the cost of consumer borrowing by 33% while providing ZIP benefits for consumers. And again, these fees are NOT included in APR calculations!

THE REAL WORLD: A stated APR for a nine-month loan, $511 is 43% but the “ALL-IN APR” is 138%! Why? How? Because the so-called “big boy” PAC & politician enabled installment lender charges “credit insurance” with this loan and finances the lump-sum premium payment – $203. Thus, the amount financed increases from $511 to $714 and results in a 138% APR!

Do you know 10M+ US residents take out loans ranging from $100 – $10,000 and pay more than $10 Billion dollars in fees?

Do you know that banks and credit unions make the majority of their profits on NSF fees? They hate small-dollar lenders; unless of course they can provide $300M credit lines to the very lenders who sponsored AB539!

It’s CRIMINAL!

Smaller loans <$2500 MUST HAVE higher APR’s The operating costs for a Lender serving the sub-prime are simply TOO high. The fixed costs for a $500 loan are the same as for a $2500 loan! Upfront and customer acquisition costs are a much smaller share of the revenue from a $2500 loan vs a $500 loan.

California AB539: 36% APR Rate Cap = Devastation = Disruption = Opportunity

By now, the thousands of you who follow my rantings know that the Calif. Department of Business Oversight has begun enforcing the 36% APR rate cap [AB-539] on consumer loans between $2500 > $10,000. This bill impacts both title loans and personal, noncollateralized loans.

What’s this mean? 70% – 80%+ of the Lenders serving California consumers today will STOP funding these loans. 20 million consumers facing temporary financial hardships will have nowhere to turn to for a no-hassle, small-dollar loan FAST! 70% to 80%+ of California Lenders are shutting their doors, laying off their employees, shunning their landlord, not paying taxes… and wishing their thin-file, no file gig economy customers “SO LONG!”

DEVASTATION

Jorge Jones has a landscaping job in Los Angeles. His wife Francis works at a restaurant. Auntie, who lives 14 miles [a rent-controlled one-bedroom apt.] and 4 bus routes away, takes care of the Jones’ two kids.

Jorge’s 12-year-old Toyota pickup needs engine work. The bank turned Jorge down for a loan. Jorge’s credit card is maxed. He’s already borrowed from friends and family in the past; owes them money.

Mary, single with a 3-year old daughter, works for 2nd Chance Community Loans, a chain of 15 small-dollar loan stores in So. Calif. She knows the 1st names of all her customers, their kids’ names, their family situation… Her customers borrow money a few times per year when the washing machine breaks down, the oven takes a dive, the family car needs work…

They all live paycheck to paycheck; virtually no savings in spite of having tried. Life happens…

Carlos owns 3 strip malls. One each in Garden Grove, Santa Ana & Costa Mesa. He’s 55 years old. Worked his ass off as a carpenter, saved money, read real estate books, invested with a buddy in a run-down strip mall, refurbished it and eventually added two more. Each strip mall has the usual mix of Circle-K, a couple of restaurants, dry cleaner, a 2nd Chance Community Loan franchise…

Carlos just received “The Letter.” 2nd Chance community Loans is pulling out of California…

The Costs for Producing a 36% APR Loan

So what you say, dear reader? A $2500 loan at 36% interest is ridiculous anyway! “Good riddance to these loan sharks!”

OPPORTUNITY 

My Team has invested hundreds of man-hours researching, talking and meeting with savants in “the business of lending money to the masses.” It’s been a whirlwind of action and creativity. The results? Success.

We have solutions [ancillary products, tribal collaborations, automation and fraud reduction strategies, lower CAC and FTPD metrics… for you that offer safe and profitable solutions for you to continue to serve your California communities with emergency funds! Reach out to TrihouseConsulting@gmail.com ASAP for details. We’ve invested the past 6 months evaluating and preparing for January 1st and AB539! We have assembled a Team…

Email Jer at TrihouseConsulting@gmail.com! Include details! Are you a CFL? What type[s] of loan products do you offer? Are you a storefront or internet Lender? Ballpark, how many loans/month? Average term? Avg. loan principal. Installment? Balloon? Additional “color” will move you to the front of the line… We’ll send you an MNDA and share the solutions available for your specific situation! 

[Again: want to explore the tribe sovereign nation model? Click Here: https://LeaningRockFinance.com DISCREET is the word.]

PS: If you plan to simply “throw in the towel, to give up… let us know! We are buyers! We are happy to take your California Market share and SCALE big time. The regulators and paid-off politicians can make the business of lending to the masses more difficult BUT they cannot regulate DEMAND away. Demand for loans by credit-challenged consumers is going nowhere but UP! We want your data, your portfolios, your IP, your websites..!

You too can “play” like the big boys! It just takes creativity, iteration, knowledge, and a little help!

Collateralized [Title] Lenders: Don’t abandon California consumers and your employees in need of your help! If you’re a title loan lender, you can remain in business by submitting to this crazy 36% APR while offering “Lender Collateral Protection” to your customers in dire need of your help while still earning a very respectable ROI. And, since the majority of your competitors are not reading this, YOU CAN EASILY SCALE and TAKE MARKET SHARE! A 25-year-old, Triple A-rated insurance company executive Team has a complete turn-key solution ready for you to implement in <30 days! Your out of pocket start-up costs to get up and running? MINIMAL!

Non-Collateralized [Personal Loan/Installment] Lenders: I have another proven strategy for you as well.

04
Apr

Open a California Car Title Loan Business

Posted by / California

How to Open a Car Title Loan Company

For both car title loan lenders and their customers: California

Exercise caution before borrowing money via an automobile title loan.

Title loans require the borrower to sign over the title (pink slip) to your car, RV, motorcycle, boat, mobile home as collateral for your title loan.

If you miss payments or default on your car title loan, the lender can take your vehicle.

Tips for consumers considering an auto title loan:

  • Borrow only as much money as you can afford to fully repay when the payment is due.
  • You have the right to full disclosure in your contract of all interest charges, the annual percentage rate (APR) of the loan and all fees.
  • The final contract must be in the language in which you negotiated it.
  • Before you take out a title loan, read the contract thoroughly and be sure you understand all the terms.
  • Once the title loan agreement is signed, you are legally responsible to fulfill the obligations in the contract.
  • Be aware some title loan lenders use remote engine shutdown devices that allow them to turn off your car if you don’t make payments. Some of these devices have GPS tracking capability.
  • These car starter interrupt devices must be disclosed to the borrower.
  • Car title loans are quick and easy to obtain but borrower’s will “pay through the nose” to get one.
  • Borrowers should reach out to family, friends, peers, church, their employer… all possible alternatives before getting a car title loan. Of course, who really wants to disclose their temporary financial hardship to anyone but a car title loan professional? NO ONE!

Examples of car title loan alternatives include asking your employer for an advance on your next paycheck; finding out if your bank or credit union provides short-term credit products; asking creditors for more time to pay your bills; asking for a loan from a relative or friend.

Auto title loans typically are advertised as short-term loans for people who need money quickly but may not have access to more conventional loans, due to temporary financial challenges and low credit scores.

Few assets are more important to Californians’ financial security than their cars.

Borrowers who use their auto titles as loan collateral are risking that asset.

Car title lending can be VERY profitable for the lenders. APR’s exceed 100% per year.

Car title loans are an expensive solution for borrowers in financial straits.

The amount of these loans is always less than what the car is worth. Smart car title loan lenders only loan a maximum of 50% of the “low Book value” of the car.

WARNING: IN CALIFORNIA – AND MOST STATES – FOR ALMOST ALL AUTO TITLE LOANS, THE INTEREST RATE LENDERS CAN CHARGE IS UNLIMITED.

CAR TITLE LOANS ARE A LOAN PRODUCT OF LAST RESORT FOR BORROWERS.

Current California state law does not limit interest rates for consumer loans of $2,500 or more. [CFL License.] This includes car title loans.

Last year, nearly 100 percent (99.99 %) of auto title loans equaled or exceeded that $2500 threshold.

The APR (annualized interest rate) on the vast majority of car title loans was 70% to 100% plus.

Title Loan Business

Start a Title Loan Business

Title loan lenders who follow the “Best Practices” discussed in our “How to Start a Car Title Loan Business” will disclose ALL fees, interest rates, add-ons… to the borrower before the title loan is consummated. [You want to learn how to make money with a car title loan business? Click here.]

Car title loan borrowers should carefully review the terms of the loan BEFORE signing the title loan contract.

Always check with the California Department of Business Oversight on a company’s license BEFORE entering into an agreement for an auto title loan.

www.dbo.ca.gov 1-866-275-2677

 

01
Apr

Arizona Car Title Loans: CONSUMER LENDER LOANS FINTECH

Posted by / Arizona

Title loan companies are still specifically included in this new Arizona Fintech Consumer Loan law.

These lenders are the successors to payday loans, who lend small sums of money at relatively high interest rates using the customer’s vehicle as collateral.

Title loans are specifically included in this new bill.

Arizona:

ARIZONA CHAPTER 55
35 REGULATORY SANDBOX PROGRAM
36 ARTICLE 1. GENERAL PROVISIONS

IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:
“APPLICABLE AGENCY” MEANS A DEPARTMENT OR AGENCY OF THIS STATE ESTABLISHED BY LAW TO REGULATE CERTAIN TYPES OF BUSINESS ACTIVITY IN THIS STATE AND PERSONS ENGAGED IN SUCH BUSINESS, INCLUDING THE ISSUANCE OF LICENSES OR OTHER TYPES OF AUTHORIZATION, THAT THE ATTORNEY GENERAL DETERMINES WOULD REGULATE A SANDBOX PARTICIPANT IF THE PERSON WAS NOT A REGULATORY SANDBOX PARTICIPANT.

“INNOVATION” MEANS THE USE OR INCORPORATION OF NEW OR EMERGING  TECHNOLOGY OR THE REIMAGINATION OF USES FOR EXISTING TECHNOLOGY TO ADDRESS A PROBLEM, PROVIDE A BENEFIT OR OTHERWISE OFFER A PRODUCT, SERVICE, BUSINESS MODEL OR DELIVERY MECHANISM THAT IS NOT KNOWN BY THE ATTORNEY GENERAL TO HAVE A COMPARABLE WIDESPREAD OFFERING IN THIS STATE.

“INNOVATIVE FINANCIAL PRODUCT OR SERVICE” MEANS A FINANCIAL PRODUCT OR SERVICE THAT INCLUDES AN INNOVATION.

“REGULATORY SANDBOX” MEANS THE PROGRAM ESTABLISHED BY THIS CHAPTER THAT ALLOWS A PERSON TO TEMPORARILY TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES ON A LIMITED BASIS WITHOUT OTHERWISE BEING LICENSED OR AUTHORIZED TO ACT UNDER THE LAWS OF THIS STATE.

“SANDBOX PARTICIPANT” MEANS A PERSON WHOSE APPLICATION TO PARTICIPATE IN THE REGULATORY SANDBOX IS APPROVED PURSUANT TO THIS CHAPTER.

“TEST” MEANS TO PROVIDE PRODUCTS AND SERVICES AS ALLOWED BY THIS CHAPTER.

Program purpose:

THE ATTORNEY GENERAL SHALL ESTABLISH A REGULATORY SANDBOX PROGRAM IN CONSULTATION WITH APPLICABLE AGENCIES OF THIS STATE TO ENABLE A PERSON TO  OBTAIN LIMITED ACCESS TO THE MARKET IN THIS STATE TO TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES WITHOUT OBTAINING A LICENSE OR OTHER  AUTHORIZATION THAT OTHERWISE MIGHT BE REQUIRED.

Application process and requirements; fee
ANY PERSON MAY APPLY TO ENTER THE REGULATORY SANDBOX TO TEST AN 34 INNOVATION. THE ATTORNEY GENERAL MUST ACCEPT AND REVIEW EACH APPLICATION FOR ENTRY INTO THE REGULATORY SANDBOX ON A ROLLING BASIS.

AN APPLICATION MUST DEMONSTRATE THAT AN APPLICANT BOTH:
1. IS AN ENTITY OR INDIVIDUAL THAT IS SUBJECT TO THE JURISDICTION OF THE ATTORNEY GENERAL THROUGH INCORPORATION, RESIDENCY, PRESENCE AGREEMENT OR OTHERWISE.

2. HAS ESTABLISHED A LOCATION, WHETHER PHYSICAL OR VIRTUAL, THAT IS ADEQUATELY ACCESSIBLE TO THE ATTORNEY GENERAL, FROM WHICH TESTING WILL BE 43 DEVELOPED AND PERFORMED AND WHERE ALL REQUIRED RECORDS, DOCUMENTS AND DATA 44 WILL BE MAINTAINED.

3 PERSONS THAT ALREADY POSSESS A LICENSE OR OTHER AUTHORIZATION UNDER STATE LAWS THAT REGULATE A FINANCIAL PRODUCT OR SERVICE MUST FILE AN 3 APPLICATION WITH THE ATTORNEY GENERAL TO TEST INNOVATIVE FINANCIAL PRODUCTS OR SERVICES WITHIN THE REGULATORY SANDBOX.

FOR A SANDBOX PARTICIPANT TESTING CONSUMER LENDER LOANS AS DEFINED IN SECTION, AN INDIVIDUAL CONSUMER LENDER LOAN MAY BE  ISSUED FOR UP TO FIFTEEN THOUSAND DOLLARS, EXCEPT THAT AGGREGATE LOANS PER CONSUMER MAY NOT EXCEED FIFTY THOUSAND DOLLARS. ALL CONSUMER LENDER LOANS ISSUED IN THE REGULATORY SANDBOX, INCLUDING LOANS IN EXCESS OF TEN THOUSAND DOLLARS, ARE SUBJECT TO ALL OF THE FOLLOWING:

Arizona Fintech Legislation 2018

13
Jun

Start a Georgia Car Title Loan Business

Posted by / Georgia, Title Loan Laws

Georgia Title Pawn & Title Loans

How to open a car title loan business in Georgia

Governments move links often. If you encounter any broken links, start your research here: http://dbf.georgia.gov/

If you follow the advice offered in our “Car Title Loan Manual,” you’ll get a title loan here as part of your research: http://www.titlemax.com/georgia-title-loans/

The state of Georgia refers to car title loans as title pawn transactions.

Georgia Vehicle Registration: http://dor.georgia.gov/vehicle-registration

Georgia Title Loan legislation specifically authorizes “title pawns” as a type of pawn transaction.

A Georgia pawn broker may:

  • Charge interest and charges of up to 25% of the principal amount for each 30 day period during the first 90 days of a title loan.
  • Transactions extended beyond 90 days may be charged for each 30 day period interest and pawnshop charges which together equal no more than 12.5% of the principal amount advanced with a minimum charge of $5.00 each 30 days.

Georgia lawmakers passed the current title pawn bill authorizing lenders to charge an annual percentage rate that amounts to as much as 300 percent.

A quote from the Georgia Department of Banking & Finance:

“Some consumers turn to pawnshops and title lenders when they are in need of emergency cash or a short-term loan. It should be noted that the Georgia Department does not regulate these types of businesses.

Depending on jurisdiction, city or county ordinances outline specific requirements for licensing and supervision of pawnshops in Georgia. Local police departments/public safety departments are typically responsible for supervision of pawnshops in their jurisdiction and often handle the licensing process as well.

One of the primary purposes behind handing supervision of the Georgia title loan industry over to law enforcement agencies is to allow them to review pawn data for stolen property.

Section 44-12-136 of the Official Code of Georgia Annotated (O.C.G.A.) provides for the supervision and licensing of pawnbrokers by municipalities.

Title Loan Business

Title Loan Business

Again, in Georgia, the interest rate car title loan companies are allowed to charge is capped by law at 25 percent monthly (300 percent annually) for the first three months and 12.5 percent monthly after that (150 percent annually). This means a combined maximum yearly interest rate of 187.5 percent.

In the case of title pawn, Georgia law [O.C.G.A. Section 44-12-138(b)(3)] requires the pawnbroker to provide title loan borrowers the following written statement when a borrower pawns their vehicle: “Failure to make your payment as described in this document can result in the loss of your motor vehicle. The pawnbroker can also charge you certain fees if he or she actually repossesses the vehicle.”

Again, the Georgia Department of Banking and Finance DOES NOT license or have any jurisdiction over car title loan lenders, pawnbrokers or pawn transactions.

21
Sep

Arizona Car Title Loan Lenders in CFPB Trouble

Posted by / Title Loan Laws

Title Loan Lenders Failed to Disclose APR’s

For car title loan lenders, it’s always been a “best practice” to fully disclose APR’s. It’s not enough to simply advertise car title loan rates! Title loan lenders MUST fully disclose – in layman’s terms – corresponding Annual Percentage Rates [APR].

This is nothing new! TILA has played a dominant role in lending since the beginning of time.

There has not been a single OLA, CFSA, FISCA or state industry conference that failed to address TILA issues since 1998 when I attended my first conference. One lawyer after another has conducted “workshops” imploring all lenders to pay attention to this issue.

So suddenly the CFPB makes an announcement that 5 Arizona car title loan lenders failed to disclose their loan APR’s on their website?

SIMPLY ASTOUNDING! We’re talking about these failures having occurred from July, 2016 onward! CRAZY! Who are these fools?

  • Auto Cash Leasing [founded 1999]
  • Interstate Lending [2005]
  • Oasis Title Loans [2013]
  • Phoenix Title Loans [2013]
  • Presto Auto Loans [2002]

The CFPB accuses these car title loan lenders of advertising a monthly interest rate but failed to state the annual APR.Annother lender is accused of forcing title loan borrowers to multiply the lenders advertised interest rate by 12! [Are you kidding me??]

Start Car Title Loan BusinessTo be fair, these 5 Arizona title loan lenders have not yet been found guilty in a court of law. Nor have they reached a settlement.

But you gotta know even the bureaucrats at the CFPB know how to take a screen shot of a title lender’s website. At least the interns do. Unless they’re kept busy doing other things.

Man, this is “Outer Limits” stuff. Too young to remember the TV show, “Outer Limits?” Too bad… great show!

Jer Ayles

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