july/august 2013 - louisianafinanceassociationlouisianafinanceassociation.com/file/lfa july august...
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LFA NEWSLETTER • JULY/AUGUST 2012 PAGE 1
LOUISIANA FINANCE ASSOCIATION
NEWSLETTERJULY/AUGUST 2013
Kimberly Baggett – Executive Director [email protected] Kathy Boiteaux – Administrative Assistant 225.295.1300
11918 Bricksome Avenue, Suite A, Baton Rouge, LA 70816 P.O. Box 40183, Baton Rouge, LA 70835
Meet the LFA 2013 – 2014 Officers Subprime Auto Worries Appear Overblown: Fed ReportAmerican Banker (08/14/13) Wack, Kevin
As the subprime auto sector continues to grow, fears of a drop in demand are beginning to swirl. However, in a new report issued by the New York Federal Reserve, the central bank seems unconcerned. “While individuals with lower credit scores are able to originate auto loans, the origination amounts are still below, but approaching, the levels seen in the early- and mid-2000s,” New York Fed officials wrote in an Aug. 14 blog post.
The report points out that subprime auto lending severely contracted during the recession and only now is returning to its normal volume. Twenty-four percent of borrowers fell into the subprime bracket during the period the New York Fed conducted its study, which remains far below the 30-plus percent before the recession.
In the second quarter of this year, many sectors saw improvement, including the decrease of both mortgage loan and student loan delinquencies. Across all debt categories, borrowers were 92.4 percent current on their obligations. n
Right to Left
President - Grandon Clemons, of Century Financial Services in Amite, LAPresident-Elect - Shawn Sagrera, of Sherman Credit in Baton Rouge, LA Vice President - Anita Fontenot, of Southwest Loan Co. in Lafayette, LA Secretary/Treasurer - Kimberly Baggett, Louisiana Finance Assoc. in Baton Rouge, LA
SAVE THE DATENOVEMBER 13TH – 15TH
LOUISIANA FINANCE ASSOCIATION
2013 FALL BOARD MEETING
NEW ORLEANS, LA
More details to come!
PAGE 2LFA NEWSLETTER • JULY/AUGUST 2013
Continued on page 3
1) Fingerprints
Please be advised that the Louisiana Office of Financial Institutions updates background checks every 5 years on all executive officers, directors, 10% or greater equity owners and control persons as defined in the NMLS Guidebook. OFI is currently setting deficiencies within the NMLS on those individuals that need to submit a new set of fingerprints and those individuals have or will be sent an email regarding this. If you receive an email or notice, please submit 2 fingerprint cards, a completed Louisiana State Police form (a blank copy can be found with the Louisiana checklists on the NMLS), and $42.50 background fee to: Office of Financial Institutions, 8660 United Plaza Blvd., 2nd Fl., Baton Rouge, LA 70809. Because it may take up to 6 to 8 weeks to process a background request, you should submit this information no later than October 1, 2013. If you have any questions regarding fingerprints, you may contact:
Jaye Lynn MiceliAdministrative Program Specialist [email protected]: 225/925-4668
2) 2014 Renewals:
I know that it seems that we just finished 2013 renewals, but renewals for 2014 begin on 11/01/2014. At that time, you should log on to the NMLS and see a “Renewals” tab. Complete the information required for your renewal online and submit it along with your electronic payment as soon as possible. Again, take note, if you were contacted via email regarding required fingerprints and get those to OFI as soon as possible. You do not have to wait until the renewal starts to submit the fingerprints.
3) Payday Reporting requirements:
Until further notice, as per the legislation, all “locations” are required to submit a report to OFI. If you do not make payday loans, simply fill in the report with zeros and fax or email it to OFI according to the instructions provided to you in the quarterly email request. n
The following message is from the Office of Financial Institutions:
Ditch the Word ‘Underbanked,’ It’s Confusing and Misleadingby Kevin Wack, AUG 20, 2013 4:11pm ET
When I tell a waiter my pork chop is “undercooked,” I mean my entree hasn’t been cooked long enough.
When prospective employers inform me I’m “underqualified,” they’re saying I don’t have enough qualifications to do the job.
So when the U.S. government classifies me as “underbanked,” it must be saying that banks play an insufficient role in my financial life, right? But how much is enough?
The first test for being counted as underbanked, according to the Federal Deposit Insurance Corp., is having a bank account. (Those without a bank account are, of course, “unbanked.”) In addition, the individual must have gone somewhere other than a bank for a specified financial service at least once in the past 12 months.
That could mean buying as few as one money order, or sending a single remittance from Western Union (WU). Or it could mean taking out one payday loan. But meeting the government’s criteria does not necessarily mean a person’s access to the banking system is impaired in any way, as one might assume.
The FDIC’s broad definition helps explain its conclusion last September that a whopping 51 million U.S. adults, or one out of every five households nationwide, were underbanked. And it suggests that the word – which has become embedded in our financial lexicon over the last few years – is not a terribly useful descriptor.
The word “underbanked” seems more popular than ever. FactorTrust, a Georgia-based company, recently began publishing a quarterly Underbanked Index to highlight trends in consumer data.
But “the underbanked,” as the term is currently used in the consumer finance industry, is also fuzzier and more misleading than it’s ever been. Increasingly it’s a euphemism to describe people who can’t get a loan at an affordable interest rate, often because they have a poor credit history. After all, “serving the underbanked” sounds a lot better than “making subprime loans.”
The much-maligned payday lending industry has even begun to use the word “underbanked” as a public-relations tactic. The website of the payday lender Cash America reads: “In 1983, Cash America founder Jack Daugherty opened the first Cash America Pawn in Irving, Texas, with hopes to build
LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 3
a company that would service the under-banked population – those who could not get financial help from traditional financial lenders.”
(There’s also an annual conference, cosponsored by American Banker, formerly known as the Underbanked Financial Services Forum. Starting next year it will be called Emerge: The Forum on Consumer Financial Services Innovation.)
The meaning of the word “underbanked” has evolved considerably over the decades. Back in the 1980s, specific geographic areas were frequently described as “underbanked,” but individuals were not, according to a LexisNexis search of news articles.
“Nigeria, with about one bank branch for every 100,000 people, is still chronically underbanked,” read a London Guardian story from 1985 that exemplifies how the word was used at that time.
It was not until the mid-1990s that the term “the underbanked” – a reference to people rather than places – appeared. At first this new term served as an extension of the word it evolved from; it referred to people who lived in places with few bank branches.
“And the ‘underbanked’ do not live only in rural areas,” read a Toronto Financial Post story in 1995. “In central Toronto, a large neighborhood is virtually branchless.”
Soon “the underbanked” was being used to describe people who had a tenuous relationship with the banking system, not individuals who lived in neighborhoods with a dearth of bank locations.
“A significant percentage of all households are unbanked or underbanked,” Stephen Brobeck, executive director of the Consumer Federation of America,
said at a 1997 news conference. “The Treasury Department estimates that 23% have no accounts or accounts with under $200 with traditional banking institutions. These unbanked and underbanked households are disproportionately low-income and minority.”
By the late 2000s, the question of whether people were underbanked no longer had anything to do with how much money they had on deposit at a bank. Instead, it hinged on the extent of their relationships with nonbank financial institutions.
In 2008, the Center for Financial Services Innovation defined underbanked adults as people who “may have [a] current checking account and/or current savings account if [the] individual made one or more non-bank financial transactions in the past 30 days.”
Also about five years ago, the FDIC adopted its own, more inclusive definition of the underbanked. Rather than requiring a person to have used a nonbank financial provider in the
last 30 days, the FDIC settled on a definition that required just one such transaction over the previous 12 months.
Part of the FDIC’s reasoning for adopting this definition, according to an official at the agency who did not want to be identified, was to highlight the opportunities for banks to keep consumers inside the banking system.
If the FDIC were to tighten its definition, the number of underbanked households in the United States would drop sharply.
Consider the impact of including people who at least occasionally use nonbank money orders but don’t otherwise fit the FDIC’s definition. If those people were excluded, the percentage of U.S. households that are counted as underbanked would fall from 20.1% to 10.4%, according to the FDIC’s 2012 report.
In the three decades since Jack Daugherty opened that pawnshop in Texas, the word “underbanked” has morphed beyond recognition. Can we please stop using it? n
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Blue Cross Blue Shield of LABuster Harms Printing
Cajun SoftwareCapital One Bank
C.I.G.A.A.R.S.Compass Technologies, Inc.
Continental Car Club, a Division of Fortegra FinancialCredex Systems, Inc.
Financial Bookkeeping Services, Inc.Gallagher Benefit Services
Gulfco Insurance Services, a Division of Fortegra Financial
Life of the South, a Division of Fortegra FinancialLoss Deficiency Surety Insurance Co., Inc.
Money Management InternationalNewman, Mathis, Brady & Spedale
Noesis Data, an Equifax Sales AgentPostlethwaite & Netterville, APAC
SourcelinkSova Financial GroupTexas Capital Bank
Tower LoanUnited Motor Club of America, a Divisio of
Fortegra FinancialWells Fargo Preferred Capital
CAJUN SOFTWARE15254 Old Hammond Highway
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CREDEX SYSTEMS, INC.1109 East Park Drive, Ste. 100B
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GALLAGHER BENEFIT SERVICES6421 Perkins Road, Ste. 2B
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2013 CONVENTION EXHIBITORS
Louisiana Finance Association
55th Annual Convention
LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 4
Congratulations to all of our
Winners.
DOOR PRIZE WINNERS
Noesis Data - $250 Gift Card David Link, OUPAC
IvyTek – Dinner for 2 Bryce Lobell, City Credit of Gonzales
PTS – Outdoor Speakers Benji Hemphill, First Heritage Credit
Best Picture on Party Barge - $100Kimberly Vasquez, Foti Financial Group
Best Picture at Golf Tournament - $100 Paul Landry, Foti Financial Group
Louisiana Finance Association
55th Annual Convention
LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 6
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For more information, contact the
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ManagerLori Mitchell, 225-663-3602
Relationship ManagersAnita Kennedy, 225-663-3601Josh Bullock, 225-663-3600Troy Ritter, 225-663-3599
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United Motor Club - $500Katie Devall Greci, Texas Capital
LFA Convention Committee - $1000Hunter Boynton, Deep South Financial Services
1st Place Gross score 59M. CulpepperR. EllisonJ. JollyR. Webster
1st Place Net score 42J. Arnold J. McClartyN. EllingtonF. Thompson
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Closest to the Pin #3 Mike Fantaski#8 Ric Webster#15 Keith Decell#17 Ric Webster
Long DriveWomen – Alice SegreraMen – Hunter Boyton
2-13 LFA Golf Tournament – Winners
Louisiana Finance Association
55th Annual Convention
LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 7
56th Annual LFA ConventionJuly 23rd – 27th
Sandestin Hilton Beach Resort
Mark your calendars!
Closest to the Pin #3 - $50 gift card: D. Walters
Closest to the Pin #8 - $50 gift card: R. Webster
Closest to the Pin #15 - $50 gift card: J. Morris
Closest to the Pin #17 - $50 gift card: M. Fantaski
Long Drive Men #11 - $50 gift card: J. Arnold
Long Drive Women #14 - $50 gift card: A. Sagrera
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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 8
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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 10
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*Approved to issue certificates in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of an Agency’s services. 09_1002b | 01-13
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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 11
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Greg Richoux - PresidentPeggy Martin - Account Rep.
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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 12
Tom BesselmanSherry Soileau - RHU, CLTC
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LFA ENDORSEDEmployee Benefits • Individual Policies
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Baton Rouge Office6421 Perkins Road
Building A, Suite 2BBaton Rouge, LA 70808
Phone 225.767.0334Fax 225.767.0389
New Orleans Office111 Veterans Blvd.Suite 1130Metairie, LA 70005Phone 504.872.3558Fax 504.464.9083
LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 13
Texas Capital Bank’s Lender Finance Group
www.texascapitalbank.com/lenderfinance.aspx
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2350 Lakeside Blvd., Suite 800
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9083_TCB_Lender Finance Ad.indd 1 6/24/09 8:49 AM