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JULY/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 Report American 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, LA President-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 DATE NOVEMBER 13TH – 15TH LOUISIANA FINANCE ASSOCIATION 2013 FALL BOARD MEETING NEW ORLEANS, LA More details to come!

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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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We extend a special thank you and appreciation to all of our Sponsors and Exhibitors.

2013 CONVENTION SPONSORSAllied Business Systems

American National Insurance CompanyAssurant Solutions

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

Baton Rouge, LA 70816

CREDEX SYSTEMS, INC.1109 East Park Drive, Ste. 100B

Birmingham, AL 35235

E CASH SOFTWARE SYSTEMS216 Avalon Circle

Brandon, MS 39047

GALLAGHER BENEFIT SERVICES6421 Perkins Road, Ste. 2B

Baton Rouge, LA 70808

INTERPOYNT, LLC200 River Edge Parkway, Ste. 570

Atlanta, GA 30328

IVY TEK, INC219 Rainbow Drive, Ste. 11912

Livingston, TX 77399

LOSS DEFIEIENCY SURETY INSURANCE CO.P.O. Box 83480

Baton Rouge, LA 70816

NOESIS DATA AN EQUIFAX SALES AGENT11606 Southfork Avenue, Ste. 100

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PTA FINANCIAL SERVICES113 North Park Ave.Calhoun, GA 30701

REPAY – REALTIME ELECTRONIC PAYMENTS3 West Paces Ferry Road, Ste. 200

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2013 CONVENTION EXHIBITORS

Louisiana Finance Association

55th Annual Convention

LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 4

LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 5

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

PROVIDES A FULL LINE OF FINANCIAL SERVICES TO THE CONSUMER FINANCE INDUSTRY

For more information, contact the

SPECIALTY FINANCE LENDER GROUP

ManagerLori Mitchell, 225-663-3602

Relationship ManagersAnita Kennedy, 225-663-3601Josh Bullock, 225-663-3600Troy Ritter, 225-663-3599

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Normal credit qualifications applyMember FDIC www.capitalone.com

Toll Free: 888-284-85377 Convenient Locationswww.autotitle.com

Your FULL ServiceAuto Title Stop!

• Motor Vehicle Registration• Electronic Lien & Title Program• IRP (International Registration Plan)

• Duplicate Auto Titles• Delivery and Pick-up• Notary Public• License Plates• Driver’s License Renewals

IvyTek – Dinner for 2Blake Johnson, Finance Service of Franklin

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

2nd Place Net score 46J. AlarioT. BesselmanJ. Morris

3rd Place Net score 46G. CromerR. JohnsJ. MapesD. Morrish

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

Allied Business Systems is the leader in financial software. We have been providing solutions for

the Consumer Lending Industry for over 30 years. ABS is proud to offer top of the line

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Call or visit our website to learn more!

Website: www.alliedbiz.com4848 Mercer University Drive

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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 8

Credit Insurance General Agency and Related Services

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1. Hometown Service2. Competitive Commissions3. Friendly and Responsive Claims Service4. Over 30 Years Experience

Specializing in the Credit Insurance Industry

LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 9

LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 10

Connect

Money Management International

*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

Offices serving: Baton Rouge, Bossier City, Monroe, New Orleans, Shreveport, and Slidell.

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LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 11

Richoux & AssociAtes, inc.

P.O. BOX 1768COVINGTON, LOUISIANA70434-1768TELEPHONE (800) 586-9474

Greg Richoux - PresidentPeggy Martin - Account Rep.

“A Computer Software Company” - Over 40 years experience in the Computer/Lending Industry

- Dedicated to CUSTOMER SATISFACTION!

- Complete Consumer Finance Packages including General Ledger, Loan Solicitation, Electronic Credit Bureau Reporting, Debentures

- Operating In, Alabama Florida Kentucky Louisiana Mississippi Ohio South Carolina Tennessee

LFA NEWSLETTER • JULY/AUGUST 2013 PAGE 12

Tom BesselmanSherry Soileau - RHU, CLTC

Kim Breard - Senior Account ManagerWendy Duthu - Senior Account ManagerDarby Stewart - Senior Account Manager

LFA ENDORSEDEmployee Benefits • Individual Policies

Human Resource Solutions • Financial PlanningExecutive Benefit Planning

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

The Lender of Choice for the Consumer Finance Industry

2350 Lakeside Blvd., Suite 800

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4609 Bluebonnet Blvd., Suite B

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Member FDIC www.texascapitalbank.com NASDAQ®: TCBI

Eric Trainor 225.295.9152

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David Fricke 972.656.6699

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9083_TCB_Lender Finance Ad.indd 1 6/24/09 8:49 AM