2. Key Topics Republic Finance Who we are, what we do, how we do
it Consequences What we can learn from other similar experiences
CFPB Hot Button Issues What are the questions and concerns?
Implications 3. Republic Finance 168,000 customers 135 branches 6
states 610 employees 4. Average Loans Look Like: Average Amount
Financed $ 2,799 Payment $ 156 Term 25 months APR 40.2% Credit
Score 615 5. Structural Elements of Installment Loans Underwritten
to determine willingness and ability to repay Fixed, set term
Fixed, substantially equal payments Fixed rate Fully amortizing 6.
Regulations DO Have Consequences Garnishment SAFE Act of 2008;
foreclosure restrictions Credit CARD Act of 2009 Insurance
licensing 7. CFPB Hot Button Issues Elements set by statute or
regulation Industry-specific practices General business practices
CFPB philosophy and approach 8. Elements Set by Statute or
Regulation Cost Credit insurance Closing fees / nonrefundable
charges Rule of 78s 9. Rate Caps: 1,000 Account Break Even Model
Average Balance Monthly Cost Breakeven Rate $200 $24.19 145% $500
$30.47 73% $1,000 $40.94 49% $2,500 $72.88 35% 10. High APR = Low
Total Cost to Customer 0 500 1,000 1,500 2,000 2,500 3,000 3,500
28% 34% 40% 46% 52% 58% 64% 500 800 1,100 1,400 1,700 2,000 2,300
2,600 2,900 3,200 3,500 3,800 4,100 4,400 4,700 5,000
TotalCostofLoan APR Loan Size Average APR Average Cost 11.
Industry-specific Practices Trapped in the cycle of debt
Refinancing Collections Appropriate use of data 12. Credit Cost /
Repayment Comparisons Installment Credit Card Loan Amount $1,000
$1,000 Term/Payments 24 61 Rate 40% 18% Payment Amount $61.19
$25.14 Total Payment $1,468.51 $1,533.30 Total Interest $468.51
$533.30 13. Maintaining Communications Average Calls / Account 3
Average Calls / Branch 3,900 Average Calls / Employee 865 14.
General Business Practices Marketing generally, solicitation
particularly Compensation generally, incentives particularly 15.
CFPB Philosophy and Approach Compliance Enforcement vs. Rule-making
Consumer Complaint Database 16. CFPB Hot Button Issues Elements Set
by Statute or Regulation Cost Credit insurance Origination Fees /
Nonrefundable charges Rule of 78s Industry-specific Practices
Trapped in the cycle of debt Refinancing Collections Appropriate
use of data General Business Practices Marketing generally,
solicitation particularly Compensation generally, incentives
particularly CFPB Philosophy and Approach Compliance Enforcement
vs. Rule-making Consumer Complaint Database 17. CFPB: Impact on
Traditional Installment Lending Legal and regulatory elements of
structure being questioned as UDAP even though lenders have no
ability to change any of these Traditional industry practices and
general business practices presumed improper? Environment
complicated by CFPB approach 18. CFPB: Impact on Traditional
Installment Lending Increased cost to customers Reduced access to
credit for some customers Lenders less flexible, less responsive,
less profitable
