Against all odds the onslaught of new tribal lenders keep on arriving on the scene. Apparently there is no limit to the amount of high interest debt that Americans are willing to indulge in. This works for the Native American lenders that keep creating new companies to provide them with the loans they need.
We have a few new operators in the space that are doing things a little differently. For one, we would never see a tribal loan company that reported to the big three credit rating agencies, but now in 2021 we achieved that milestone. This was unheard of throughout the history of tribal online loans - and you are not supposed to say 'never' or 'any' - but there truly were no tribal entities that had any ties to the credit rating firms. That has now changed.
Also, we now have a tribal loan company that has jumped into the loan arrangement business. That is to say, a company that offers loans online, draw you into their website and offer these great loan products, but in the end (in the fine print way at the bottom of the site) you find out they are just a matching service. They have lots of lenders who want to issue loans and the goal of the matching site is just to work out who qualifies for a loan and then these prequalified individuals (potential customers) are matched to a variety of lenders tied to the matching service company. In the past this was 100% the domain of non-tribal loan operators. Tribal companies were engaged fully with the leads, turning them into customers and managing those customers. Not now, as we have a tribal lender that acts as a matching service and issues zero loans themselves.
Let's take a look at these two upstarts...
Uprova (or is it Uprova Loans?) is the new company that provides loans ranging from $300 - $5,000 and will report your good payments to the big three credit agencies. Uprova? As in "You Approv(ed)" for the loan? Per the company they "provide products that meet their cash needs while building their FICO Credit Score or alternative credit scores" - nothing less than a huge jump from the past, no tribal lender would even consider using the term FICO within their website, not a chance. But here we are and we now have a Uprova doing just that. This company appears to breakout their loans into three product classes. First, we have the bad or no credit folks, who will get the $300 loan with the high interest rate. Then the 'middle of the road' customer with ok credit, they will receive the installment loan with pretty high interest rates but they will get the opportunity to repay over several pay periods. And then the good credit customers will get something called the 'Consumer Loan' which has the lowest interest rates offered by the company.
This is all fine, except the reality is that nearly all of the customers for this firm fall into the bad credit or ok credit group. No one (or nearly no one) with good credit would use this company. So the offer of $5K as a loan is most likely reserved for around three customers, while all the rest will get the much higher interest loans. At the end of the day the fact that Uprova works in any capacity with the credit agencies and reports payments (or lack thereof) to the FICO system is stunning.
In regards to the tribal loan matching company, this would be Apache Lending. This company has all the stripes of offering loans and looks just like another 100 tribal lenders. But a quick glance at the fine print it reads out as something much different when they say "the Operator of this site is a tribal lending entity and isn't A LENDER, does not settle on advance or credit choices, and does not intermediary advances" and this verbiage continues on and on. A lot of boring, legal jargon.
Tribal loan companies never got into this business. They were the ones who couldn't wait to get the lead to signup and become a customer. The opportunity to get the customer to roll over the loan (multiple times) and the chance of getting the same lender to get a second loan, these were too tempting. Perhaps now there are so many companies operating in this space they have exhausted the semi-fixed nature of bad credit borrowers that are out in the land? Or this is possibly a high turn business where they can pass along so many leads and customers that qualifying people is a lot of money itself? Either way, Apache Loans is the first tribal lending company that is not actually lending out money.
2021 saw a lot of change across the country, including inflation and supply chain difficulties, and of course the ever advancing march of the Covid-19 pandemic, and as we close out the year the Omicron variant coming on strong. But the world of Native American lending saw two new aspects to their businesses that were firsts as well. Maybe 2022 will show us even more changes.
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