June 5, 2018

From: Shevin, Maury
Sent: Tuesday, June 05, 2018 1:24 PM
To: ‘ birmingham@bizjournals.com’ < birmingham@bizjournals.com>
Subject: Your recent article concerning the OCC, banks and short-term, small-dollar loans

I am the Association Director of the Alabama Installment Lenders Association, the oldest and most respected Alabama trade association devoted to the consumer finance industry in the State of Alabama. Your article and your experts left a gaping hole in your reporting on recent developments with the OCC’s small dollar loan policy. By writing only about banks and payday lenders, you completely ignored the most significant and safest source for small-dollar lending in the USA—traditional installment loans.

In Alabama, traditional installment lenders are licensed by the State of Alabama Banking Department to make loans under the Alabama Small Loan Act and the Alabama Consumer Credit Act. These loans are fixed-rate, fully amortizing, closed-end extensions of consumer credit, under which the principal amount financed and scheduled interest are repaid in substantially equal installments. Further traditional installment loans do not include interest-only payments nor balloon payments at maturity. And, the traditional installment lender determines the borrower’s ability to repay before extending the loan.

The traditional installment loan has served American borrowers for more than a century. In the fiscal year ending 2016, the Alabama Banking Department reported that licensees under these two laws had 725,000 loans outstanding. This vast number of loans means that these licensed lenders fulfilled the financing needs for many Alabamians. As of the reporting date, the total outstanding balance on these loans was $4.344 billion; and these licensees had combined assets of some $5.538 billion.

It is surprising to me that you would ignore this most common form of consumer credit extension.

Traditional installment lenders will continue to meet the growing demand of Alabamians for the efficient delivery of consumer loans at a fair price. Consumer credit is the fuel that drives the American and Alabama economy. The Alabama Installment Lenders Association is proud of the role that we are playing in making credit available to so many worthy people in Alabama.

Very truly yours,

Maurice L. Shevin

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