consumer strongfinance companiesstrong.pdfVIP

This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Consumer Credit Costs, 1949–59 Volume Author/Editor: Paul F. Smith Volume Publisher: Princeton University Press Volume ISBN: 0-691-04116-4 Volume URL: /books/smit64-1 Publication Date: 1964 Chapter Title: Consumer Finance Companies Chapter Author: Paul F. Smith Chapter URL: /chapters/c1720 Chapter pages in book: (p. 6 - 27) CHAPTER 2 Consumer Finance Companies CONSUMER finance companies engage primarily in making personal loans to consumers and are identified and defined by their operations under state small-loan laws. Although these laws differ in detail from state to state, they are similar in content and scope. They provide for the licensing and supervision of small-loan operations and specify many of the terms and conditions of the loans. Licensing requirements include proof of the character, fitness, and financial responsibility of the appli- cant and frequently call for evidence that the proposed office will result in convenience and advantage to the community. The regulatory provisions of these laws set maximum rates of charge, usually scaled downward as the size of the loan increases; regulate fees; establish ceilings on loan size; and frequently specify the methods that can be used in computing finance charges and many of the operating details of extending and collecting credit. Consumer finance companies held $3.3 billion in consumer loans at the end of 1959. They ranged from large nationwide companies with hundreds of millions of dollars in loans to single-office operations with only a few thousand dollars in loans. This study covers nine large com- panies that were willing and able to provide the detailed cost data. They do not necessarily represent all segments of the industry. The companies included, however, held 70 per cent of the loans of all consumer fi