TMX Finance

TMX Finance

Type	Private/Employee Owned
Industry	Title Lending
Founded	June 2010 [1] Savannah, Georgia
Headquarters	Savannah, Georgia, U.S.
Number of locations	More than 1,200 Stores (October, 2013)
Area served	Alabama, Arizona, California, Florida, Georgia, Illinois, Mississippi, Missouri, Nevada, New Mexico, South Carolina, Tennessee, Texas, Virginia[2]
Products	Title Loan
Services	Alternative Financial Services
Revenue	US$ 389.4 million (2010) [3]
Net income	US$ 81.7 million (2010) [4]
Number of employees	3300+ (January 2012)
Website	https://www.tmxcareers.com/corporate-locations/

TMX Finance is the parent company to the brands TitleMax, TitleBucks, EquityAuto Loan, The Cash Store and InstaLoan. The Company holds more than 1,200 stores in over thirteen states including Alabama, Arizona, California, Florida, Georgia, Illinois, Mississippi, Missouri, Nevada, New Mexico, South Carolina, Tennessee, Texas, and Virginia.^[5] TMX Finance’s brands serve individuals who generally have limited access to consumer credit from banks, thrift institutions, credit card lenders and other traditional sources of consumer credit.^[6] Because customers have limited access to credit, they are easy targets for extortionate lending by TMX's subsidiaries.

TMX is able to set interest rates on its loans not based on the time value of money or risk of loss on default. TMX's interest rates are based on how much it can gouge desperate consumers and range anywhere from 120% A.P.R. to 300% A.P.R. TMX Finance offers a title loan product which allows customers to meet their liquidity needs by borrowing against the value of their vehicles while retaining use of their vehicle during the term of the loan.^[7] TMX is owned by Tracy Young of Savannah, Georgia.^[8]

Brands

TMX Finance is the parent company to TitleMax and changed its name from TitleMax Holdings, LLC, to TMX Finance LLC as of June 21, 2010.^[9] TMX Finance oversees 728 stores and employs over 3,300 people nationwide. In almost 1,000 stores, the Company operates as TitleMax; in almost 200 stores, the Company uses a TitleBucks brand. TMX Finance also offers a second-lien automobile product in Georgia under the EquityAuto Loan brand, with operations conducted within 122 TitleMax stores and through 4 standalone stores.^[10]

Family of brands under TMX Finance LLC

Industry overview

Customers use the services provided by the alternative financial services industry for a variety of reasons, including that they often: do not have access to traditional credit-based lenders like banks, thrift institutions and credit card companies; have a sudden and unexpected need for cash due to common financial challenges like medical emergencies, vehicle repairs, divorce, job changes or other unexpected expenses; are self-employed small business owners with an immediate need for short-term working capital; need a small amount of cash immediately and do not have time to wait for a traditional lender to approve a loan; and see such services as a sensible alternative to potentially higher costs and negative credit consequences of other alternatives, such as overdraft fees, bounced check fees or late fees.^[11] All of these factors make borrowers ripe for exploitation by an extortionate lender charging triple digit interest rates.

This industry has thrived on the use of arbitration clauses with class action waivers in their loan agreements. No matter whether their conduct is illegal, they cannot be sued. Every lawsuit filed against a company in this industry will be removed from court based on the arbitration clause. A borrower seeking relief will then have to arbitrate his or her case individually, and not as a class action. In some instances, companies in this industry knowingly engage in illegal business practices because they know they cannot face liability in a class action. The industry has lobbied heavily for the deregulation of lending and lifting of usury laws.

Acquisition & expansion

In mid-2011, TMX Finance “reopened its 13.25% secured notes due 2015 with an add-on of $60 million non-fungible bonds.”^[12] During the second fiscal quarter ended June 30, 2011, TMX Finance opened or acquired 89 new stores. In Texas, 49 stores were opened, in addition, TitleMax entered Nevada, Arizona and Florida by acquiring 18 stores in Las Vegas, opening 6 stores in Tucson and opening 1 store in Pensacola.^[13] In May 2011, TMX Finance, closed on an asset purchase agreement Cashback Title Loans, Inc., in which TMX Finance acquired all the title loans related to Cashback locations in Nevada.^[14] In June 2011, TMX Finance acquired 14 Rainbow Title Loan Company locations – 6 of which were in Las Vegas, 4 in St. Louis, Missouri, and 4 in Kansas City, Missouri. TMX Finance acquired BudgetLine Cash Advance, LLC, and BudgetLine Cash of Missouri, LLC, in 2011. During the third fiscal quarter ended September 30, 2011, TMX Finance opened or acquired 36 new stores, which included 15 stores in Texas, 6 stores in Virginia, 4 stores in Arizona, and 2 stores in Georgia. There was a total of 8 stores acquired and opened in Missouri and 1 store in Nevada. For the third fiscal quarter of 2011, the Company had revenues of $133.7 million, an increase of $31.2 million from the same period of 2010, and a net income of $16.6 million.^[15]

Legality of InstaLoan and Cash Store in Canada

After numerous class action lawsuits filed in various jurisdictions in Canada (Including Ontario, British Columbia, and Alberta), InstaLoan and sister company Cash Store, filed for bankruptcy on April 14, 2014.^[16]

On July 7, 2016, after numerous years of litigation, and working around a bankruptcy proceeding, a class action suit totaling CAD$10,000,000 was reached allowing all customers who received a loan with either company after September 1, 2011 a chance to claim a minimum of $50 per loan to cover illegal interest rates and fees charged by the companies while their licences to provide payday loans was revoked.^[17]

References