Payday lender All American Check Cashing’s troubles with state regulators have cost it renewal of its annual license.
The Madison company instead is operating its 41 stores under a temporary license granted by Mississippi Department of Banking and Consumer Finance regulators who need more time to determine whether the low-dollar lender violated state laws against rolling over short-term loans.
Meanwhile, new questions have arise about the origin of a training document that regulators found on the company’s intranet detailing how to do illegal loan rollovers every 14 days for borrowers who have monthly incomes.
Michael Gray, owner of All American, insists the document is the work of the company’s former chief administrative officer who put it on the intranet without anyone else knowing about it. It remained there undetected by company employees and management until regulators found it, Gray said in an interview last month. He said he fired the alleged author, CAO Alan Crancer, right after the training document’s discovery.
However, the training document appears to have been part of materials inserted into a company provided binder titled “All American Playbook” used for training supervisors at an all-day session at a Vicksburg casino hotel in October 2012. It was to be the subject of breakout session titled “Lending on the 1st and 3rd and 14 days” led by company executive Lisa Reed.
Dale Danks Jr., lawyer for All American, said the document was not used in any training that day.
The Mississippi Department of Banking and Consumer Finance refused to renew All American’s annual license after it expired Sept. 30. “We issued a temporary license that will be in effect until a permanent license is either issued or denied,” said Taft Webb, director of the department’s consumer finance division.
Each store must post the notice that the stores is operating under a temporary license, Webb said.
The banking department put All American under a cease-and-desist order in late June after receiving complaints the payday lender routinely rolled over payday loans in violation of the state’s 2012 check casher’s law. Owner Michael Gray has denied that rollovers – the practice of renewing a loan without payment of its principal – occurred at his stores in Mississippi.
Rollover of loans essentially means “you can’t pay one loan with the proceeds of another loan,” Webb said in an interview soon after the state issued the cease-and-desist order.
The order addresses several alleged practices of All American but its main feature is the ban on rollovers.
In the order, the department says it has “reasonable cause to believe that All American Check Cashing has violated certain provisions of the Mississippi Check Cashers Act and the Mississippi Title Pledge Act.”
Examiners treat the investigation of All American just as they would an examination of any state chartered bank, credit union or other financial institution. If All American is cleared of any wrongdoing, no notice will be issued. Instead, the state will grant the lender a permanent annual license which will be listed for public view on the department’s Website.
If regulators conclude All American violated state laws, they will post a Website notice under “Administrative Actions” that detail the penalties. No details of the violations will be revealed, however.
A finding that All American broke state laws could result in fines, orders of restitution to borrowers and denial of a permanent license. The denial would force the lender to cease all lending and check cashing, according to Webb.
All American’s principals could reapply for a license but past violations would weigh into the state’s decision whether to grant a license, Webb noted.
Gray, the owner of All American, said in his first public interview since the trouble with the state that he expected full renewal of his license at the end of September. He said he expected the investigation to close with no finding of fault against his company.
Gray blames all of the trouble on Crancer, the chief administrative officer he fired shortly after the investigation began.
Crancer wrote the unauthorized training document detailing how to achieve illegal loan rollovers for borrowers whose source of income is monthly, Gray claims. Crancer denies this and says All American has damaged his professional reputation by making the claim.
In a written emailed statement Tuesday, Crancer addressed the “Playbook” and its use at the October training day.
“In October of 2012, All American Check Cashing held an offsite meeting at the Riverwalk Casino in Vicksburg….
“Every employee in attendance received a white binder entitled “All American Playbook – October 2012”. I, along with Scott Cain, Sonya Teasley, Jeremy Hoskinson , Randy Kirby, Mandi Hearn and Kelvin Hall all made presentations to the employees on a wide array of topics that day.
“There were 3 breakout session that day. One on Check Cashing presented by Laura Faulkner, a second on Collections and Garnishing, presented by Becky Bomar and third on Lending on the 1st and 3rd and 14 Days, presented by Lisa Reed.
“In the playbook there were 5 tabs, behind the Lending tab was a three-page document entitled “Breakout Session – Lending on the 1st and 3rd”. This is the document that discusses and outlines how to take fees “Mid-Month customer brings $40 and writes for the remaining credit line of $200.”
The statement says Lisa Reed, a retail store supervisor, and Heather Barnett, a retail store manager, taught the class. Both Lisa Reed and Heather Barnett names are listed at the bottom of the Breakout Session document.
Crancer added in his statement: “Also enclosed in the white binder… was a welcome note from Michael Gray, welcoming everyone to the meeting and outlying the agenda for that day. It listed the breakout sessions and theLending on the 1st and 3rd session. Michael Gray approved the agenda for that meeting in October 2012, as he does for all companywide employee meetings.”
Danks said Crancer is among several “disgruntled” former employees out to hurt All American.
Gray said proof his company follows state law rests in the fact regulators have not shut it down. “If All American did the rollovers as a routine part of business, I wouldn’t be sitting here with a company still operating,” said Gray, who emphasized All American passed a series of state compliance audits in 2013 and 2014.
He said the compliance audits included 27 unannounced examinations. Gray voiced confidence the state will renew his full license.
Crancer has hired Hattiesburg lawyer Daniel Waide to seek two years of back wages for him as well as two years of company-provided health insurance.
Crancer, a four-year employee of All American, has said in interviews that he had no part in setting loan policy or in training or instructing store employees on lending practices.
The company’s COO Kelvin Hall oversaw lending operations, according to Crancer.
Gray suspended Hall at the outset of the state investigation of All American. Danks declined to confirm the suspension was related to the state’s investigation.
Crancer alleges All American fired him for not participating in illegal activities that included under-the-table payments to state legislators.
Waide included several allegations in a July letter to Danks. In the letter, he said Crancer claims the company made the illegal cash payments to lawmakers in return for “favorable legislation.”
Waide further claims All American asked Crancer to participate in making cash payments to owner Michael Gray to help Gray avoid paying taxes.
Gray denies all of Crancer’s allegations.
Danks said he thinks Waide and Crancer “have conspired to actively engage in the criminal act of attempting to extort benefits, both monetary and otherwise from my clients.”