OK. Here is my add to the posts.
Our company has, and is, helping both community owners and retailers start captive finance companies. We have clients from California to Maine and all points in between, including over 50 in Kurt's state of Texas. The short response is there are people doing it, and doing it legally.
The more detailed response is, it is not for everyone.
- The state or states in which a community owner is located is important, because some states are more expensive to license in that others and often have more difficult compliance issues.
- The number of loans originated each month necessary to "break even" will depend on the average dollar amount of the loans and the states licenses are held in.
- Some people are not able or perhaps not willing to learn a whole new business.
- Some people's capital is too stretched to handle the start up costs. (The money to make loans with is easy once one learns how.)
Kurt is correct if his statement about enforcement revolves around the CFPB. I believe, based on my conversations with CFPB personnel, they are at least a year away from examining MH chattel lending - unless there is a consumer/competitor/whistleblower complaint. The states however are a different story. Remember the states have shared authority with the CFPB to enforce the Dodd-Frank Act and some states have utilized it.
Lease with an Option to Purchase (different from Lease-to-Own and Rent-to-Own) is legal in some states and not in others. Further, each state where it can be utilized has different laws, which necessitates different contracts. ***This is not an internet searchable project. *** Each state has different rules regarding the collection and payment of sales taxes. In addition to state laws, the federal government requires a comprehensive compliance management system in place and functioning. The CFPB, the FTC, DOJ, the IRS, and FinCEN, all have rules and regulations in play the operator is expected to follow.
Without the help of knowledgeable consultants and attorneys, it would be almost impossible to do everything correctly using either method.