The California Department of Business Oversight (DBO) on Tuesday released a request for information about cloud or software-as-a-service (SaaS) solutions that payday lenders could use to securely enter their financial transactions on a daily basis.
The department regulates payday lenders and other financial institutions in California, and enforces the California Deferred Deposit Transaction and California Finance Lenders laws.
As of the end of 2014, California licensed about 2,000 payday lender locations. The licensees made 12.4 million transactions and served 1.8 million customers, according to a DBO report. Nearly $3.4 billion was processed in those transactions.
"Licensees issuing the loans have no centralized database of financial transactions, instead relying on their own proprietary systems to manage transactions," the May 31 RFI says. "A centralized database that can generate aggregated data reports may help simplify and/or automate the current annual report procedure" for the laws.
DBO is interested in a system that's centrally managed, features self-service capabilities and secure log-in, and is capable of handling millions of financial transactions.
"The system must also allow such information to be transmitted to DBO in real time, and to be aggregated for use in verifying compliance. For example, the system must give DBO access to up-to-date information about the fees charged to the borrower in connection with each loan, and about how many outstanding loans a borrower has, and with whom," the document says.
In 2014, DBO introduced a self-service portal where financial institutions can apply for different types of licenses through the DOCQNET system. DOCQNET replaced and consolidated the California Electronic Access to Securities Information and Franchise Information (Cal-EASI) database and other legacy databases.
Responses to the RFI are due June 22.
