Back to School is here is your small business ready?

by The CAB Man Texas on August 13, 2019

Did you know that for many the Back to School season each August is the second highest seasonal demand period for the payday industry?  Only the Christmas and New Year Holiday time frame beats Back to School in terms of seasonal demand. For Texas Credit Access Businesses offering cash advances, payday loans, or title loans, now is the time to invest in marketing to new and existing customers.  It is imperative that all of your marketing, promotions, social media, and referral programs are firing and connected.  Campaigns started as early as July 28th and are pushing hard until at least the first day of school. In Texas most have that date set at August 15th.   

Revenue and payment wise, many Members of our group still recall August of 2018 where we had (5) Fridays in the month and also with the way the calendar fell the 1st & 3rd pay dates fell in August, for August in September!  So those things alone meant a record number of payments due and a record revenue month for many.  While we do not have the same thing happening this month with the pay dates, we still have the increase in demand to focus on, so make that marketing happen now! Don’t forget to keep your teams happy, motivated, and focused this month as the workload can increase with higher demand and payment volume.

One great idea to for blog readers that is happening in Central Texas is doing back pack give-away promotion where new customers are entered for a chance to win back packs filled with a variety of much needed school supplies.  This has been warmly received by customers.  Social media has been showing the love with lots of shares and likes of the images we posted of the backpacks so that is very good.

How do we know Back to School demand is here?  There are a number of criteria that paint a very clear picture, for starters lead conversions were up, we saw 12% on one source versus mostly having been in the 5-10% range in prior weeks.


Another sign – loan volume is way up August 1st to 8th versus July 1st to 8th:

  • Funding volume is doubled.
  • New Customers doubled.
  • Online applications up 38%.
  • Reloans doubled.
  • Increases tripled.
  • Denials down 10%.

This blog post was written by Michael Brown, President of CAB Consulting and the Texas Organization of Financial Service Centers.  He can be reached at 214-293-8676, or Michael@CreditAccessBusiness.com.

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Recently another new dynamic in our industry has surfaced and this is reminder that as a small business owner in the payday loan-cash advance-installment loan industry, everyone on your team needs to continually study and learn customer behaviors. 

What is this new dynamic? It is the borrower habit of switching their debit card “on” “off” by logging into their bank account, and with the click of a button, they lock out any charges from occurring to that card number.     

By switching off the debit card number, consumers are given a tool to protect themselves from unauthorized charges which is a good thing.  But it does lock out authorized charges as well.  Once the consumer has located a lost card or perhaps successfully evaded authorized charges (mostly during the pay-date starting early in the a.m. and going all hours that due date of the authorized charge) then they can switch the card back “on” begin using it again.   

This tool that consumers have been armed with is similar to the red flag behavior of withdrawing all of the recently direct deposited pay the moment it hits their bank account, which has long been a warning sign of a consumer who does not want to make their payments.

What Consumer Advocates rarely want to focus on is how many borrowers default, or who evade, outthink, and delay making on-time payments.  This problem is directly correlated to the higher APR’s in our industry which are set where they are, to offset defaulted loan costs.  Defaulted loans are not good for anyone and for the small business owners in Texas it is a constant concern.  Hoping that sharing this recent observation will assist you and your team in your ongoing education in our industry today!

Banks that feature the “turn card on / off function that we have tracked so far: 

  • Chase.
  • RBFCU.
  • Abilene Teachers FCU.
  • Austin Telco.
  • University of FCU.
  • Wells Fargo.

This blog post was written by Michael Brown, President of CAB Consulting and the Texas Organization of Financial Service Centers.  He can be reached at 214-293-8676, or Michael@CreditAccessBusiness.com.

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Submit your comments to the CFPB by May 15th

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CFSA has been urging industry stakeholders to submit a comment letter to the CFPB regarding the  “CFPB Rule Proposal to Reconsider the 2017 Payday Lending Rule.”   Again, right now the CFPB ATR and Payment Provisions are on hold which is referred to as a “stay.”  See below for what CFSA is saying we need to do, go […]

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Interesting development on the subject of the so-called Payday Loan City Ordinance

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The Austin American Statesman put out an article this week (“Senate votes to limit city regulations on private businesses.”) that discussed two bills in the legislature that were about to be passed by the Senate.  The bills, SB 2486 and SB 2488, will limit local government control over private businesses.  It appears the bills are directly […]

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