The Fed says nearly 4 in 10 Americans lack enough money to cover a $400 emergency expense

A fellow Texas CAB and TOFSC Member shared this article with me today that was featured on Fortune.com.  For those of us operating in the short term small dollar loan industry offering payday loans or auto title loans we know that having as much as $400 set aside for emergencies is damn good compared to the 18% of folks that don’t have $100.  Based on the stats quoted in the article if 37% of Americans don’t have $400+ cash reserve that comes to 123 million people, the 18% with less than $100 comes to 60 million people.  Those numbers are sobering.  With savings continuing to drop, some might say it is common sense to make sure there is growing access to credit for US consumers.  The more access to credit the better – let a wide-open market compete and let the consumers choose what works best for them in that moment.

Here’s the link to the article:

Nearly 4 in 10 Americans can’t cover a $400 expense, Fed data shows | Fortune

Legislation

Legislation

See below for PDF’s of the Payday Loan and Auto Title Loan related bills that have been proposed this year in Texas’ 83rd Legislative session. On the home page of www.CreditAccessBusiness.com, detailed “blog-style” summaries have been done on each. It is the pleasure of CAB Consulting to provide you with this online resource.

CAB Consulting has retained Keefer Strategies and is actively participating in the legislative conversation this year. We have aligned with many clients and TOFSC to get informed, have our voice heard, and impact the conversation in a positive way. If you would like to learn more about what our group of small to mid-size Credit Access Businesses in Texas are up to, please call Michael Brown at 214-293-8676, or contact him via email at Michael@CreditAccessBusiness.com

HB.420

HB.786

HB.886

HB.1040

HB.1715

SB.823

HB.1886

HB.2019

HB.2315

SB.1247

HB.3019

HB.3033

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House Bill 2019

House Bill 2019

by The CAB Man Texas on March 6, 2013

This bill was authored by Craddick, and is “relating to a limitation of total charges in connection with certain extensions of consumer credit facilitated by a credit service organization.” The bill states it is amending Texas Finance Code Chapter 393, subchapter D by adding 393.308 which states that the total charges on a arranged by CSO loan cannot exceed those outlined in Texas Finance Code Chapter 342, E & F. There are pending changes to Chapter 342 in SB 823 from Carona it is possible that this bill intends to correspond with that bill. Or, this could be a way to address the methods allegedly employed by operators to adapt to local ordinances. Currently, a maximum of either 24% APR or 80% APR is chargeable on “regulated lender loans” under Chapter 342. Credit Access Businesses (or at least that use of that exact term) are absent from this bill. HB 2019 would go into effect on 9-1-2013.

Click here for a PDF of HB 2019! HB.2019

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Texas Debt Buyer Bill is set to be signed by Governor Abbott

Texas Debt Buyer Bill is set to be signed by Governor Abbott

by The CAB Man Texas on June 19, 2019

House Bill 996 a “Debt Buyer Bill” is set to be signed by Governor Abbott.  This particular bill limits when a debt buyer can initiate legal action or arbitration to collect consumer debt. It also requires specific notices to be provided to the consumer with respect to out-of-statute debt.  The new provisions are effective Sept. 1, 2019.  Texas Credit Access Businesses definitely work with debt buyers who will need to conform to the new rules.  

Also, it would be a good idea to get some input from our friends at Kilpatrick Townsend & Stockton (https://www.kilpatricktownsend.com/) on whether any of this new bill can be applied to a Credit Access Business who takes ownership of a customer debt after they pay out the third-party lender under the guaranty arrangement.  

What is the definition of a Debt Buyer:

·         A person who purchases or otherwise acquires a consumer debt from a creditor or other subsequent owner of the consumer debt (thinking out loud, is this a CAB??), regardless of whether the person collects the consumer debt, hires a third party to collect the consumer debt, or hires an attorney to pursue collection litigation in connection with the consumer debt.

The term “Debt Buyer” does not include:

·         A person who acquires a charged-off debt incidental to the purchase of a portfolio that predominantly consists of consumer debt that has not been charged off; or

·         A check services company that acquires the right to collect on a paper or electronic negotiable instrument, including an Automated Clearing House (ACH) authorization to debit an account that has not been processed.”

·         The legislation prohibits a debt buyer from bringing suit or initiating arbitration on consumer debt if the applicable statute of limitations statute of limitations on a consumer debt has expired it cannot be revived.

Consumer Notices must be provided:

With the passage of this legislation, Texas joins other jurisdictions in having to provide notices regarding the expiration of the statute of limitations. (the statute of limitations is 6 years from due date)

In Texas, one of the three required disclosures will apply depending on whether the credit reporting period has expired and whether the debt buyer credit reports.

1.      If the credit reporting period has not expired and the debt buyer does credit report this is the notice that must be sent:

“THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT. IF YOU DO NOT PAY THE DEBT, [INSERT NAME OF DEBT BUYER] MAY CONTINUE TO REPORT IT TO CREDIT REPORTING AGENCIES AS UNPAID FOR AS LONG AS THE LAW PERMITS THIS REPORTING. THIS NOTICE IS REQUIRED BY LAW.”

2.      If the credit reporting period has not expired but the debt buyer does not credit report:

“THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT. THIS NOTICE IS REQUIRED BY LAW.”

3.      If the credit reporting period has expired:

“THE LAW LIMITS HOW LONG YOU CAN BE SUED ON A DEBT. BECAUSE OF THE AGE OF YOUR DEBT, WE WILL NOT SUE YOU FOR IT, AND WE WILL NOT REPORT IT TO ANY CREDIT REPORTING AGENCY. THIS NOTICE IS REQUIRED BY LAW.”

The notice must be “in at least 12-point type that is boldfaced, capitalized, or underlined or otherwise conspicuously set out from the surrounding written material.”

It is important that it is mentioned that the content from this blog post was gathered  from the www.Consumerfsblog.com which is a publication of Maurice Wutscher, a financial services law firm.  Our Texas Credit Access Businesses sincerely appreciate the content which was directly cited, summarized, reorganized, and paraphrased in this post.  Here is a link to their blog / website:

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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