Texas represents one of the most prolific markets for operators in the industry. One significant reason for this is the state’s licensing structure, called the “CSO Model” or “CAB Model.” You can read more about each of these models on our web-site’s “CSOs” and “CABs” pages.

The model requires that Credit Services Organizations (CSO’s), and Credit Access Businesses (CAB’s) operate alongside the Third Party Lender who provides the funds for loans to consumers.

Yes, despite the fact that many CSO’s and CAB’s do have the assets for loan funding they can never be used for that purpose, and arm’s length relationships with other entities must be established to play that role if they wish to participate in the Texas market.

In the arrangement, a CSO or CAB functions as a broker who markets its services, administers the loan process, and assists the consumer in attaining the loan much like a co-signer.

The Third Party Lender’s role is often a silent and secure one.  Interaction with the customer is rare, and it is common for the Third Party Lender’s proceeds to be guaranteed by the CSO / CAB with collateral.

Are you a CSO / CAB that needs a Third Party Lender?

Call or text 214-293-8676 or email CAB Consulting.

 

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