Author: TeamLeader

OCCC set to report to Finance Commission Friday

Posted on by TeamLeader

OCCC set to report to Finance Commission Friday

by The CAB Man Texas on December 18, 2019

The OCCC is all set to report to the Finance Commission this Friday, December 13th.  Below for the key take-aways for CABs offerring payday, installment, and title loans in Texas.  The report will compare September-October 2018 vs. 2019.  The Septermber-October 2019 part of the OCCC “fiscal year to date 2020”).

·         Examinations are down across the board at every license type except Pawn (89 in 2018 vs. 100 this year).

·         OCCC is reporting they are below target on exams and that they have been doing training and certifications.

·         As well, they are heavily focused on an “enterprise” examination of a large CAB that is taking up 20% of their focus / target.

·         CABs went from 13 examinations in the same period of 2018 compared to just 6 this year.   

·         For whatever reason CABs are way below all of the other license groups in terms of the “acceptable level of compliance” which is a term used for how well we are being examined.  We are hovering in the 55-65% range over thre last year whereas everyone else is in the 80-100% range.  This has been the trend since q4 2018 and would mean that us CABs have not been getting examined much and from our perspective many would agree.

·         Investigations – zero so far for payday and title categories in FY 2020 compared to just 1 on a title loan business same period last year.

·         Complaints – 8 in payday and 10 in title compared to 17 payday and 11 in title which is always good to report.

·         CABs are looking very good with their ratio of complaints to total licenses.  We are at .9 of 1,920 licensees which is at the lower end of the spectrum.

Link to the packet: https://www.fc.texas.gov/sites/default/files/2019-12/121319-fc-packet.pdf

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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post:

What We Do

Posted on by TeamLeader

What We Do

Experience areas are listed A – Z.  Scroll down to read!

CAB Manual

The CAB Manual contains the basic information needed to start the licensing and compliance transition process. Ordering this manual from C.A.B. Consulting and Brokerage will assemble all necessary elements to begin the transition process, eliminating the need to go to more than one place for initial information, guidance, and paperwork. The manual materials are offered in print and online for our client’s reference when needed. Summary of included items:

•Transition process summary and opinion letter with important information related to the new license and licensing process
•Compliance summary and opinion letter with important information related to notices and disclosures
•Reference copies of important laws and regulatory publications
•Rules summary with interpretation and comments
•License application documents
•Inclusion of company members to the CAB Consulting and Brokerage Newsletters, Emails, and RSS Feeds

Collections and Debt Sale

C.A.B. Consulting and Brokerage has a unique relationship with a debt selling platform that assists clients in liquidating their bad debt portfolios quickly and easily to the highest bidder.  Finding the right source for this end of your business is critical, and partnering with the right people is step one.

Competitive Advantage

The most competitive businesses provide benefits to customers beyond just a payday loan in exchange for their commitment.  C.A.B. Consulting and Brokerage possesses a set of specific opportunities that are available for companies to utilize in this manner.  Let us work with you to implement new programs that broaden your relationship with your customers.  Providing benefits and increasing communication will give your business a competitive edge in a crowded marketplace.  Also, improving the company image and marketing online is an area of great need for our small to midsize payday loan clients.

Compliance Consulting Services

C.A.B. Consulting and Brokerage works for Texas CAB’s who are planning a transition towards a new Credit Access Business license or those who already have.  We are all still relatively new to “CAB,” so a continual review is smart, where one might pinpoint potential red flags, and gain more understanding the laws & rules.  C.A.B. Consulting and Brokerage has turn-key plans ready to ensure that each CSO-CAB we work with will have their license request approved, be prepared.  We are also working with an on-site independent auditor who can do audit files and troubleshoot problems in stores across Texas.

Consumer Loan Contracts

Many operators invest thousands of dollars with industry experienced attorneys to have their Consumer Loan Contracts written.  While it is always recommended to consult an attorney, some operators choose to rely on the contracts generated by their software company.  At times, these documents are used by many different clients of the software company, are basic, and do need re-working so they can be precisely applicable to your business.  CAB Consulting offers a set of Consumer Loan Contracts that have been written by an industry experienced attorney.  And, over the last 18 months CAB Consulting has worked hard to make improvements on the contracts as OCCC rules and regulations began to be more clearly understood by the industry.  Having a strong set of Consumer Loan Contracts is a top priority and a great way to ensure a passing grade in your next OCCC examination.

Corporation Startup, Filings, and Formation

The filing of corporate setup documents for LLC’s and Corporations is something that CAB Consulting ended up being positioned to do more for convenience of the client and the saving of time.  Working through Texas SOS and the IRS website to get a Tax ID #, Register a Business, or file an assumed name certificate can be done much more quickly by CAB Consulting versus some of the other “pay for service and filing” companies online.

Education

C.A.B. Consulting and Brokerage aims to be the go to source of information as payday and auto title loan businesses transition from Credit Service Organizations to Credit Access Businesses.  January 1, 2012 was the mandated date for all current payday and auto title loan operators in Texas to be certified as CAB compliant businesses.  C.A.B. Consulting and Brokerage will not only educate clients on the details of the transition, but develop long term relationships to build stronger companies into the future. Small to mid-size operators in Texas need to be informed about the laws & rules, to be kept abreast of developing changes, and to maintain a continual focus on operating in a compliant fashion.  C.A.B. Consulting and Brokerage is building its business around the needs of these clients.

Investment Opportunities

From time to time CAB Consulting is approached by individuals and organizations that are looking to passively invest in the payday industry.  There are two channels in which this can be done: the Third Party Lender, or investment on the operator side with growth capital.  As well, startups and existing operators who are growing contact CAB Consulting to discuss their desire or need for investment capital.  If you need money for growth or have capital available for investment in the industry, contact us.

Licensing

CAB Consulting has helped dozens of entities get licensed in the State of Texas as a Credit Access Business.  We work with operators to prepare for the submission of the CAB Application, make sure its the best it can be, communicate with OCCC during the process, and handle any hiccups that come up along the way.  So far, not a single client we have worked with has been denied a license!

Marketing & Advertising Ideas and Strategy, Customer Customer Acquisition Plans

CAB Consulting has developed a wide array of different marketing and advertising ideas, plans, and strategies, both B2B and B2C.   When working with startups many times they are new to the business and considerable time must be spent with these clients on strategy, how to get customers in the door, and how to engage consumers once they are in the lobby.  Sample materials, web designs, referral programs, and dba recommendations are just a few of the areas where CAB Consulting can step in and help a startup get their business opened with tools for success.

Payday Boot Camps

Two close associates of CAB Consulting are Tri-House Consulting and Paid 2 Day, since June of 2012 our three groups have been putting on the “Payday Boot Camp.”  The Payday Boot Camps are two day in-store training sessions for persons interested in starting a payday or auto title loan business.  Typically, the clients fly in from their hometown location, and spend two full days in the Paid 2 Day store.  The agenda covers both a “macro,” and “micro” look at the industry, where the attendees are taken through detailed strategy sessions, their business plans are reviewed, commented on, and adjusted if need be.  Training in a “live” store also gives the attendees a chance to watch a loan get funded and see a payment get taken.  Instruction on in store compliance and store organization is also provided.  After the Payday Boot Camp our goal is for the operator to have a clear vision of where they are headed with their startup, and to go along with that they will have direct experience with some of the biggest keys to running  successful payday business.  Paid 2 Day is owned by Danny Verrette, a California payday lender in Lake Forest, about 50 miles South of Los Angeles.  The Paid 2 Day store is setup like a typical payday loan store, but also has offices and a conference room that are ideal for instruction during camp sessions.  Tri-House Consulting is headed by Jer Ayles-Ayler.  Jer is the original source behind the Payday Boot Camp and is also an industry leader, blogger, conduit, and overall expert in high level thinking when it comes to payday business.

Sales and Acquisitions

Because of the relationships we have in the industry many times CAB Consulting is approached by organizations that are looking to acquire businesses.  CAB Consulting has connected many existing clients to buyers and played a role in the many successful sale transactions.  Some deals have required full and complete leadership by CAB Consulting, and others have simply been the exchange of the contact information between parties.  Being a part of a multitude of deals has given CAB Consulting important perspective on how the process works, how to arrive at values for a business, market valuations, licensing transition, and third party lender issues that come along with the transaction.

Software Vendor Recommendations and Introductions

CAB Consulting has direct experience with many software providers in the payday industry.  Over time, we have accumulated a valuable database of information about these providers and have placed it all into CAB Consulting Software Matrix.   The Software Matrix is comprised of 50 important questions that every company should ask when evaluating what software option may be best for them.  The answers come directly from representatives of the companies and can be a huge time and money saver.

Supplementary Documents, Procedures, Checklists, Requirements

All of the “supplementary” documents necessary for business to operate can be provided by CAB Consulting.  Documents necessary for compliance such as Fee Schedules and OCCC Consumer Disclosures do take some time, and require the ability to calculate APR%.  As well, internally created documents like customer application forms, denial letters, privacy policy, requirements for approval, employee guides, and evaluation checklists are available to clients.

Third Party Lender Connections

An important component to the CSO-CAB is its choice of Third Party Lender. C.A.B. Consulting and Brokerage represents several entities who are actively seeking to step in as the lender for CAB approved businesses. If growth capital is a need for your business, C.A.B. Consulting and Brokerage has the necessary relationships to support your growth.

Variety of loan products: Payday, Title, Installment

The Credit Access Business license covers payday loans, auto title loans, and installment loans in Texas.  CAB Consulting directs its clients on each of these business models, can assist in development of fee structure, and provide competitive data on other CAB’s fee structure, state averages, etc.

 

 

 

Tax Prep Season is here let’s get after it!

Posted on by TeamLeader

Tax Prep Season is here let’s get after it!

by The CAB Man Texas on January 9, 2020

We are nearing the end of the Holiday Season’s high demand period that coincides with the beginning of Tax Season.  Many CAB Consulting clients and TOFSC Members offer Tax Preparation services, and some will be doing it for the first time this year.   I know many who are ready to get after it so let’s go!

Here are some things every business needs to know about 2020’s Tax Prep Season:

  • IRS is expecting more than 150 million tax returns expected to be filed.
  • W2’s are already going out, all must be out by end of January.
  • Tax filing season is Monday January 27th through Wednesday April 15th.
  • Refund advances are happening already.
  • Expect heavy loan payoff trends to start mid-February.  
  • In 2019, we saw largest payoff week of entire year fall on the week of February 24th to March 2nd which was the exact week when the Earned Income Credit consumers got their refunds and paid off.
  • Earned income credit / additional child tax credit – consumers who seek these credits will get their refunds later.
  • In 2020, this means that refunds for these consumers will not happen before February 15th.  In, 2019 it was February 27th so it is good that it is 12 days sooner.
  • This is the 4th year where there has been a delay on tax refunds for those where the “PATH Act” applies (Protecting Americans from Tax Hikes Act). 

With the key information above you should be able to forecast where loan volume will go, when demand will wane, etc.  The Tax Prep market is very competitive but if you are committed it is a nice way to expand services to your existing customer base and grow an attractive additional revenue stream for your business.  If you have interest in adding these services, reach out to CAB Consulting for assistance!

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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post:

3rd Party Lender

Posted on by TeamLeader

3rd Party Lender

With over 3,000 registered payday loan businesses and 25 million people, Texas represents one of the most prolific markets for Lenders 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 “CSO – Old Way” and “CAB – New Way” pages.

The model requires that Credit Services Organizations (CSO’s), and Credit Access Businesses (CAB’s) operate alongside the 3rd 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 robust 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 3rd Party Lender’s role is often a silent and secure one.  Interaction with the customer is rare, and it is common for the Lender’s proceeds to be guaranteed by the CSO / CAB with collateral in a number ways.

Are you a CSO or CAB that needs a Lender?

Have the new requirements and rules related to the Credit Access Business licensing process forced you to seek another Lender?

Are you interested in exploring the opportunities available to investors serving as Lenders in the CSO / CAB Model?

Call or email C.A.B. Consulting and Brokerage for details!

{ 1 comment… read it below or add one }

Magda Oviedo August 19, 2016 at 2:15 am

I am looking into starting a CSO business primarily focused on home mortgage lending/refinancing. I wonder if a home based business is a good way to start since I do not have access to much capital. I also need a source of income soon due to being unemployed at the moment. I recently resigned from my 9 year Spanish teacher position.

Reply

Cancel reply

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Texas CAB Credit Access Business Solutions

Posted on by TeamLeader

Lenders

With over 3,000 registered payday loan businesses and 25 million people, Texas represents one of the most prolific markets for Lenders 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 “CSO – Old Way” and “CAB – New Way” pages.

The model requires that Credit Services Organizations (CSO’s), and Credit Access Businesses (CAB’s) operate alongside the 3rd 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 robust 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 3rd Party Lender’s role is often a silent and secure one.  Interaction with the customer is rare, and it is common for the Lender’s proceeds to be guaranteed by the CSO / CAB with collateral in a number ways.

Are you a CSO or CAB that needs a Lender?

Have the new requirements and rules related to the Credit Access Business licensing process forced you to seek another Lender?

Are you interested in exploring the opportunities available to investors serving as Lenders in the CSO / CAB Model?

Call or email C.A.B. Consulting and Brokerage for details!

 

Keeping an eye on FinTech Lending

Posted on by TeamLeader

Keeping an eye on FinTech Lending

by The CAB Man Texas on November 15, 2019

Why should Texas CABs keep an eye on FinTech Lending?  We need to watch and learn, let’s evolve our businesses by watching their successes and failures.  Where you can, implement their techniques that work, into your CAB’s capabilities! Think marketing, underwriting, process flow, etc..

These recent OCCC MSA report statistics show that FinTech now owns the Texas loan market which was not the case a few years back.

Q2 2019 OCCC Report said:

12 out of state online CABs did 67% of all single payment loans.

26 out of state online CABs did 49% of all installment loans. (comes out to $1.3 million per month in loan volume for those 26)

3 years ago the OCCC Q2 report said:

10 out of state online CABs did 50% of all single payment loans.

15 out of state online CABs did 28% of all installment loans.

Wow – just 26 CABs are now doing half of all installment loans executed in Texas.  Consumers are having their voice heard and it is saying “we love FinTech lending!”  Make changes that will mirror your FinTech competitors and tap into a massive market that you may be missing.

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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post:

Helping Green Dot and other pre-paid card holders get funded on loans…good or bad idea?

Posted on by TeamLeader

Helping Green Dot and other pre-paid card holders get funded on loans…good or bad idea?

by The CAB Man Texas on November 21, 2019

Lending to Green Dot Card Customers – is this a good or bad idea?  Many feel these and other pre-paid card accounts carry too much risk because the card holders are not as “married” to the card versus the commitment assumed is had with a traditional bank with local branches. 

We had one TOFSC member call about working with Green Dot consumers and it was brought up that another well-known East Texas operator has been doing it with a high degree of success.  So TOFSC asked this former “CAB of the Year” and “TOFSC All-Star” to share his experiences with this so far. 

Below are some excerpts from the conversation…

Positives:

·         Accepting Green Dot has been viable for (4) years now.

·         Green Dot is loadable at a lot of places – this is good for customers because each load location really acts as a bank.

·         Green Dot cards have a routing #, acct #, bank statement, username, password.

·         Takes direct deposit, SSI, etc.

·         Some customers get paid 2 days early.

Negatives:

·         They offer a “vault” where vendor access to funds is blocked…so cardholders can turn card off / on.

·         Direct Deposit hits at 2am, sends alerts to customer that alert them to debit attempts.

·         You will lose all disputes on chargebacks.

Many storefronts may not be seeing many pre-paid cards as their system is pre-programmed to automatically deny applications with most of the common pre-paid card brands entered into the bank account field.   If you are ready to experiment with Green Dot (largest card brand in the US) then remove that filter and move forward with caution as you learn this niche of potentially higher risk applicants. 

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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post:

Newsletter

Posted on by TeamLeader

Newsletter

Subscribe to our free Newsletter. Receive updates on the latest news and developments for transitioning from the Texas CSO – Credit Services Organization – to the Texas CAB – Credit Access Business.

Use the OCCC’s Alecs portal to file annual and quarterly reports

Posted on by TeamLeader

Use the OCCC’s Alecs portal to file annual and quarterly reports

by The CAB Man Texas on June 9, 2017

Did you know that the OCCC has added the capability of filing your Annual and Quarterly reports to the Alecs portal?  That is right, you no longer need to access the separate reporting area – everything you need is done right inside of your company’s Alecs portal.
Login to Alecs, click “Manage my Business” in the Nav Bar, then scroll down and to the right to “Annual/Quarterly Reporting.”  It is there that you can choose “upload report.”
Here is the link to the Alecs login – check it out:  https://alecs.occc.texas.gov/
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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post:

OCCC Compliance Basics from CAB Consulting

Posted on by TeamLeader

OCCC Compliance Basics from CAB Consulting

by The CAB Man Texas on June 27, 2017

Just a reminder for all of you CABs out there – continually review your Consumer Transaction Information Disclosures & Fee Schedules.

Many times throughout the course of the year CAB operators may change their CAB fee amounts or offer different loan products such as offering multi-payment installment loans, payday loans, or auto title loans.  When changes are made and loan  products are dropped, added, or modified, we have seen the Fee Schedule & Consumer Transaction Information Disclosures be overlooked.

Take the time to ensure that your Consumer Transaction Information Disclosures & Fee Schedule are up to date with all of the products you are offering.  This is on the OCCC Examiner Checklist and Examiners will call you out on this.  Be an “A” student and get it right.

Additionally, per Texas Administrative Code 83.5004, if changes are made to your Fee Schedule or Consumer Transaction Information Disclosure, preceded versions must be maintained on site for a period of one year or until the next OCCC examination.

Here is the exact language regarding the retention of amended Fee Schedules & Consumer Transaction Information Disclosures:

For In-Store Transactions:

“In-store fee schedule and notices. The in-store fee schedule and notices required by Texas Finance Code, §393.222(a), and §83.6003(a) of this title must be available for inspection by the OCCC in a conspicuous location visible to the general public. If a licensee amends the in-store fee schedule or notices, it must maintain documentation of the previous versions of the schedule or notices for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. The licensee may maintain the documentation of previous in-store fee schedules and notices at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”

For Online Transactions:

“Website and online disclosures. If a licensee maintains a website, it must make the website available to the OCCC for inspection. The website must include a fee schedule to show the licensee’s compliance with §83.6003(b) of this title, and applicable consumer disclosures to show the licensee’s compliance with §83.6007(f) of this title. If a licensee amends the website’s fee schedule, consumer disclosures, or method of accessing the fee schedule or consumer disclosures, the licensee must maintain documentation of the previous version of the website to show compliance with §83.6003(b) of this title and §83.6007(f) of this title. This must include the home page, any pages used in accessing the fee schedule and disclosures, and copies of the previously used fee schedule and disclosures. The licensee must maintain this documentation for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. This paragraph does not require a licensee to maintain previously used pages of the website that were not the home page or pages used in accessing the fee schedule and consumer disclosures. The licensee may maintain the documentation of previous versions of the website at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”

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.

Leave a Comment

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page. Click here for instructions on how to enable JavaScript in your browser.

Previous post:

Next post: