Babin, DiNardo: State should not loosen payday lender regulations. Written by Anna M. Babin and Cardinal Daniel DiNardo. 

Let’s take a minute and dice up this Houston Chronicle piece on Texas Credit Access Businesses.  The newspaper was apparently not satisfied with their role in passing the Houston “Payday Loan Ordinance” which caused a massive amount of closures in the City.  They still take up this reckless cause with Consumer Advocate and Church Groups by giving them a full and open forum to wage the war against the businesses that offer these loans and the people who need them.  The Ordinance raises payment amounts.  How does that help?  And the Chronicle looks the other way when this article’s authors say they do not want to put us out of business? Are they saying that with a straight face or with a wink and a smile?

So here is something new.  The 180-day limit on loans is something that Rep. Dan Flynn asked the Attorney General to look at, as it can be a limiting rule that restricts credit in a way that is unattractive to consumers.  The article stated that “At the close of the 85th Texas legislative session, an opinion request was submitted to the Attorney General to loosen restrictions in the Texas Finance Code for payday and auto title businesses that would allow for payment of loans to go beyond the 180-day limit that is clearly stated in the law.”  It went on to also say that “If the limit is lifted, payday and auto title lenders will only be required to guarantee that the arrangement of the loan is completed in 180 days, essentially expanding the length of the loan payback period indefinitely.”

Here comes the artful stroke of the brush: “Opening the door to longer-term loans would be a “devastating” blow to the hard-working, lower-income Texans who use these loans to cover basic needs, such as food, shelter and clothing.”  No.  Longer term loans mean more time to pay the loan back and lower payments.  More time to pay back means more flexibility and ability for the average borrower to manage their finances.  Lower payments mean more choices and less defaults.  How exactly is that going to be “devastating?” 

And then the qualifying disclaimer: “Our goal is not to put the payday and auto title lending industries out of business, but to ensure that reasonable regulations are in place to protect those most in need of the loans.”  (Ok, riiiiggghhht.  Grownups know better unfortunately.  These people want us out of business.

Here is the deal – Texas Credit Access Businesses have to fight and scrap every single day against people who are working to put us out of business via “thoughtful, meaningful, modest, additional restrictions.” It comes from all angles across the State and media outlets like the Houston Chronicle take up the cause without any word from our side whatsoever.  So, what happens?  41% of Credit Access Businesses in Texas close in a 4-year period.  There were 3,500 in 2013 now there are about 2,100.  With this 180-day rule, it is an issue for us that would help our CABs and customers.

Are the people who wrote and supported this article satisfied with the successful implementation of “thoughtful, meaningful, modest, additional restrictions” in the Payday Loan City Ordinance? No way – they still offer up their opinions on websites and newspapers and enjoy a wide-open forum to instill their false narrative.  These groups will not be satisfied until loans are free and that is no endorsement of the “American Way,” it is more Socialism than anything else.

This article was written and supported by people who want to shut us down.  And for some more fun, check out the hypocrisy below, the United Way accepted money from Texas Credit Access Businesses, $30,000 in fact.  Yet they are one of the groups we have seen bring on the hate speech at multiple City Ordinance hearings at City Council meetings across the State. I mean they really go for it – they HATE us and want others to think we are the devil reincarnated!

• Anna Babin, President and CEO of the United Way of Greater Houston. (United Way accepted a $30,000 grant from Texas CABs! We can’t be all that bad, can we?)
• Cardinal DiNardo is a Cardinal overseeing the Archdiocese of Galveston-Houston.
• Stephen M. Fraga of Tejas Office Products Inc.
• Irma Diaz-Gonzalez of E.T.C. Inc.
• Lynne Liberato, chair of United Way THRIVE. (United Way accepted a $30,000 grant from Texas CABs! We can’t be all that bad, can we?)
• Ping Sun of Yetter Coleman.
• Dr. Steve Wells of South Main Baptist Church.

Here is the link to the press release about the $30,000 grants from Texas Credit Access Businesses to the United Way:

http://www.tfee.texas.gov/TFEE%20Grant%20Award%20Press%20Release.pdf 

Here is the link to the Houston Chronicle piece: 

http://www.houstonchronicle.com/opinion/outlook/article/Babin-DiNardo-State-should-not-loosen-payday-11209628.php

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.

Over the last several weeks there has been a significant uptick in OCCC examinations of our Credit Access Business friends and clients.  Are you ready for the OCCC to walk in your door?  Chances are if you are a member of TOFSC or if you are a client of of CAB Consulting you are in a good position regarding software, APR% calculations, loan contracts, disclosures, and fee schedules.

That being said it is always good to get refreshers on where the OCCC may be looking the next time you come due for an examination.  If  you are in DFW, East Texas, or Houston I would make sure that you are ready to rock!

See below for some recent areas of emphasis:

• TILA – is your APR% exact?  Are you off slightly?  Needs to get fixed asap if you are even slightly under-quoting.  Contact your software company ASAP.
• Financial Privacy Act Notices – are the ones in your document package proper?
• Credit Services Disclosure Statement – regarding the time frame consumer have to ask for information – are you quoting the proper number of days?
• Updated OCCC Contact information – there was a change awhile back on this.  Did you update it?
• OCCC Notice – must be plain to see and easy to find 1-click from the home page of your website.
• Interest paid or to be paid to lender – this must also be disclosed on the Credit Services Agreement.
• When selling a motor vehicle that has been repossessed – how many bids are you getting?

If you would like additional information on these areas feel free to reach out!

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.

Auto title and payday loan business acquisitions are on the up, and demand is mounting as interest to expand business through existing locations continues to grow.

C.A.B Consulting and Brokerage is seeing this first hand and is further extending its brokerage efforts  to fulfill demand with the sale of three Texas auto title loan locations: a dual location Houston-area business; and a single location Dallas-area business.

Located in the Houston Metro area, the first auto title loan acquisition opportunity includes two locations, both situated in a prime strip center setting. The first location is an 800 sq. ft store with an affordable lease and no competition for miles. The second 1500 sq. ft store is in a preferred location with no competition in the immediate area. Leases have desirable terms, positive landlord relationships, and include no restrictions. Each turn-key location was built brand new two years ago and includes all furniture and office essentials. Both locations have their CAB license and have an ideal third party lender in place. Currently set up as an auto title loan business, these locations have the infrastructure in place to easily add payday loan services. The buyer is motivated and accepting offers for sale.

The second auto title loan acquisition opportunity is an established Dallas-area business. After six years, the business has established an ideal fee structure proven to be agreeable to customers that has resulted in consistent revenue and low defaults. The prime location is situated near a highly trafficked intersection in the Plano area. The lease has desirable terms, a positive landlord relationship, and includes no restrictions. The business has its provisional CAB license and a qualified third party lender in place. The location is currently set up as an auto title loan business, but includes the infrastructure to easily add payday loan services. The seller is seeking an immediate buyer and is accepting offers for sale.

C.A.B Consulting and Brokerage is brokering multiple sales of auto title loan and payday loan locations throughout Texas. Contact C.A.B. Consulting and Brokerage to sell your current auto title loan or payday loan business or learn more about acquiring businesses for sale.

Contact Michael Brown, principal of C.A.B. Consulting and Brokerage, at 214.293.8676.

A client of mine and I are seeking opinions on the 180 day limit on CAB multi-payment auto title loans Per Texas Finance Code Chapter 393.201 (Form and Terms of Contract) and Chapter 393.001 (3).

Chapter 393.201 states that a credit service contract is between a CSO-CAB and a consumer, and that the services to be performed under that contract listed under 393.001 (3) must be completed within 180 days.  Many operators interpret this rule simply, and say “this means we can’t participate in multi-payment loans for more than 180 days.”

But, my client is thinking that the promissory note component of the contracts is between the Third Party Lender and the consumer, is not related to the rules just cited, and so 393.201 should not apply.

Why?  The client’s CSO-CAB services to the customer are almost all completed on day 1 of the loan.  After that such services as taking payments on the loan, forwarding the payments to the lender, and guaranteeing the loan, are services provided by the CSO-CAB to the lender, and not the consumer.  So, again 393.201 should not apply because these are not the service listed under 393.001 (3).  The service of assisting and obtaining loans for the consumer as per the credit service contract are done well within the 180 days.

#1 priority for client is to abide by the rule of the law…please provide your comments on this we are seeking OCCC and industry opinion.

There are many benefits to my client and the consumer for loan programs that are beyond 180 days.  Let’s dig a little on this.

As always, check in with Michael Brown via email at cabconbrokerage@gmail.com or call 214-293-8676.