Texas Payday Loan Businesses – Take a CAB!

Texas Payday Loan Businesses – Take a CAB!

by The CAB Man Texas on September 2, 2011

What is a CAB?  Well, if you are a payday loan business in Texas, it’s now you starting January 1, 2012.

The title CAB stands for Credit Access Business, and along with the name change comes many changes for payday loan businesses. The current CSO (Credit Services Organization) model will evolve next year thus transitioning all payday loan businesses into CABs, which requires these businesses to comply with new regulations. Understanding the new regulations is vital to continuing your payday loan business.

Licensing is one portion of the CAB transition. Under Texas House Bill 2594, which addresses the new licensing process, current CSOs will be required to attain a CAB license and will be subject to a thorough review.   Applicants will undergo reviews not just of their business operation, but also of the principals involved with the CAB’s whose personal and business background will be requested.

What else is included in the CAB licensing process? A new application and detailed reports must be submitted to the state and an approval must be obtained in order for current businesses to operate legally after January 1, 2012. In addition, all Texas payday loan businesses must file quarterly reports, with the first being due April 2012.  The reports will summarize the prior three months of transactions and will be reviewed by the OCCC (Office of Consumer Credit Commissioner), which is the new governing body of the industry in Texas.  This process is new, it is an unknown, and will take some thought.  Are you ready to take this on?  In addition to the day-to-day operations of your payday loan business, you must create a plan to ensure compliance with the OCCC, which is a big undertaking.

The good news? CAB Consulting and Brokerage understands all the details required for your payday loan business to transition from a CSO to a CAB.  They’ve been in the payday loan business since 2003 and have recently participated in the rule making process at the Capitol in Austin to ensure thorough understanding of the CAB model and to voice preferences and concerns about proposed rules.

Don’t get bogged down by the details – contact CAB Consulting and Brokerage at 214-293-8676.   Let them inform you, handle the details of your transition, and execute the process so you can continue to do business in Texas.

Check back in for details about the new notices and disclosures requirements under the new CAB regulations.

{ 4 comments… read them below or add one }

Randy Olson May 1, 2013 at 10:59 pm

could you please send me some info about how we go about getting a loan office for Pay Day type loans started ? What license and how to apply would we need for Kerrville, Texas? What type of rules do we need to follow for our loans and where do we get a example of the contracts?
Thank you for any help you can give us.
Randy Olson

Reply

admin August 10, 2013 at 7:43 am

Hi Randy,

Congrats on your new biz. We’ve got sample docs, forms, and know-how for this. My team is focused on Texas payday ans car title loans.

Call me at 214-293-8676 Michael

Reply

Don Dunlap August 9, 2013 at 2:33 pm

I am brand new at this business idea and would like start up consulting advice

Reply

Anonymous August 10, 2013 at 7:38 am

Give us a call,Don. PH# on my web site

Reply

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New Rules for Texas Credit Access Businesses

New Rules for Texas Credit Access Businesses

by The CAB Man Texas on October 23, 2015

The 2015 Texas legislative session passed a “Clean Up Bill”, which authorized the OCCC to review, repeal, and replace rules regulating CAB’s.  Those new changes were proposed in September for pre- comment and voted for approval by the Texas Finance Commission Board to be published in the Texas Register on October 16, 2015 (last Friday) at the Texas Finance Commission meeting in Austin, Texas.

We have counted approximately 144 new changes to TAC 7, Chapter 83, Subchapter B.  This is the first time in 4 years that any new rules for payday loan or auto title loan businesses known as “CABs” have been put into place.  It is time to get educated on changes and make the necessary modifications to your documents, processes, and other operating methods.

The changes affect a broad range areas from; Definitions; Licensing Fees, Notice of Delinquency of Annual Assessment, Denial, Suspension, Revocation based on Criminal History, Examinations, Files & Records, Separation Between Third Party Lender and CABs, and Case Hearing Procedures.

CAB Consulting has thoroughly reviewed the changes and put together a compliance plan to ensure CABs, their software providers, and third party lenders are compliant moving forward into 2016.   We are told the first round of changes are slated to be made effective in late December of this year or early January 2016.

If you would like to learn more, please contact Michael Brown at 214-293-8676 or Robert Wheeler at 956-639-7162.

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Information for Texas CSO’s on Credit Access Business licensing

Information for Texas CSO’s on Credit Access Business licensing

by The CAB Man Texas on September 13, 2011

There’s decent list of new requirements that the Texas CSO needs to know about when they are applying for their new Credit Access Business license this fall.  Substantial input has been provided by many CSO’s in Texas as far as the new rules go, and recently I attended two stakeholder meetings in Austin at the Capitol Building to contribute my thoughts.

In the past I have not been to such a meeting and so I was all ears. At the beginning I wasn’t sure if the atmosphere was going to be contentious, if the members of the Finance Committee were going to be friendly, or if they were truly seeking input. I have heard of some heated confrontations on the House floor so I was kind of expecting the same. But, it was actually very co-operative, and the stakeholder input was asked for more often than it was given believe it or not.

From a high level – the OCCC is going to dig a little deeper this time around and take a close look at both sides of your business model versus your prior CSO application. Information about owners all the way down to 5% may be asked for, and they want important information for the lender as well.  Reports are going to need to be submitted quarterly, there are new ways that you must disclose information to consumers, and certain procedures will be required that have not been mentioned before.  And, there’s going to be several more fees charged to the licensee.

All in all, the forum in Austin was warm, and the word “flexible” was used often by the OCCC board members.  An example of the OCCC listening to stakeholder input and their being flexible was in regards to the request for Credit Access Businesses to provide their contract forms with their CAB application. This request was met with concern, the concern was expressed, and as a result the documents will not be required with the application.

October 21 is the next date CSO’s need to be aware of – OCCC will be firming up proposed rules and rules changes.  I will keep everyone posted on my blog – looking forward to your return.

Questions?  Feel free to call me! Michael Brown at C.A.B. Consulting and Brokerage (214-293-8676).

 

{ 2 comments… read them below or add one }

Luis g Garcia May 21, 2013 at 4:40 am

I need info about the CAB licence what the cost you charge for this license I ready to open Mr title loans and pay day loans en eagle pass tx but I need you help to fix the premises or licenses

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admin August 10, 2013 at 7:41 am

214-293-8676 call us first for an exploratory call

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OCCC Examinations in Full Swing

OCCC Examinations in Full Swing

by The CAB Man Texas on May 11, 2012

Good afternoon Credit Access Business World!  For those of you who are out and about on the internet today doing a little research on OCCC CAB Compliance, OCCC Audits, Credit Access Business licensing, etc, you most likely will happen upon this blog post.  I have been working with Credit Access Businesses on their compliance, the OCCC quarterly reports, and examination preparation.  Over the last few weeks there has been a definite up-tick in word on the street about the “Audit.”  The OCCC is calling them “Examinations” and they began in mid-April.

In December 2011, I met with the OCCC and was given some hi-lights of what an examination would be focused.  My recommendation is that you focus on Chapter 393 of the Texas Finance Code, HB 2592, and HB 2594.   Make sure your loan contracts include all recommended and required disclosures, and be ready to have files reviewed.  It is possible that a CAB be asked to refund some or all fees collected in 2012 if certain violations occur.  So, the price is high for non-compliance and sloppy documentation.

If you have doubts, there are many options out there, contact the OCCC or CAB Consulting and Brokerage, get with attorneys who are experienced, or reach out to friendly competitors.  The small to mid-size operators might be in harm’s way as they are not traditionally the ones with consultants, on staff attorneys, etc.  So if you are one who fits that profile – now is the time to invest in your business, take the time to do your research, or hire someone to review it.

If you are licensed you will be examined, and it is typical for the OCCC to simply show up at your store with no prior notice.   Call Michael Brown at CAB Consulting and Brokerage, we can discuss options and get going on a plan.  Michael can be reached at 214-293-8676, or via email at cabconbrokerage@gmail.com.

 

{ 1 comment… read it below or add one }

Tangela Taylor September 8, 2016 at 12:40 am

Need to know your costs for getting the OCCC License completed.
Please call me at 214-207-7496

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Act now to get your Credit Access Business License!

Act now to get your Credit Access Business License!

by The CAB Man Texas on December 20, 2011

Spent last week traveling all over Texas visiting with new and existing clients, also went to the OCCC offices for two meetings.  Still trying to get caught up as of today, it is important for blog readers and site visitors to know a variety of things as January 1, 2012 is just 11 days from today.

Something I want emphasize heavily:  if you are a CSO with existing business and you have not begun the application process, contact CAB Consulting and Brokerage or the OCCC immediately.  I am getting calls from business owners who are not fully aware of the situation or have not completed the application.  The deadline for licensing is January 1, 2012.  If you do not have a license in hand on that date, your CSO should not be offering payday or title loans.

You have options if you are late in the process.  The Texas Finance Commission voted on Friday to allow for the creation of a provisional license for Credit Access Business license applicants.  If your CSO has not submitted an application as of now you will need to seek a provisional license.  The OCCC is working intensely and is still processing CAB applications that were submitted well ahead of the deadline.

If your business does not have a license or provisional license in hand on January 1, 2012 and you are operating you could be subject to fines.

I have more information about this and can help if you have questions.  Feel free to call Michael Brown at 214-293-8676 or email cabconbrokerage@gmail.com.

If you wish to contact the OCCC directly on the matter, you can reach them at 512-936-7600.

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Examinations by the OCCC – show them you are tuned in!

Examinations by the OCCC – show them you are tuned in!

by The CAB Man Texas on August 6, 2012

Over the last 7 months CAB’s in Texas have evolved from a non-regulated space into the new CAB environment.  The OCCC has implemented its new way of doing things and there have been a few surprises along the way.

As a licensed Credit Access Business who has committed to learning the laws and made it a priority to study the rules outlining compliance, you are well on your way.   Do you have 100% confidence in how you have implemented Credit Access Business rules in your stores?  Have you talked with other friendly competitors about how they interpret the rules?   If you did, you might know that a preliminary round of OCCC examinations was performed.  There was some industry “buzz” from those examinations that gave many of us more of an idea of what’s to be expected.  The OCCC has been great to work with so far, for example what many would call their visits to your store an “OCCC audit”, they call an “examination.”  Seems to like a softer and friendlier term…

A commitment to gaining knowledge, operating legally, operating fairly, and exchanging information with peers is key to building confidence and securitizing your business.   So, how exactly might that be done?  Contact CAB Consulting and Brokerage!  We have created plans for our clients that create a simple approach to OCCC compliance.  CAB Consulting and Brokerage’s relationships across also put it in an ideal position to communicate recent developments and pass the latest “buzz” to your business.

Show the OCCC that your Credit Access Business is tuned in when their examination of your business goes smoothly and without any surprises.  Be an ideal CAB and get informed – make the OCCC’s job easy!   Start by contacting CAB Consulting and Brokerage to discuss how we might be able to go to work for you.  Reach Michael Brown at 214-293-8676 or via email at michael@creditaccessbusiness.com.

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Texas Payday Loan Businesses – Take a CAB!

Texas Payday Loan Businesses – Take a CAB!

by The CAB Man Texas on September 2, 2011

What is a CAB?  Well, if you are a payday loan business in Texas, it’s now you starting January 1, 2012.

The title CAB stands for Credit Access Business, and along with the name change comes many changes for payday loan businesses. The current CSO (Credit Services Organization) model will evolve next year thus transitioning all payday loan businesses into CABs, which requires these businesses to comply with new regulations. Understanding the new regulations is vital to continuing your payday loan business.

Licensing is one portion of the CAB transition. Under Texas House Bill 2594, which addresses the new licensing process, current CSOs will be required to attain a CAB license and will be subject to a thorough review.   Applicants will undergo reviews not just of their business operation, but also of the principals involved with the CAB’s whose personal and business background will be requested.

What else is included in the CAB licensing process? A new application and detailed reports must be submitted to the state and an approval must be obtained in order for current businesses to operate legally after January 1, 2012. In addition, all Texas payday loan businesses must file quarterly reports, with the first being due April 2012.  The reports will summarize the prior three months of transactions and will be reviewed by the OCCC (Office of Consumer Credit Commissioner), which is the new governing body of the industry in Texas.  This process is new, it is an unknown, and will take some thought.  Are you ready to take this on?  In addition to the day-to-day operations of your payday loan business, you must create a plan to ensure compliance with the OCCC, which is a big undertaking.

The good news? CAB Consulting and Brokerage understands all the details required for your payday loan business to transition from a CSO to a CAB.  They’ve been in the payday loan business since 2003 and have recently participated in the rule making process at the Capitol in Austin to ensure thorough understanding of the CAB model and to voice preferences and concerns about proposed rules.

Don’t get bogged down by the details – contact CAB Consulting and Brokerage at 214-293-8676.   Let them inform you, handle the details of your transition, and execute the process so you can continue to do business in Texas.

Check back in for details about the new notices and disclosures requirements under the new CAB regulations.

{ 4 comments… read them below or add one }

Randy Olson May 1, 2013 at 10:59 pm

could you please send me some info about how we go about getting a loan office for Pay Day type loans started ? What license and how to apply would we need for Kerrville, Texas? What type of rules do we need to follow for our loans and where do we get a example of the contracts?
Thank you for any help you can give us.
Randy Olson

Reply

admin August 10, 2013 at 7:43 am

Hi Randy,

Congrats on your new biz. We’ve got sample docs, forms, and know-how for this. My team is focused on Texas payday ans car title loans.

Call me at 214-293-8676 Michael

Reply

Don Dunlap August 9, 2013 at 2:33 pm

I am brand new at this business idea and would like start up consulting advice

Reply

Anonymous August 10, 2013 at 7:38 am

Give us a call,Don. PH# on my web site

Reply

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Invitation to the OCCC Webinar on June 26th

Invitation to the OCCC Webinar on June 26th

by The CAB Man Texas on June 17, 2014

The OCCC sent out an invitation to Credit Access Business stakeholders today to a Webinar titled “What is a Credit Access Business?”  CAB Consulting has registered for the webinar and we look forward to attending on June 26th at 2pm CST.

Here are some of the topics that will be covered:

– Review of Licensing Requirements
– Review of the CAB Structure
– Review of Required Forms and Disclosures
– Review of CAB Quarterly and Annual Reporting

If you are interested in participating in the webinar, here’s the link to the Registration Page:  https://www4.gotomeeting.com/register/835753311

Space is limited to 100 attendees so act quickly and get registered!

 

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The infamous and continuously failing Texas Payday Loan City Ordinance.

The infamous and continuously failing Texas Payday Loan City Ordinance.

by The CAB Man Texas on August 22, 2017

Since Texas cities began passing the infamous and continuously failing Texas Payday Loan City Ordinance there has been a decrease of 1,300 or so licensed locations inside the State.  According to the most recent OCCC licensee totals, this represents a 37% market shrink.  The results have been a shuttering of businesses in Texas, a loss of thousands jobs, a loss of real estate rents, and decrease in property tax revenues.  Rates have increased 12% in Ordinance cities and demand for unsecured short term credit has largely remained the same.  This is a cold hard truth that was laid out in City Council meetings when we were asking for a “No” vote on the Ordinance.  Is an “I told you so” in order here?

2017 has been a rough year for the Ordinance though, many cities are now bucking the trend and have voted the Ordinance down.  As well, the City of Austin got the double slam-dunk in their simultaneous loss to Speedy Cash and Advance America City Ordinance lawsuits in April.  Those two cases were around a year in the making I wonder if the taxpayers of Austin feel good about the time and expense the City put into an issue that results in a .000153% complaint to loan ratio for Texas residents?  I live in Austin and things are tight budget-wise in this City, despite all the stories you hear about growth it has some problems that should be commanding the attention of city leadership other than the payday industry.

So here comes the next whammee – I was reading over the OCCC’s 1st quarter MSA report for 2017 and it says that 10 of the 2,200 reporting licensees generated 33% of the single payment loan volume, and get this, those 10 licensees were OUT OF STATE!  As far as installment loans go in Texas, 16 OUT OF STATE licensees funded over 37% of the 271,189 installment loan and refinance transactions in the 1st quarter of 2017.  Yes, these are out of state online lending companies who are licensed to do business in Texas but are not within the jurisdiction of any City.  That makes them free to let the market decide and boy did the market ever decide.  On either of the products mentioned – the out of state licensee group was the largest “market” in Texas.  The next biggest markets down were Houston and Dallas but it wasn’t even close to the out of state operators.  Check out the report for yourself below.

Here is a link to the MSA report: http://occc.texas.gov/sites/default/files/uploads/reports/cab-q1-msa-2017.pdf

Imagine if the Payday Loan City ordinance did not force the closure of all of those locations in Texas!  All of that businss would be taking place here in Texas.  Kudos to the online guys who are meeting the need but for obvious reasons we need to work to get those customers back!  I bet the OCCC wishes they had that extra $800,000 per year in licensing revenue.  And how about that $300,000 per year in contributions to the Texas Educational Endowment fund that is now lost?

The full ugliness of the Payday Loan City Ordinance is now beginning to show in the light.  Please pass this information along to your City Council the next time this issue comes up in your market – we are positioned to deliver the facts to them quickly and efficiently so that they can have the full story and move on to the next issue which will be much more meaningful, no doubt!

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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Bank Fees are rising and so is use of Alternative Financial Services – coincidence?

Bank Fees are rising and so is use of Alternative Financial Services – coincidence?

by The CAB Man Texas on August 14, 2012

I was reading this CNN Money.com article today: http://money.cnn.com/2012/08/13/pf/bank-fees-rise/index.html

This is an issue that I am very familiar with and the result is more customers for Texas Credit Access Businesses.

Monthly service fees on accounts with balances below $5,000 are the banks targets for the monthly service charges, which certainly fits the low and middle income profile of the typical payday consumer. And, don’t forget that NSF and Overdraft fees at many banks are have drifted up into the $35-$40 range.

Options like pre-paid debit cards are becoming more attractive compared to the bank branch, and in many cases the pre-paid cards offer more ideal online account management and smart phone capability, all with lower monthly service charges.

Consumers are learning there are more convenient and less costly options out there, and a migration towards cutting edge alternative financial services is happening. Shape your business accordingly, get creative, and stay convenient!

I refer to the information below very often in conversations – it is published by FISCA and illustrates the real deal on banking related charges versus payday advances – the APRs are less in many cases! Be sure and have these statistics ready the next time the APR topic comes up – and then nail it.

$100 Payday Loan (14 days) = $22.88 Fee (596% APR)
$100 Overdraft Protection = $29.00 Fee (756% APR)
$100 Bounced Check = $54.87 Fees (1,431% APR)

Sources:
(1) Bankrate.com, 2007 Courtesy Overdraft Study – based on average first draft
(2) Average NSF fee $28.23 (Bankrate.com, 2007 Checking Study), based on average first NSF charge, and average merchant return check fee of $26.64 (2006 CFSA fee survey).

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