CFPB Basics

If you have not already, many of you may begin to hear about the “CFPB.”  The “CPFB” stands for Consumer Financial Protection Bureau.  This is a federal agency that was created in the aftermath of the US Economic Meltdown in 2008-2009.  The government felt that it was necessary to create this new bureau to monitor a broad range of businesses that contributed to the problem by not behaving in an appropriate manner, violating the law, or taking advantage of consumers.

“The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”The 3 priorities of the CFPB will to be Educate, Enforce, and Study.”

The scope of the CFPB will include the Payday Loan and Auto Title Loan industries.  It is a possibility that our industry will be faced with regulations on local, state, and federal levels.  The CFPB held a field meeting in Birmingham last week and has released an “Examination Procedures”document that illustrates how they plan to go about reviewing industry businesses.

If you would like to review the Examination Procedures document, it is available online, or you may request a copy from CAB Consulting and Brokerage.  Also, if you would like to view an intro to the Field Meeting last week, you can do so here: http://www.consumerfinance.gov/getting-a-complete-picture-of-the-payday-market/

Right now we are all focused on getting our new CABs off the ground and implementing new notices and disclosures.  Set your sights on the CFPB next quarter and take some time to become familiar with it.  CAB Consulting and Brokerage is gathering facts and will continue to provide information as it becomes available.

If you have questions, please feel free to call Michael Brown at 214-293-8676, or email cabconbrokerage@gmail.com

Wanted to get some dialogue going on the Dallas Payday Loan Ordinance, I have one client with stores in Dallas proper who I am looking at it with.  Talked with some other folks who have a position within city limits and also talked to City of Dallas, have a call into some council members as well.

Here’s what I know:

Last year the City of Dallas passed an ordinance that attempts to regulate Payday Loan businesses.  This was passed within a week of the Texas laws related to Credit Access Businesses, and at that time a trade group named CSAT which is comprised of several of the larger players in the market filed an injunction.  I have not been updated on the injunction since last July.   Dallas is moving forward and has licensed 20 businesses, another 18 are pending.

Some basics of the ordinance that supposedly went into effect on January 1:
-Get a permit, pay $50
-Cannot loan more than 20% of gross monthly income on Payday Loans
-Auto Title Loans cannot exceed 3% of gross annual income
-Installment programs no more than four payments, must paydown 25% of principle with each payment
-Refinances are limited to 3
-Loans made less than 7 days after a payoff are considered a refinance
-Max of $500 for violations

My opinion  along with many others is that the Dallas City Council / City of Dallas is exceeding their jurisdiction when citing restrictions on the ways in which a business can offer its products or services.  The OCCC has done an excellent job with implementing the new CAB program and they are well equipped to do so.   Dallas, ahem, not so much.

Today in the news it came out that CFSA and Advance America filed suit to end Operation Choke Point.  Many CAB clients have endured a direct hit and have lost their deposit accounts with banks such as Wells Fargo.

The bad news that the depository account was being closed usually came in a very bland statement like this:  “Wells Fargo is no longer doing business with companies in your industry.”  No explanation as to why, only a letter and a deadline for the CAB to make other banking arrangements.

I am pleased to see that formal legal action is being taken to terminate this tactic from being employed any longer.  See the attachments for detailed information on what Operation Choke Point is, and for more details on the suit!

CFSA and Advance America File Lawsuit To End Operation Choke PointCommitte on

Oversight and Government Reform_Staff Report_Operation Choke Point

What is your opinion on this subject?  Submit comments or contact Michael Brown of CAB Consulting at 214-293-8676, or via email at Michael@CreditAccessBusiness.com.

Today invitations to the 5th Annual TOFSC Conference are being sent out to Members, Sponsors, and Vendors, requesting their attendance starting at 10am on Wednesday 9/14.

We have chosen the Hyatt Regency Lost Pines for the venue this year, which is situated 20 minutes east of the Austin Bergstrom Airport near an 1,100 acre nature park called McKinney Roughs.

It is going to be a great setting and as always a great occasion for us to build relationships and do some learning.  Members are already sending in their attendance forms.  See below for links to the forms:

For Members: TOFSC.Conference.Invite.2016.Members

For Vendors / Sponsors: TOFSC Conference Invite 2016- Vendors

If you have any questions call or email Michael Brown, President of TOFSC, at 214-293-8676, or email him at: Michael@CreditAccessBusiness.com.