This bill was authored by Pickett, and is “relating to limitations on the renewal of deferred presentment transactions and motor vehicle title loans.” The primary goal of this bill is to decrease the options a consumer has, and restrict the ways in which they might be able to re-finance a loan. Section 1 of the bill addresses Chapter 342 which is primarily for ” Regulated Lenders” versus CAB’s who operate under Chapter 393 of the Texas Finance Code. The bill would restrict the the “lender” from allowing a consumer to “rollover” a loan more than 4 times. A rollover is defined in this rule as “a refinancing or paying of all or part of the finance charges and cash advance of a deferred presentment transaction with a new deferred presentment transaction.”

Section 3 of HB 1715 is relating to Chapter 393 and CABs. The bill would limit rollovers to 4 as it also does with Chapter 342 loans. The way the rollover is defined is the same as above, which is different from the most common definition in the industry. A “rollover” traditionally has referred to the scenario where a consumer opts to pay interest and fees only with no payment towards principal, instead of paying off the loan as originally agreed.

“Rollovers” do not typically occur when there is an amount of principal that is paid down in addition to the interest and fees that are due that day. This is Pickett’s new definition, the key difference lies in the phrase “all or part of the finance charges or cash advance.” Would go into effect 9-1-2013.

Click here for a PDF of HB 1715! HB.1715

HB 3033:

This bill was authored by Rodriguez of Travis County, and is “relating to the confidentiality of information contained in credit access business license applications.”

HB 3033 wants to amend Section 393.604 of the Texas Finance Code, which is the section of the code that outlines what information will be needed for the application with the OCCC for a Credit Access Business license.

The proposed amendment would make the information contained in the CAB applications public. In late 2012, Texas Appleseed attempted to access Third Party Lender application information contained on Schedule B of every CAB application. Schedule B contains the name, phone #, and address of the Third Party Lender(s) for each licensees location.

There was some push back by CABs and Third Party Lenders to the Texas Appleseed request, and the release of some of the information is still pending. It is apparent that the information is being sought after through legislative methods rather than simply viewing the contracts that are in use with consumers.

Would go into effect on 9-1-2013.

Click here for a PDF of HB 3033! HB.3033

HB 3019:

This bill was authored by McClendon, and is “relating to certain extensions of consumer credit facilitated by a credit access business for certain military personnel or their dependents.”

The bill aims to sharpen the language and definitions related to CAB transactions with members of the Military and their dependents. HB 3019 wants all CABs to be compliant with the spirit of 10 USC Section 987 and any regulations adopted under that law.

There is some language in the bill dedicated to those who are “covered members” or a “dependent” of a covered member, and that to those which 10 USC Section 987 applies there are new limits on how they may be loaned to. Loans to Military borrowers cannot be go over 90 days as a deferred presentment/payday loan and cannot go over 180 days on an auto title loan. The 90 & 180 day rules for payday and title loans are the same across the board for covered members, members of the military, and dependents of military, and members of the reserve component of the US armed forces. A “dependent” is defined in the bill as a spouse or child of the member.

Would go into effect on 9-1-2013.

Although we are all hopeful the proposed CFPB rule will unravel in the near future, the CFPB action against Moneytree is a good reminder that we can at any time be examined by the CFPB in the same way that the OCCC can show up at our stores at any time.

Specific to this particular action was collections and advertising.  The information on www.CFPB.gov stated that there were “deceptive online advertisements and collections letters.” And that “the company also made unauthorized electronic transfers from consumers’ bank accounts.”

CFPB has ordered the company to cease its illegal conduct, provide $255,000 in refunds to consumers, and pay a civil penalty of $250,000.

What did the CFPB say Moneytree did wrong?

§  “Used deceptive online ads: In early 2015, Moneytree ran advertisements online offering to cash consumers’ tax refund checks for “1.99.” The actual fee for the service was 1.99 percent of the amount of the check cashed, rather than $1.99, as the company’s advertisements implied. Consumers were required to visit one of Moneytree’s physical branches to take advantage of the advertisement’s offer, which appeared online tens of thousands of times.”

§  “Deceptively told consumers their vehicles could be repossessed: From late 2014 through early 2015, Moneytree mailed letters to hundreds of consumers indicating that their vehicles could be repossessed if they did not make past-due payments on their installment loans. But none of these consumers had loans secured by their vehicles, and Moneytree had no right or ability to repossess them.”

§  “Withdrew money from consumers’ accounts without authorization: Moneytree failed, in over 700 instances, to obtain pre-authorization from consumers for withdrawals from their bank accounts, in violation of federal law.”

What are the take-aways?

Advertising:  As an owner of your business ALWAYS read the final proof of all advertising and distribute the policy on a campaign in writing to your team, communicate the policy verbally as well so that emphasis can be made in areas where necessary.   Think critically about how a statement can be interpreted on your advertising materials, ask yourself “If a regulator who wants me out of business reviews this how else could this advertising copy be interpreted to be accurate or to be misleading?”

Collections:   I am not sure if this was an error or if it was intentional that Moneytree sent letters to debtors saying they were going to repossess their vehicles if they did not pay their unsecured loan off.  I am going to assume that this was an error I really have not met anyone in the last (5) years of consulting that would do that kind of thing intentionally.  As an owner of your business make sure to review and approve collections letters as they go out.  Collections (and in particular repossession) is a risk laden mine field on the regulatory front.  There are too many instances of fines occurring due to internal error in Collections not to make sure you keep an extra close eye on this crucial part of every business.

ACH or Debit Card authorizations: Everyone must get an ACH or debit authorization for every transaction.  Only debit the amount(s) due per the agreement and payment amounts must match what is on the payment schedule.  Most know this, but often times the employees get bogged down or too busy and these errors occur.  An automated e-sign process helps this as signature lines are less likely to get missed.  If you do not have the authorization signed, it could be deemed “illegal.”

Link to story: http://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-moneytree-deceptive-advertising-and-collection-practices/

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.

Pretty big news coming from CFPB and Cash America today, $19 million in refunds and fines laid down on Cash America. $5 million of the $19 million is penalty and the remainder will be refunds of fees paid by consumers.

Cash America apparently violated some debt collection rules and also had some improper internal behavior where they were attempting to hide information from CFPB. I believe most of the activity occurred in Ohio.

This is the first major action by the CFPB and a number of papers across the United States are featuring the story. I would recommend that we all stay on top of the CFPB topic. I watch them out of the corner of my eye and know it could be a major concern in the future.

Here’s a link to the article on the front page of The Dallas Morning News: http://www.dallasnews.com/

For the benefit of those who read our posts we are sharing a snapshot on the progress of a five-location retail chain’s Search Engine Marketing Campaign after six months.  This particular business offers cash advances and title loans in the Central Texas area.  What do you think?  Is it doing well with SEO? Room for improvement?  How about your title loan or cash advance business?  Is it doing better or worse?  

The results shared here are what will net a business 148 online applications in one month which was the actual April 2019 total.  It could and probably will be higher in future months because this time of year traditionally is the lowest in demand.  That being said, right now this cash advance and title loan business is achieving some of its best results since starting the SEO campaign in late September 2018. 

The SEO team at Hearst Media Services, 
https://hearstdms.com/localedge/tofsc (contact Ahmed Khalaf and team!) is handling this campaign and provides monthly reports that summarize where the business is at in a number of ways, what changes are made by them for you to improve, etc. 

Statistics that were reported for April:

·         43,000 impressions.

·         588 clicks.

·         148 online applications.

·         Online traffic has increased 20% since starting the SEO campaign in September 2018.

·         Cost broke out to $6.35 per lead generated.

What are the top sources of traffic?

70% Google, 20% is from actual entry of the website address, 2% Yelp, 2% Facebook, the rest was “others.” 

Comment: No surprises there, Google is king, and everyone needs to max out on this search engine every way they can! Yelp is proving to be a good source too, check them out directly.

What pages are visitors entering on?

Home, then contact us, across the board. Big drop off after that. 

Comment: This tells us site visitors check out the business online, get a feel for it, then look for a phone # to call and get a live person.

What cities are generating organic traffic?

Top 10: Austin, Dallas, Abilene, Houston, San Antonio, Waco, Round Rock, Pflugerville, New Braunfels, San Marcos. 

Comment: Strange to see Dallas and Houston pop up in these stats as the business is not located in those cities.

What search terms are leading customers to the website?

Top 10: Title loans, car title loans, Star of Texas, Title loan, Car title loan, Star loans, Auto title loans, Installment loans company, Installment loans Texas, Title loan near me.

Comment: Surprised that cash advances was not at least half of the top six results here. Not understanding why title loans was so popular.  Is the website more optimized to title loans versus cash advances?

For more information on the topic of SEO for your cash advance, payday loan, or title loan business, feel free to reach out to Michael Brown at the contact below, and to get in direct contact with the real experts call Ahmed Khalaf at 716-541-4174, or email him at akhalaf@hearst.com.

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.

The O.C.C.C. has released the Credit Access Business License! Looks as though it may have been posted online on Saturday, October 29th.  Laurie Hobbs just sent  out an email to the stakeholders this morning so perhaps there were a few more details to square away prior to today.

The printed forms are 12 pages total, comprised of 8 parts.  See below:

• CAB Instructions and Checklist
• CAB Application Form for New License or Transfer of License
• Schedule A: CAB Branch Location(s) Application
• Schedule B: Disclosure of Third-Party Lender Organizations
• Schedule C: Personal Information, Affidavit, and Questionnaire
• Schedule D: Additional Requirements
• Schedule E: Personal Financial Statement
• CAB Consent Form

I am in the process of reviewing the Application documents and will provide more feedback soon.  You can access the information by going to: http://www.occc.state.tx.us/pages/industry/CAB/Forms.html

If you have any questions, as always feel free to reach out to Michael Brown via phone at 214-293-8676, or email at cabconbrokerage@gmail.com.