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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The Houston Chronicle is dabbling in the in Payday and Title Loan conversation again

The Houston Chronicle is dabbling in the in Payday and Title Loan conversation again

by The CAB Man Texas on June 20, 2017

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.

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Silicon Valley FinTech “Earnin” may need to buckle up for a bumpy ride.

Silicon Valley FinTech “Earnin” may need to buckle up for a bumpy ride.

by The CAB Man Texas on September 11, 2019

The New York Times ran a bit of an “expose” on “Earnin,” an online lending FinTech that may need to buckle up for a bumpy ride…

It seems like each week there is a new Silicon Valley FinTech anti-payday loan venture that is launched with millions in funding and all the slick PR you can buy. There is a formula to the launches, and most have the disruptor mindset but at first glance to many observers, it is clearly a well disguised online payday loan business. It was stated in the Post’s article that Earnin has an $800 million valuation – how much of that do you think came from being hyped by the media? Funny thing is, much of the media that promotes these startups don’t do their homework and would tell you they despise the payday industry if you asked them. Imagine that!

Earnin has been around for several years now and the “tip” model they use is now coming into question. They don’t charge a fee for the loan they just say “tip us if you liked it” or something along those lines. The New York Post says Earnin “has been scrambling to escape regulatory heat over concerns that it has been doing illegal payday lending in the Big Apple.”. It was surprising to read that the tips being collected were $14/$100 per week.  That comes to $28/$100 for two weeks. In Texas the average fee range per $100 borrowed is $20-$25/$100 so that tip is really popping up on some radars now. When you calculate the APR on $28/$100 that is getting into the 600%+ APR range which will typically cause a left leaning liberal with consumer advocacy on their mind to simultaneously combust.  
 
Now, the New York Department of Financial Services appears to be one of those who are very hot under the collar over Earnin doing transactions with New Yorkers. As well, 11 other states are investigating Earnin for violating usury laws. New York sent a subpoena to Earnin in March, shortly after that the tip feature was turned off for New Yorkers. Earnin is now having to explain the switch off, and that loan amounts were not driven down by poor tippers which looks very bad. There were some leaks from former employees apparently. In one of those leaks “Earnin also considered going after perceived enemies. One employee suggested the company hire a private investigator to look into The Post reporter who had written the story” about them. Whoa – this is getting good!

We’ll see how it all plays out, Earnin seems to be getting lined up for a major hit on the chin for other FinTech lending disruptors with similar shell game models. Those who are out in front as Earnin has been, often times are going to have to survive the legal battles to prove out the model while others who are not quite so visible, lay low and quietly ride out the process.

Here is a link to read more from the New York Post:

https://nypost.com/2019/09/01/cash-advance-app-earnin-changes-its-tune-amid-nys-probe/

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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Is the “Dallas Payday Loan Ordinance” for real?

Is the “Dallas Payday Loan Ordinance” for real?

by The CAB Man Texas on April 25, 2012

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.

 

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CFSA and Advance America file suit to end Operation Choke Point

CFSA and Advance America file suit to end Operation Choke Point

by The CAB Man Texas on June 6, 2014

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.

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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 Organization of Financial Service Centers (“TOFSC”) Conference is 9/14

Texas Organization of Financial Service Centers (“TOFSC”) Conference is 9/14

by The CAB Man Texas on August 11, 2016

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.

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What is the CFPB? Have you heard about it?

What is the CFPB? Have you heard about it?

by The CAB Man Texas on January 24, 2012

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

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Thank you for visiting Credit Access Business.com !

Thank you for visiting Credit Access Business.com !

by The CAB Man Texas on August 1, 2011

Are you a Texas CSO that is hungry for more information on the new license you’ll need by January?  You’ll need to evolve your CSO into the OCCC’s “Credit Access Business” model and we want to assist you in doing so.

Michael Brown may have contacted you or will be contacting you in regards to our Credit Access Business services.  Our areas of focus are Compliance, Capital, and Collections.

CAB Consulting and Brokerage Goals:

#1 – Learn more about your business and its unique needs.

#2 – Create a step by step plan to get to you compliant.

#2 – Provide you with options for operating Capital and 3rd Party Lenders.

#3 – Improve your Collections processes, and buy your Bad Debt.

We recently attended the OCCC stakeholder meetings and Austin and are informed on what is to come.  CAB Consulting and Brokerage is contacting CSO’s in Texas right now to share what we know, learn their needs, and discuss how we may be of service.

Please contact Michael Brown at 214-293-8676 to learn more today.  Or, email Michael at cabconbrokerage@gmail.com.

Thank you again for visiting Credit Access Business.com!

 

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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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