The OCCC is all set to report to the Finance Commission this Friday, December 13th.  Below for the key take-aways for CABs offerring payday, installment, and title loans in Texas.  The report will compare September-October 2018 vs. 2019.  The Septermber-October 2019 part of the OCCC “fiscal year to date 2020”).

·         Examinations are down across the board at every license type except Pawn (89 in 2018 vs. 100 this year).

·         OCCC is reporting they are below target on exams and that they have been doing training and certifications.

·         As well, they are heavily focused on an “enterprise” examination of a large CAB that is taking up 20% of their focus / target.

·         CABs went from 13 examinations in the same period of 2018 compared to just 6 this year.   

·         For whatever reason CABs are way below all of the other license groups in terms of the “acceptable level of compliance” which is a term used for how well we are being examined.  We are hovering in the 55-65% range over thre last year whereas everyone else is in the 80-100% range.  This has been the trend since q4 2018 and would mean that us CABs have not been getting examined much and from our perspective many would agree.

·         Investigations – zero so far for payday and title categories in FY 2020 compared to just 1 on a title loan business same period last year.

·         Complaints – 8 in payday and 10 in title compared to 17 payday and 11 in title which is always good to report.

·         CABs are looking very good with their ratio of complaints to total licenses.  We are at .9 of 1,920 licensees which is at the lower end of the spectrum.

Link to the packet: https://www.fc.texas.gov/sites/default/files/2019-12/121319-fc-packet.pdf

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.

Just a reminder for all of you CABs out there – continually review your Consumer Transaction Information Disclosures & Fee Schedules.

Many times throughout the course of the year CAB operators may change their CAB fee amounts or offer different loan products such as offering multi-payment installment loans, payday loans, or auto title loans.  When changes are made and loan  products are dropped, added, or modified, we have seen the Fee Schedule & Consumer Transaction Information Disclosures be overlooked.

Take the time to ensure that your Consumer Transaction Information Disclosures & Fee Schedule are up to date with all of the products you are offering.  This is on the OCCC Examiner Checklist and Examiners will call you out on this.  Be an “A” student and get it right.

Additionally, per Texas Administrative Code 83.5004, if changes are made to your Fee Schedule or Consumer Transaction Information Disclosure, preceded versions must be maintained on site for a period of one year or until the next OCCC examination.

Here is the exact language regarding the retention of amended Fee Schedules & Consumer Transaction Information Disclosures:

For In-Store Transactions:

“In-store fee schedule and notices. The in-store fee schedule and notices required by Texas Finance Code, §393.222(a), and §83.6003(a) of this title must be available for inspection by the OCCC in a conspicuous location visible to the general public. If a licensee amends the in-store fee schedule or notices, it must maintain documentation of the previous versions of the schedule or notices for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. The licensee may maintain the documentation of previous in-store fee schedules and notices at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”

For Online Transactions:

“Website and online disclosures. If a licensee maintains a website, it must make the website available to the OCCC for inspection. The website must include a fee schedule to show the licensee’s compliance with §83.6003(b) of this title, and applicable consumer disclosures to show the licensee’s compliance with §83.6007(f) of this title. If a licensee amends the website’s fee schedule, consumer disclosures, or method of accessing the fee schedule or consumer disclosures, the licensee must maintain documentation of the previous version of the website to show compliance with §83.6003(b) of this title and §83.6007(f) of this title. This must include the home page, any pages used in accessing the fee schedule and disclosures, and copies of the previously used fee schedule and disclosures. The licensee must maintain this documentation for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. This paragraph does not require a licensee to maintain previously used pages of the website that were not the home page or pages used in accessing the fee schedule and consumer disclosures. The licensee may maintain the documentation of previous versions of the website at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”

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.

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.

Our friend ROb Norcross at CSAT sent over some really good details that he had gathered in response to the OCCC issuing advisory bulletins to licensees on how to remain in compliance while dealing with Harvey aftermath.  I scraped some of those details and organized them below for CAB stakeholders in Texas, and business owners in general that were affected by Harvey.

CAB Consulting and TOFSC have clients and Members in the Coastal region and many were impacted – see below!

“The Texas Office of the Consumer Credit Commissioner issued an advisory bulletin reminding pawn shops of their obligations in statute and rule about safeguarding pledged goods, record retention requirements and relocating to temporary locations (see link in the email below). 

There are no similar provisions in Texas Finance Code Chapter 393 for credit access businesses. Sections 83.308 (b) and (c) in Title 7, Part 5 of the Texas Administrative Code addresses the relocation of transactions from one store to the other Section (c). Section (b) contains the notice requirements for customers and to the OCCC. Section (c) also provides for a waiver of the 5 day notice period by the Commissioner in cases of emergency. 

If one of your stores is damaged, and you choose to send customers to other nearby stores, please take care to follow these procedures. The provisions of your contracts with your customers will govern issues related to due dates, fee calculations, etc. 

The Code prohibits the relocation of a CAB store unless 30 days’ notice is given to the OCCC. There is no waiver provision for an emergency. However, if one of your stores — that is not near another store — is damaged, please contact the OCCC if a temporary location is the only reasonable solution to protect your customers. Despite the absence of a waiver provision in the statute, the OCCC has made reasonable accommodations to protect consumers with all types of licensees in the case of emergency. 

County Sheriff’s Office

If one of your employees has a question about local hurricane relief activities, law enforcement procedures during/after a hurricane, customers applying for federal assistance, shelter availability, etc., please do not hesitate to contact the local county sheriff’s department. Sheriff’s offices are a critical source of information during disaster recovery efforts. They are trained to navigate the varying levels and overlaps of local, state and federal bureaucracy and often serve as a counties’ switchboard during disaster recovery.

Do not spend hours on the telephone being transferred from FEMA official to FEMA official — call your local county sheriff’s office. They will (literally) tell you where to go…

 IRS Extends Filing Deadlines for Hurricane Harvey Victims

The Internal Revenue Service is giving Hurricane Harvey victims extra time to file individual and business tax returns and to make certain tax payments in 18 Texas counties because of the “devastating storm.” Businesses and individuals affected by making quarterly estimated tax payments on September 15^th and January 16^th now have until January 31^st to file tax returns and pay taxes that were during those times. 

Vehicle Titling and Registration Requirements Suspended 

Texas residents in counties impacted by Hurricane Harvey will not have to worry about vehicle titling and registration requirements for the next 45 days. Governor Greg Abbott suspended certain statutes related to the enforcement of title and registration laws in the 58 counties included in the state’s disaster declaration. 

Customer Inquiries to the OCCC

We are working closely with the Office of the Consumer Credit Commissioner to help them process questions received from customers efficiently. Every CAB transaction contract, and most disclosures, include the name, telephone number, and the email address of the OCCC. 

Every time a consumer makes a complaint to the OCCC, the agency is required to open a file, contact the consumer, contact the CAB/lender, make a determination about a resolution for the complaint, and notify both parties in writing before closing the file.

However, after natural disasters, the agency typically receives questions from consumers in addition to complaints. If your company would like to designate a point person to address questions the OCCC may receive from your customers, please let me know. 

We will give the OCCC the name, telephone number and email address of your designee so the OCCC can refer questions directly to you. We want to give the OCCC every incentive to treat as many inquiries as questions, and not complaints (and staff prefers to open as few complaint files as possible). 

Texas Association of Business Hotline

TAB has established a hotline for businesses to connect to the resources they need as rebuilding begins. The hotline number is 512-637-7714. The hotline is available to all businesses. It is not limited to TAB members. You can also sign up to provide services as rebuilding begins in southeast Texas. For more information, visit: www.texbiz.org/2017/08/25/hurricane-harvey/.”

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.