Notices and Disclosures for use in Credit Access Business Operations
Notices and Disclosures for use in Credit Access Business Operations
In addition to the provisional license, last Friday the OCCC worked to get rules for the Notices and Disclosures approved. The rules, referred to as “7 TAC 83.6001-7 TAC 83.6008,” define the many ways in which a Credit Access Business is required to disclose particular information to consumers regarding the potential loan they are about to apply for, or for the actual loan that consumers agree to.
There are procedural requirements that a Credit Access Business address the nature of the transaction and possible alternatives to this service before the customer completes an application. Also, the customer must acknowledge they have received these disclosures.
Considerable time has been invested in the development of several documents the OCCC advises Credit Access Businesses to use that are compliant with the law, and accomplish the goals of House Bill 2592. Focus groups have reviewed the documents, and feedback was provided that shaped the final versions. In the future it is likely that continued feedback from focus groups will shape these “dynamic” documents in a way that makes sense to all Credit Access Business consumers and stakeholders.
According to the OCCC, there is only one other state in the U.S. that has something similar or nearly as comprehensive. The process of collaboration between the OCCC and industry stakeholders appears to have resulted in an exceptional set of detailed disclosures, which should please lawmakers and consumer advocate groups. Fair regulations were passed, and rules were developed to implement the new State of Texas laws. This high level State government achievement in should be made note of at the local level. Knowing that such thorough systems are in place, city governments can now move on to more important topics like job creation and budget balancing.
The documents, which focus on single and multi-payment payday and title loans, are available through the OCCC website. CAB Consulting and Brokerage is also in possession of the documents. We are distributing them to clients, building familiarity with their intent, and drawing clarity from a 15 page two column set of rules.
If you have questions or would like to discuss, please contact CAB Consulting and Brokerage at 214-293-8676, or via email at cabconbrokerage@gmail.com
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Auto Title Loan Business Acquisition Opportunities on the Rise
Auto Title Loan Business Acquisition Opportunities on the Rise
Auto title and payday loan business acquisitions are on the up, and demand is mounting as interest to expand business through existing locations continues to grow.
C.A.B Consulting and Brokerage is seeing this first hand and is further extending its brokerage efforts to fulfill demand with the sale of three Texas auto title loan locations: a dual location Houston-area business; and a single location Dallas-area business.
Located in the Houston Metro area, the first auto title loan acquisition opportunity includes two locations, both situated in a prime strip center setting. The first location is an 800 sq. ft store with an affordable lease and no competition for miles. The second 1500 sq. ft store is in a preferred location with no competition in the immediate area. Leases have desirable terms, positive landlord relationships, and include no restrictions. Each turn-key location was built brand new two years ago and includes all furniture and office essentials. Both locations have their CAB license and have an ideal third party lender in place. Currently set up as an auto title loan business, these locations have the infrastructure in place to easily add payday loan services. The buyer is motivated and accepting offers for sale.
The second auto title loan acquisition opportunity is an established Dallas-area business. After six years, the business has established an ideal fee structure proven to be agreeable to customers that has resulted in consistent revenue and low defaults. The prime location is situated near a highly trafficked intersection in the Plano area. The lease has desirable terms, a positive landlord relationship, and includes no restrictions. The business has its provisional CAB license and a qualified third party lender in place. The location is currently set up as an auto title loan business, but includes the infrastructure to easily add payday loan services. The seller is seeking an immediate buyer and is accepting offers for sale.
C.A.B Consulting and Brokerage is brokering multiple sales of auto title loan and payday loan locations throughout Texas. Contact C.A.B. Consulting and Brokerage to sell your current auto title loan or payday loan business or learn more about acquiring businesses for sale.
Contact Michael Brown, principal of C.A.B. Consulting and Brokerage, at 214.293.8676.
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October 30, 2013 at 10:16 am
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There is no need to run a new credit history verify after you make application for an automobile title loan because it will be based upon the significance on the automobile. Car title loans are usually secured motor finance, which means that upon finalizing your own loan that you are affixing your signature to over your own car’s title towards bank. They then keep this title throughout the period on the loaning period.
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Interesting development on the subject of the so-called Payday Loan City Ordinance
Interesting development on the subject of the so-called Payday Loan City Ordinance
The Austin American Statesman put out an article this week (“Senate votes to limit city regulations on private businesses.”) that discussed two bills in the legislature that were about to be passed by the Senate. The bills, SB 2486 and SB 2488, will limit local government control over private businesses. It appears the bills are directly focused on employer issues like hiring practices and break times.
After hearing some very familiar talking points that support the authority of State law over local ordinances, it stands to reason that the passage of bills like these could lead to better days for Credit Access Businesses offering payday loans, installment loans, and title loans in Texas.
Of course, an Austin City Council Member testified at a hearing against one of the bills. Greg Cesar said one of the bills “disgracefully” preempted local regulations. Let me remind Councilman Cesar of what a disgrace the attempted enforcement of the Payday Loan City Ordinance has been for the City of Austin. They have been involved in two lawsuits for 2+ years against Speedy Cash and Advance America. It has been a back and forth legal battle that has consumed City of Austin resources for far too long and even with all that money and time spent, no victory for Austin. I am sure the residents of Austin would rather have their tax dollars spent on more meaningful subjects. That is the disgrace!
Now that I got a good swipe in against the Austin City Council, I will get back to two strong talking points I saw used. Each of them can be used almost as a mirror image in the argument for preemption of the Payday Loan City Ordinance by existing Texas law.
“One comment dismissed concerns over water breaks and work environments, stating that the Occupational Safety and Health Administration already regulates workplace safety.” (This is exactly the same scenario with Credit Access Businesses – we are already regulated by the Office of Consumer Credit Commissioner).
Senator Creighton said: “I believe in uniformity across the state for the applicant and also for the employer, and it should happen in this building.” (This really applies to any business in Texas with more than one location. Operating Credit Access Businesses in a City with an Ordinance and one without an Ordinance causes operational confusion and customer inconvenience).
At this point I believe that many Cities in Texas no longer look at passing the Payday Loan Ordinance because they know if they pass it and enforce it they will be looking at allocating several years’ worth of time in lawsuits over it. So that addresses the further spreading of the Ordinance. In terms of rolling back existing Ordinances across Texas, perhaps there issome opportunity ahead where the passage of these two bills creates the precedent for leaders in our industry to get that done!
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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Texas Credit Access Businesses are making major contributions to the Texas Financial Education Endowment “TFEE” Fund
Texas Credit Access Businesses are making major contributions to the Texas Financial Education Endowment “TFEE” Fund
In an earlier blog the CAB license renewal deadline was addressed as it is coming on January 31st. It is very much worth mentioning that each year when the CABs across Texas pay the renewal fee of $800 per location, that $200 of that goes to the Texas Financial Education Endowment Fund (http://www.tfee.texas.gov/). It appears that 2,125 CAB licenses will be renewed this year and that comes to $425,000 in contributions to the fund!
In years past there have been as many as 3,500 CABs so that would have meant that $700,000 was contributed for that given year. CABs have been contributing to the fund since the CAB law went into effect in 2012 so 2017 will be the 6th year. CAB renewals fluctuate but it is safe to say that $2-$3 million has been put in to this fund by Texas Credit Access Businesses.
“The Texas Legislature established the Texas Financial Education Endowment (TFEE) to support statewide financial capability and consumer credit building activities and programs. The endowment is funded through assessments on each credit access businesses and is administered by the Finance Commission of Texas.”
This program is 100% funded by the licensed CAB operators in Texas. As a group we should all be pleased to make contributions towards the kinds of programs that have been given grants through the fund.
One bit of irony worth mentioning is that many of the programs who have received money from CABs are located in cities where ordinances were passed. Goodwill Industries has been strongly opposed to our industry however they gladly received $32,000 from us in Austin! I have personally seen them testify at City Council meetings in support of the ordinance. Their testimony is typical in that had a very narrow, negative, and uninformed set of talking points. Not only does Goodwill support the city ordinances but they join the argument that CABs take advantage of low income citizens. Well in the case of the $32,000 grant, they took money money from low income citizens. And, the participated in a movement that caused businesses to close (about 1,300 across Texas), people to lose jobs (2 per store would be 2,600 jobs gone), and after all of that the rates in ordinance cities went up 12% because of burdensome regulation. Less competition hurts the consumer, once again…
For more information on market changes related to ordinances please go to the OCCC’s website and review the MSA reports for the last several years: http://occc.texas.gov/publications/activity-reports#cab
As for the good news – Texas Credit Access Businesses should get more positive attention for the impact they have on programs that do good for others, see below for some of the grant recipients:
K-12 Financial Education & Capability:
Texas Council on Economic Education – $32,000.00
Financial Coaching:
Family Pathfinders Tarrant County – $32,000.00
Community Development Corporation of Brownsville – $32,000.00
Adult Financial Education & Capability:
Goodwill Industries of Central Texas, Inc., Austin – $32,000.00
Easter Seals of Greater Houston, Houston – $32,000.00
Texas State Affordable Housing Corporation, Statewide – $32,000.00
El Paso Credit Union, Inc., El Paso – $25,000.00
Family Service Association of San Antonio, Inc., San Antonio – $32,000.00
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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