Act now to get your Credit Access Business License!
Act now to get your Credit Access Business License!
Spent last week traveling all over Texas visiting with new and existing clients, also went to the OCCC offices for two meetings. Still trying to get caught up as of today, it is important for blog readers and site visitors to know a variety of things as January 1, 2012 is just 11 days from today.
Something I want emphasize heavily: if you are a CSO with existing business and you have not begun the application process, contact CAB Consulting and Brokerage or the OCCC immediately. I am getting calls from business owners who are not fully aware of the situation or have not completed the application. The deadline for licensing is January 1, 2012. If you do not have a license in hand on that date, your CSO should not be offering payday or title loans.
You have options if you are late in the process. The Texas Finance Commission voted on Friday to allow for the creation of a provisional license for Credit Access Business license applicants. If your CSO has not submitted an application as of now you will need to seek a provisional license. The OCCC is working intensely and is still processing CAB applications that were submitted well ahead of the deadline.
If your business does not have a license or provisional license in hand on January 1, 2012 and you are operating you could be subject to fines.
I have more information about this and can help if you have questions. Feel free to call Michael Brown at 214-293-8676 or email cabconbrokerage@gmail.com.
If you wish to contact the OCCC directly on the matter, you can reach them at 512-936-7600.
The OCCC is seriously focused on Credit Access Business Examinations right now – are you ready?
The OCCC is seriously focused on Credit Access Business Examinations right now – are you ready?
Over the last several weeks there has been a significant uptick in OCCC examinations of our Credit Access Business friends and clients. Are you ready for the OCCC to walk in your door? Chances are if you are a member of TOFSC or if you are a client of of CAB Consulting you are in a good position regarding software, APR% calculations, loan contracts, disclosures, and fee schedules.
That being said it is always good to get refreshers on where the OCCC may be looking the next time you come due for an examination. If you are in DFW, East Texas, or Houston I would make sure that you are ready to rock!
See below for some recent areas of emphasis:
- TILA – is your APR% exact? Are you off slightly? Needs to get fixed asap if you are even slightly under-quoting. Contact your software company ASAP.
- Financial Privacy Act Notices – are the ones in your document package proper?
- Credit Services Disclosure Statement – regarding the time frame consumer have to ask for information – are you quoting the proper number of days?
- Updated OCCC Contact information – there was a change awhile back on this. Did you update it?
- OCCC Notice – must be plain to see and easy to find 1-click from the home page of your website.
- Interest paid or to be paid to lender – this must also be disclosed on the Credit Services Agreement.
- When selling a motor vehicle that has been repossessed – how many bids are you getting?
If you would like additional information on these areas feel free to reach out!
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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(3) bills already posted ahead of the 85th Texas Legislative Session
(3) bills already posted ahead of the 85th Texas Legislative Session
The 85th Texas Legislative Session starts on Tuesday, January 10, 2017. At this point, (3) bills have been posted ahead of the session. See below for information on the bills as well as a few comments.
Ramon Romero (D): HB 60
Relating to requiring a credit access business to verify the vehicle identification number used to obtain a motor vehicle title loan. Before obtaining a title loan for a consumer, to physically inspect the vehicle used as collateral, photograph the vehicle identification number, and verify that the number matches the number on the title provided by the consumer. Requires the CAB to retain the photograph until the second anniversary of the date the extension of credit is made.
Comments: This really is something that any decent operator will do anyway. Not sure why additional regulation is needed here. CABs have a very long list of regulations they abide by so why is Mr. Romero wanting to add more?
Matt Schaefer (R): HB 153
Relating to the authority of a municipality to regulate occupations. Prohibits a municipality from adopting any ordinance that: (1) establishes additional, more stringent licensing requirements for an occupation that requires an occupational license issued by a state licensing authority, or (2) requires a person to obtain an occupational license issued by the municipality. Provides that any ordinance violating this prohibition is void.
Comments: Anything that will void the city ordinances related to payday, installment, and auto title loans makes sense. The city ordinances have caused over 1,500 businesses to close and have caused thousands of people to lose their jobs who worked at those stores. With the increased cost of doing business that resulted from trying to survive the ordinances, CAB owners had no choice but to increase rates and that has hurt consumers – it was that or go out of business.
Diego Bernal (D): HB 197
Relating to contracts and other documents issued by credit access businesses. Requires the contract and other documents provided by a CAB to be: (1) provided before signing written in both English and Spanish, (2) written in plain language, and (3) printed in an easily readable font and type size. Requires the Finance Commission to adopt rules implementing this provision. Requires the CAB disclosure and notice to be available in both English and Spanish at each CAB business location.
Comments: CAB consumer loan document packages are typically 25 pages – if you have to create document package in both languages that will be 50+ pages of documents, tons of ink, paper, and toner. That will mean an increase in costs and slower processing times which will be a major concern for business owners and an inconvenience for the customer, and likely even higher rates. Who decides what “plain” language is? Will all the current document packages have to be re-written? What is “reasonable” font size? I know 12 point font is required in the TILA disclosures but due to all the regulations and other disclosures that are required to be provided, CABs (and other entities like banks) need to shrink font as small as possible so the documents aren’t too long. (remember 25 pages+ to start). If you go 12 point font on a document that is mostly 8 point font it is going to cause the document to double in size. 50 pages in English, 50 pages in Spanish! And, the CAB has to make copies of the signed loan documents for their files so that becomes 200 pages! All that for a $300 loan? If this one passes we should all get into the paper, ink, and toner business!
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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Investment Opportunities in the Payday Loan Industry
Investment Opportunities in the Payday Loan Industry
With over 3,000 registered payday loan businesses and an overall population of 25 million people, Texas represents one of the most prolific markets for payday lenders in the industry.
Not only that, but there are many large metropolitan clusters in Texas surrounding the large cities Dallas, Ft. Worth, Houston, Austin, and San Antonio. There’s a saying in Texas that when the weather is hot, there’s nothing else to do but shop and eat. A typical street corner in Dallas has at least two banks and two fast food restaurants, so consumers are invited to get money and spend money just about every waking moment. Texas highways and byways are set up to prime the capitalistic consumer engine and breed success in the retail business. Intercity freeways are gigantic advertising corridors for anyone who wants to hang out their shingle, making this market a hotbed for business owners.
One such business that has been the beneficiary of that formula is the payday loan industry. What formerly was a little known product based in check cashing stores or pawn shops, has grown into a professional, regulated, and mainstream industry. In 2010, it was at $40 billion.
With all the instability in traditional cornerstone investments like the stock market and real estate, many investors have taken a look at the payday loan industry as an option. The industry is tuned to adapt to the idiosyncrasies of the cash strapped, credit challenged consumer. Payday loan businesses were built by adapting to many of the problems that Wall Street cannot.
Are you looking for something new? Are you growing weary of the daily picture that CNN shows you of the beleaguered NYSE trader looking down at his desk after yet another hard plummet of the market?
Consider becoming a lender in the Texas payday loan business. Reach out to C.A.B. Consulting and Brokerage if you would like to look into it. We would be happy to tell you what we know and connect you with businesses looking for people such as yourself with money to invest.
Contact C.A.B. Consulting and Brokerage at cabconbrokerage@gmail.com or call us at 214.293.8676.
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July 6, 2013 at 9:08 am
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Hi
I own and run a small property brokerage and I have heard there are some excellent opportunities to offer investment into payday loan funding. Is it possible to send me some details, and any details of commissions that would be payable.Thanks
Steve
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August 10, 2013 at 7:37 am
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Certainly Steve. Returns of 12% – 18% are conceivable depending on a number of factors. Lots of issues to consider. lets explore…
Michael
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