OCCC Examinations in Full Swing
OCCC Examinations in Full Swing
Good afternoon Credit Access Business World! For those of you who are out and about on the internet today doing a little research on OCCC CAB Compliance, OCCC Audits, Credit Access Business licensing, etc, you most likely will happen upon this blog post. I have been working with Credit Access Businesses on their compliance, the OCCC quarterly reports, and examination preparation. Over the last few weeks there has been a definite up-tick in word on the street about the “Audit.” The OCCC is calling them “Examinations” and they began in mid-April.
In December 2011, I met with the OCCC and was given some hi-lights of what an examination would be focused. My recommendation is that you focus on Chapter 393 of the Texas Finance Code, HB 2592, and HB 2594. Make sure your loan contracts include all recommended and required disclosures, and be ready to have files reviewed. It is possible that a CAB be asked to refund some or all fees collected in 2012 if certain violations occur. So, the price is high for non-compliance and sloppy documentation.
If you have doubts, there are many options out there, contact the OCCC or CAB Consulting and Brokerage, get with attorneys who are experienced, or reach out to friendly competitors. The small to mid-size operators might be in harm’s way as they are not traditionally the ones with consultants, on staff attorneys, etc. So if you are one who fits that profile – now is the time to invest in your business, take the time to do your research, or hire someone to review it.
If you are licensed you will be examined, and it is typical for the OCCC to simply show up at your store with no prior notice. Call Michael Brown at CAB Consulting and Brokerage, we can discuss options and get going on a plan. Michael can be reached at 214-293-8676, or via email at cabconbrokerage@gmail.com.
Previous post: Is the “Dallas Payday Loan Ordinance” for real?
Next post: Payday Loan Boot Camp Sessions are underway!
Information for Texas CSO’s on Credit Access Business licensing
Information for Texas CSO’s on Credit Access Business licensing
There’s decent list of new requirements that the Texas CSO needs to know about when they are applying for their new Credit Access Business license this fall. Substantial input has been provided by many CSO’s in Texas as far as the new rules go, and recently I attended two stakeholder meetings in Austin at the Capitol Building to contribute my thoughts.
In the past I have not been to such a meeting and so I was all ears. At the beginning I wasn’t sure if the atmosphere was going to be contentious, if the members of the Finance Committee were going to be friendly, or if they were truly seeking input. I have heard of some heated confrontations on the House floor so I was kind of expecting the same. But, it was actually very co-operative, and the stakeholder input was asked for more often than it was given believe it or not.
From a high level – the OCCC is going to dig a little deeper this time around and take a close look at both sides of your business model versus your prior CSO application. Information about owners all the way down to 5% may be asked for, and they want important information for the lender as well. Reports are going to need to be submitted quarterly, there are new ways that you must disclose information to consumers, and certain procedures will be required that have not been mentioned before. And, there’s going to be several more fees charged to the licensee.
All in all, the forum in Austin was warm, and the word “flexible” was used often by the OCCC board members. An example of the OCCC listening to stakeholder input and their being flexible was in regards to the request for Credit Access Businesses to provide their contract forms with their CAB application. This request was met with concern, the concern was expressed, and as a result the documents will not be required with the application.
October 21 is the next date CSO’s need to be aware of – OCCC will be firming up proposed rules and rules changes. I will keep everyone posted on my blog – looking forward to your return.
Questions? Feel free to call me! Michael Brown at C.A.B. Consulting and Brokerage (214-293-8676).
{ 2 comments… read them below or add one }
-
May 21, 2013 at 4:40 am
-
I need info about the CAB licence what the cost you charge for this license I ready to open Mr title loans and pay day loans en eagle pass tx but I need you help to fix the premises or licenses
-
August 10, 2013 at 7:41 am
-
214-293-8676 call us first for an exploratory call
-
Leave a Comment
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.
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.
Leave a Comment
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
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:
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.
Leave a Comment
Previous post: CFPB released a new kind of complaints report
Next post: OCCC Compliance Basics from CAB Consulting
{ 1 comment… read it below or add one }
Need to know your costs for getting the OCCC License completed.
Please call me at 214-207-7496