The “Lend 360” Conference is coming up in Dallas on the 25th here are the summary details.
The “Lend 360” Conference is coming up in Dallas on the 25th here are the summary details.
The “Lend 360” Conference is coming up in Dallas, September 25-27. Since it is in our back yard versus Florida or California wanted to discuss it a bit and give you some information for you to better decide on whether you will or will not attend.
Many of our vendor and TOFSC sponsor companies will be there so that is a great reason to go out of the gate. (Microbilt, Clarity, Leads Market, Factor Trust Trans Union, Dot 818, Payliance, Repay, Zero Parallel, Infinity, and Loan Payment Pro) along with many others.
Looking at the schedule over the 3-day period…it starts at 1p on Wednesday, goes until 5p. Thursday is 8a-5p, and Friday is 8a-1130a. The format appears to be traditional conference presentation style, in 8-10 different rooms of the Fairmont Hotel in downtown Dallas along with a larger vendor / sponsor booth gathering area.
Summary of presentation topics:
- Federal law – conversation around lending.
- Small business customer acquisition (could be very relevant to our group).
- All parts and pieces of the “FinTech” industry – this is the major component of the conference.
- 2020 election impact on FinTech.
- Investor outlook on Fintech.
- Conversation on moving into “alternative credit market” and products / services in the “non-prime market.
- How FinTechs work with banks, there is more than one of these, so it appears to be a big part of FinTech operations…interesting.
- How to use multiple domain names for your business online to drive traffic to your business (could be very relevant to our group).
- Staying ahead of fraudsters (could be very relevant to our group).
- Data security.
- FinTech investors and other capital providers will be in attendance and will speak.
- Advertising and marketing round table (could be very relevant to our group).
- Making your business recession proof.
- Optimizing debt selling and collections strategies.
Costs $2,600 to attend and here is a link to more information: https://www.lend360.org/schedule/
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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Legislation
Legislation
See below for PDF’s of the Payday Loan and Auto Title Loan related bills that have been proposed this year in Texas’ 83rd Legislative session. On the home page of www.CreditAccessBusiness.com, detailed “blog-style” summaries have been done on each. It is the pleasure of CAB Consulting to provide you with this online resource.
CAB Consulting has retained Keefer Strategies and is actively participating in the legislative conversation this year. We have aligned with many clients and TOFSC to get informed, have our voice heard, and impact the conversation in a positive way. If you would like to learn more about what our group of small to mid-size Credit Access Businesses in Texas are up to, please call Michael Brown at 214-293-8676, or contact him via email at Michael@CreditAccessBusiness.com
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OCCC is having a special stakeholder meeting on the questions posed to the Attorney General recently about CSO’s.
OCCC is having a special stakeholder meeting on the questions posed to the Attorney General recently about CSO’s.
See below for a recent email sent out to OCCC stakeholders:
“On December 9, 2019, at 2:30 p.m., the OCCC will hold a stakeholder meeting on credit services organizations and attorney general opinion KP-0277.
A stakeholder meeting notice is available at: https://occc.texas.gov/publications/attorney-general-opinions. On this webpage, click the link labeled “Stakeholder Meeting Notice.” The meeting notice provides additional details and questions on which the OCCC is seeking input.
Stakeholders are invited to attend the meeting in person at the Finance Commission Building, or to listen and participate through an online webinar. To listen or participate online, please follow the instructions available at: https://attendee.gotowebinar.com/register/3659168503230489611
The OCCC will accept comments and suggestions on the questions in the meeting notice until December 12, 2019, at 5:00 p.m.”
OCCC is asking stakeholders for comments and suggestions on the topics below:
1. Does the opinion’s analysis affect the regulatory landscape for CAB transactions (i.e., deferred presentment transactions and motor vehicle title loans)?
2. Must persons engaged in non-CAB transactions comply with all requirements of Chapter 393 other than those that apply specifically to CABs (i.e., Section 393.201(c), Subchapter C-1, Subchapter G)?
3. Are persons engaged in non-CAB transactions subject to the enforcement authority of the attorney general under Section 393.502?
4. Are persons engaged in non-CAB transactions subject to local ordinances and the enforcement authority of local governments?
5. Are persons engaged in non-CAB transactions subject to federal law and the enforcement authority of federal agencies (e.g., the Consumer Financial Protection Bureau, the Federal Trade Commission)?
6. Sections 14.101 and 14.201 of the Texas Finance Code give the OCCC authority to investigate and enforce violations of Chapter 393 with respect to a credit access business. What is the proper role of the OCCC in light of the opinion?
7. Section 393.602 of the Texas Finance Code says a person may not use a device, subterfuge, or pretense to evade the application of Chapter 393, Subchapter G. Under the opinion, what would constitute a device, subterfuge, or pretense to evade the application of Chapter 393, Subchapter G?
8. Section 393.303 of the Texas Finance Code says a credit services organization may not charge or receive from a consumer valuable consideration solely for referring the consumer to a retail seller who will or may extend to the consumer credit that is substantially the same as that available to the public. Under the AG opinion, what would constitute a violation of Section 393.303?
9. Does the opinion’s analysis raise other significant policy issues?
10. Should the OCCC and the Finance Commission engage in rulemaking related to any of these issues? If so, what is the statutory basis for the rulemaking?
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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CSO-Old Way
CSO-Old Way
The Credit Services Organization (CSO) model is the business model that payday loan companies operate under in the State of Texas.
The CSO is defined by the Texas Credit Services Organization Act and Section 393 of the Texas Finance Code. The code defines a CSO as an entity that provides services that improve a consumer’s credit rating, obtain an extension of credit for the consumer, or provides assistance to a consumer regarding credit improvement or extensions of credit.
In reality, all payday lenders in Texas are not true payday lenders. They do not sell a traditional payday loan compared to other states, and, in contrast, they call themselves CSO’s. In Texas, a registration certificate is required and allows payday loan businesses to act, more specifically, as brokers who arrange for a consumer to receive a loan from a particular Third Party.
The customer pays fees to the CSO for arranging the loan in an amount typical to the industry, $20 per $100 for example. On the contrary, there is no limit to what can be charged by the CSO. The Third Party, called the lender, issues the money to the consumer and is paid interest for that loan of usually just under 10 percent APR.
Why do all companies in the payday loan business in Texas operate under this model? After this creative business model launched it quickly landed in court as Lovick v. Rite Money. The case was heard in the U.S. Fifth Circuit Court of Appeals, where an opinion was issued, which held that payments made to the CSO were not to be considered interest. The model was deemed viable, and once word spread about the ruling and the viability of the CSO model, companies began adopting it and expanding rapidly.
Lending was easy under the CSO model when all that was needed was a registration certificate and a Third Party lender to sell loans. After the new laws, House Bills 2592 and 2594, were passed in 2011, adopted regulations changed the payday loan business. Now called the Credit Access Business (CAB), payday loan businesses are required to have a new license, pay more fees, and operate in compliance with a new set of required notices, and disclosures.
The new laws go into effect on January 1, 2012. At that time, CSO’s must have their CAB license in place alongside the new required consumer notices and disclosures in order to be compliant.
