Keeping an eye on FinTech Lending
Keeping an eye on FinTech Lending
Why should Texas CABs keep an eye on FinTech Lending? We need to watch and learn, let’s evolve our businesses by watching their successes and failures. Where you can, implement their techniques that work, into your CAB’s capabilities! Think marketing, underwriting, process flow, etc..
These recent OCCC MSA report statistics show that FinTech now owns the Texas loan market which was not the case a few years back.
Q2 2019 OCCC Report said:
12 out of state online CABs did 67% of all single payment loans.
26 out of state online CABs did 49% of all installment loans. (comes out to $1.3 million per month in loan volume for those 26)
3 years ago the OCCC Q2 report said:
10 out of state online CABs did 50% of all single payment loans.
15 out of state online CABs did 28% of all installment loans.
Wow – just 26 CABs are now doing half of all installment loans executed in Texas. Consumers are having their voice heard and it is saying “we love FinTech lending!” Make changes that will mirror your FinTech competitors and tap into a massive market that you may be missing.
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.
3rd Party Lender
3rd Party Lender
With over 3,000 registered payday loan businesses and 25 million people, Texas represents one of the most prolific markets for Lenders in the industry. One significant reason for this is the state’s licensing structure, called the “CSO Model” or “CAB Model.” You can read more about each of these models on our web-site’s “CSO – Old Way” and “CAB – New Way” pages.
The model requires that Credit Services Organizations (CSO’s), and Credit Access Businesses (CAB’s) operate alongside the 3rd Party Lender who provides the funds for loans to consumers.
Yes, despite the fact that many CSO’s and CAB’s do have the assets for loan funding they can never be used for that purpose, and arm’s length relationships with other entities must be established to play that role if they wish to participate in the robust Texas market.
In the arrangement, a CSO or CAB functions as a broker who markets its services, administers the loan process, and assists the consumer in attaining the loan much like a co-signer.
The 3rd Party Lender’s role is often a silent and secure one. Interaction with the customer is rare, and it is common for the Lender’s proceeds to be guaranteed by the CSO / CAB with collateral in a number ways.
Are you a CSO or CAB that needs a Lender?
Have the new requirements and rules related to the Credit Access Business licensing process forced you to seek another Lender?
Are you interested in exploring the opportunities available to investors serving as Lenders in the CSO / CAB Model?
Call or email C.A.B. Consulting and Brokerage for details!
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August 19, 2016 at 2:15 am
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I am looking into starting a CSO business primarily focused on home mortgage lending/refinancing. I wonder if a home based business is a good way to start since I do not have access to much capital. I also need a source of income soon due to being unemployed at the moment. I recently resigned from my 9 year Spanish teacher position.
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Texas Payday Loan Businesses – Take a CAB!
Texas Payday Loan Businesses – Take a CAB!
What is a CAB? Well, if you are a payday loan business in Texas, it’s now you starting January 1, 2012.
The title CAB stands for Credit Access Business, and along with the name change comes many changes for payday loan businesses. The current CSO (Credit Services Organization) model will evolve next year thus transitioning all payday loan businesses into CABs, which requires these businesses to comply with new regulations. Understanding the new regulations is vital to continuing your payday loan business.
Licensing is one portion of the CAB transition. Under Texas House Bill 2594, which addresses the new licensing process, current CSOs will be required to attain a CAB license and will be subject to a thorough review. Applicants will undergo reviews not just of their business operation, but also of the principals involved with the CAB’s whose personal and business background will be requested.
What else is included in the CAB licensing process? A new application and detailed reports must be submitted to the state and an approval must be obtained in order for current businesses to operate legally after January 1, 2012. In addition, all Texas payday loan businesses must file quarterly reports, with the first being due April 2012. The reports will summarize the prior three months of transactions and will be reviewed by the OCCC (Office of Consumer Credit Commissioner), which is the new governing body of the industry in Texas. This process is new, it is an unknown, and will take some thought. Are you ready to take this on? In addition to the day-to-day operations of your payday loan business, you must create a plan to ensure compliance with the OCCC, which is a big undertaking.
The good news? CAB Consulting and Brokerage understands all the details required for your payday loan business to transition from a CSO to a CAB. They’ve been in the payday loan business since 2003 and have recently participated in the rule making process at the Capitol in Austin to ensure thorough understanding of the CAB model and to voice preferences and concerns about proposed rules.
Don’t get bogged down by the details – contact CAB Consulting and Brokerage at 214-293-8676. Let them inform you, handle the details of your transition, and execute the process so you can continue to do business in Texas.
Check back in for details about the new notices and disclosures requirements under the new CAB regulations.
{ 4 comments… read them below or add one }
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May 1, 2013 at 10:59 pm
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could you please send me some info about how we go about getting a loan office for Pay Day type loans started ? What license and how to apply would we need for Kerrville, Texas? What type of rules do we need to follow for our loans and where do we get a example of the contracts?
Thank you for any help you can give us.
Randy Olson-
August 10, 2013 at 7:43 am
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Hi Randy,
Congrats on your new biz. We’ve got sample docs, forms, and know-how for this. My team is focused on Texas payday ans car title loans.
Call me at 214-293-8676 Michael
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August 9, 2013 at 2:33 pm
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I am brand new at this business idea and would like start up consulting advice
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August 10, 2013 at 7:38 am
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Give us a call,Don. PH# on my web site
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