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.
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2014 TOFSC Conference Invites have been sent!
2014 TOFSC Conference Invites have been sent!
The 2014 TOFSC Conference invites were sent out today. Looking forward to hearing from Members, Vendors, other other invitees on attendance.
Attendance forms were sent out on email, see below for that form if you did not receive one. Send completed forms to Michael Brown via email or fax. Michael@CreditAccessBusiness.com or 888-561-0986.
The conference will an afternoon event, will try and wrap up by 5pm then we can all head to have some cocktails and appetizers at the hotel after.
We will have a number of Sponsors who will address the group on issues to our Members. I am looking forward to the event – will make sure everyone gets value out of your time at the conference.
Best,
Michael B.
And, here is the link to the invite:
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OCCC Compliance Basics from CAB Consulting
OCCC Compliance Basics from CAB Consulting
Just a reminder for all of you CABs out there – continually review your Consumer Transaction Information Disclosures & Fee Schedules.
Many times throughout the course of the year CAB operators may change their CAB fee amounts or offer different loan products such as offering multi-payment installment loans, payday loans, or auto title loans. When changes are made and loan products are dropped, added, or modified, we have seen the Fee Schedule & Consumer Transaction Information Disclosures be overlooked.
Take the time to ensure that your Consumer Transaction Information Disclosures & Fee Schedule are up to date with all of the products you are offering. This is on the OCCC Examiner Checklist and Examiners will call you out on this. Be an “A” student and get it right.
Additionally, per Texas Administrative Code 83.5004, if changes are made to your Fee Schedule or Consumer Transaction Information Disclosure, preceded versions must be maintained on site for a period of one year or until the next OCCC examination.
Here is the exact language regarding the retention of amended Fee Schedules & Consumer Transaction Information Disclosures:
For In-Store Transactions:
“In-store fee schedule and notices. The in-store fee schedule and notices required by Texas Finance Code, §393.222(a), and §83.6003(a) of this title must be available for inspection by the OCCC in a conspicuous location visible to the general public. If a licensee amends the in-store fee schedule or notices, it must maintain documentation of the previous versions of the schedule or notices for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. The licensee may maintain the documentation of previous in-store fee schedules and notices at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”
For Online Transactions:
“Website and online disclosures. If a licensee maintains a website, it must make the website available to the OCCC for inspection. The website must include a fee schedule to show the licensee’s compliance with §83.6003(b) of this title, and applicable consumer disclosures to show the licensee’s compliance with §83.6007(f) of this title. If a licensee amends the website’s fee schedule, consumer disclosures, or method of accessing the fee schedule or consumer disclosures, the licensee must maintain documentation of the previous version of the website to show compliance with §83.6003(b) of this title and §83.6007(f) of this title. This must include the home page, any pages used in accessing the fee schedule and disclosures, and copies of the previously used fee schedule and disclosures. The licensee must maintain this documentation for one year from the date of amendment or until the next examination by OCCC staff, whichever is later. This paragraph does not require a licensee to maintain previously used pages of the website that were not the home page or pages used in accessing the fee schedule and consumer disclosures. The licensee may maintain the documentation of previous versions of the website at a centralized location other than the licensed location or branch office. In this case, the documentation must be maintained for one year from the date of amendment or until the OCCC’s next examination of the centralized location, whichever is later. However, upon the OCCC’s request, the licensee must have the ability to promptly obtain or access copies of the complete documentation so that the OCCC can examine it.”
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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CFPB released a new kind of complaints report
CFPB released a new kind of complaints report
After not being able to find the CFPB monthly complaint report on payday loans last week, I found it Wednesday which was a bit later than normal. The delay might have been because it is a different kind of report, it is focused on “older” complainants who were 62+ years of age.
This new format report focused on just one month, and discloses that payday loan industry had (23) complaints versus (27) in the prior month. That is a 28% decrease and is very much in line with all of the other reports that have been released I believe this is #23.
There have been 1,610 CFPB complaints submitted on the payday loan industry since complaints started being taken in November 2013, and (60) “older complaints” have been submitted since November 2013.
Overall, 1,163,000+ total complaints have been submitted so far to the CFPB covering all industries not just ours. 1,610 o, so PDL has a .001387931 complaint ratio!
Here is a link to the CFPB’s published report:
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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{ 4 comments… read them below or add one }
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
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
I am brand new at this business idea and would like start up consulting advice
Give us a call,Don. PH# on my web site