Tag: How to Start a Texas Payday Loan Business

15
Jul

Payday Loan Stores vs Internet Lending

Lending Money: Brick-n-Mortars are NOT Dead

By: Jer Ayles at Trihouse Consulting

35 million U.S. households cannot wait 3-5 days for money to be transferred into their bank account – if they’re lucky enough to have a bank account! So, brick-n-mortars are NOT going away; at least not today. Here’s why…

According to the FDIC and every Tom, Dick & Harry, 50% of U.S. residents have a credit score of 680 or less.  That means no credit! No borrowing. No loans.

This group includes 9,000,000+ households who do not have a bank account; 7% of the population.

An additional 20% percent of U.S. households (24.5 million) are underbanked; meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system. That’s payday loans, car title loans, pawn, rent-to-own, etc.

What do these all these statistics mean? 34,000,000 households cannot borrow a nickel to fix the car, pay for a prescription, turn on the water, gas, electricity, cell phone, internet, cable serviceJ, avoid an NSF…

If you’re reading this, it’s likely YOU cannot fathom finding yourself in this situation!

But I can promise you, as the owner of several payday loan and car title loan stores/internet properties, and a very busy consultant for the “business of lending money” industry, THIS IS THE CASE FOR MILLIONS OF CONSUMERS WORLDWIDE!

Imagine; 24 MILLION households unable to get their hands on $400 in an emergency.

So, for those of us who are tech savvy and have access to a multitude of options for credit and cash, it’s impossible to “put ourselves in others’ shoes.”

On the other hand, for those of us seeking “enlightenment,”  simply pay a visit to your local payday loan store for a couple of hours and see the light!

You think payday loans are a rip-off?  I know you do! I used to also. But, consider this:

 

Surprised? That’s right! A typical bank or credit union NSF fee has a 1400%+ APR.

Check out the reconnection fees for utilities. And credit card late fees? FUHGEDDABOUTIT!

Here’s the crazy part: The banks have zero risk and yet they get away with $35 NSF fees. No risk, you ask? Correct. The banks and credit unions are at the front of the line when a customer gets paid. The bank takes their cut before paying any other consumer transactions. What? The consumer lost their job and zero bucks are going into their bank account? No problem for the bank. They simply place their customer in Chexsystems and wait. Their “bad” customer will NEVER get a bank account again UNTIL the bank gets paid.

Credit unions have an even better deal. They are considered NON PROFITS! They do not pay taxes like the rest of us. But, they still get away with $35 NSF fees.

The big problem for these 35M households is the fact they can rarely wait for their emergency money to “hit” their bank account via the various payment/money transfer rails available today. Sure, Fintech companies and old school payday lenders are slowly changing this situation.

But, the PREFERRED method for the “underbanked” to solve their cash crunch is to walk into a brick-n-mortar small dollar lender and walk out with CASH ten minutes later!

END OF STORY. [Send comments and questions to: TrihouseConsulting@Gmail.com ] 702-208-6736

18
Oct

Texas Payday Loan CSO License Application and Regulations

Texas Credit Access Businesses

Texas Payday Loan License Application

Texas CSO/CAB Regulations

Texas Credit access businesses [payday loan lenders] obtain credit for a consumer from an independent third-party lender in the form of a deferred presentment transaction or a motor vehicle title loan, more commonly referred to as “payday loans” or “title loans.”

In Texas, the actual third-party lender is not licensed, rather the credit access business that serves as the broker is the licensee in this regulated industry. The credit access business charges a fee to the consumer for obtaining the third-party loan; this fee is usually calculated as a percentage of the loan amount.

The Texas borrowers will sign a promissory note with the lender for the actual loan and a separate credit service agreement with the credit access business. Generally, all documents are signed at the credit access business location and payments are made directly to the credit access business.

Texas Payday Loan Resources

New Application Process Notice

All applications for a new license or registration must be submitted through the online system “ALECS” (Application, Licensing, Examination, Compliance System).

Texas Licensing Forms

Texas Advisory Bulletins & Disclosures

Texas Reporting

Texas Published Reports

Texas Examination Accommodations

Texas Additional Resources

 

Statutes & Rules

These are the primary statutes and rules that apply to Texas  credit access businesses. This is not a complete list of laws that credit access businesses are required to comply with.

Primary State Statute
Chapter 393,Texas Finance Code: Credit Services Organizations

OCCC’s Rules
Title 7, Chapter 83, Texas Administrative Code

Other State Statutes
Texas Legislature Online

Federal Statutes & Rules
U.S. Government Publishing Office

Do you want to make serious money lending cash to Texans? Start here with our “How to Start a Payday Loan Business.” It includes all the info, tips, strategies and more that you need to launch a payday loan business in Texas.

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