Transactions are transparent and confidential. Signage and disclosure forms are clearly posted and explained to short-term lending customers.
According to a poll performed by Harris Interactive of short-term lending customers1:
• 98 percent of short-term borrowers indicated that they were satisfied with their most recent loan experience.
• 93 percent of short-term borrowers carefully weighed the risks and benefits before taking out a short-term loan.
• 95 percent of short-term borrowers value having the option to take out a short-term loan.
Texas Credit Service Organization Act (Texas Finance Code Chapter 393)
Texas Deceptive Trade Practices Consumer Protection Act (Texas Business and Commerce Code Chapter 17)
Texas Constitution, Article 16
Texas Finance Code Chapter 302
Texas Business and Commerce Code, Article 9
Federal Truth in Lending Act
Regulation Z (12 CFR part 226)
Texas Debt Collection Practices Act (Texas Finance Code Chapter 392)
Federal Debt Collection Practices Act
Federal Equal Credit Opportunity Act
Regulation B (12 CFR part 222)
Federal Fair Credit Reporting Act
Regulation V (12 CFR part 222)
Federal Trade Commission Act
Federal Gramm-Leach-Bliley privacy laws
Federal Trade Commission Regulations (16 CFR parts 313 and 314)
Service Members Civil Relief Act
Electronic Signatures in Global and National Commerce Act (E-sign)
Title X Dodd-Frank Wall Street Reform & Consumer Protection Act
Fair and Accurate Credit Transactions Act (FACTA)
Bank Secrecy Act, OFAC and US Patriot Act
Electronic Funds Transfers Act
Regulation E (12 CFR 205)
Every CAB is licensed by the OCCC.
The OCCC performs onsite examinations of loan files at all licensed companies on a rotating, periodic basis.
The OCCC has broad enforcement powers to:
• order restitution to customers;
• impose fines for repeated violations of laws and regulations;
• issue cease and desist orders against individuals for improper practices;
• and revoke licenses to conduct business in the state.
When a consumer files a complaint with the OCCC, the agency is required to open a file on the complaint.
• The agency must investigate by contacting the consumer and the Credit Access Business (CAB).
• The agency must then decide how to resolve the complaint --- which could include an enforcement action against the CAB and restitution to the consumer.
•By law, written correspondence must be sent to both the consumer and the CAB to close a complaint file.
Over the last seven years, the OCCC has tracked, investigated and resolved CAB consumer complaints. Complaints against CABs are the lowest among all businesses regulated by the OCCC --- one per every 21,000 transactions.
Texas law requires all Credit Access Businesses (CABs) to post a menu board in each office clearly showing the fees and costs for every type of loan. The menu board must also include instructions about how to file complaints with the OCCC --- the consumer complaint helpline and the OCCC complaint website.
Before performing services for a customer, a CAB must provide a written disclosure:
• clearly showing all of the costs of the loan;
• a comparison of the costs of other types of consumer credit;
• the amount of accumulated fees resulting from refinancing the loan;
• and information regarding how often other borrowers are repaying their loans.
Every loan contract must include the following disclosures:
• prepayment penalties are prohibited;
• CABs must comply with the federal and state Fair Debt Collection Practices Acts;
• CABs cannot threaten criminal charges against a borrower for failure to repay a loan (absent fraud on the part of the borrower);
• and CABs must comply with all state and federal military lending laws.
Contrary to popular belief, Credit Access Businesses (CABs) and short-term credit providers generally make about one percent of revenues when you factor in default rates.
Financial institutions such as Wells Fargo, Citibank, and American Express make almost 15-20 times the profits of CABs. Onerous regulation and rate caps will dramatically limit access to credit for millions of Texans.
PEW’s “research” against short-term loans was not created by the charitable trust but instead its paid advocacy arm, which acted as a proponent for banks and credit unions.
The Center for Responsible Lending describes itself as a “non-profit, non-partisan research and policy organization” working to eliminate predatory lending practices. However, the CRL is a liberal advocacy arm of the Self-Help Credit Union – a $500 million financial institution with credit unions throughout the United States.
Individuals from the CRL have passed through a revolving door between Self-Help Credit Union Network and federal positions at the Consumer Financial Protection Bureau during the Obama administration. Credit unions stand to gain the most through higher overdraft fees and exclusive rights to offer taxpayer subsidized loans with limited competition..