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Texas CSO - CAB Credit Services Organization Payday Loan Model

A Discussion of the Texas CSO - Credit Services Organization and CAB Credit Access Business Model for Payday Loans, Car Title Loans, all Consumer Loans...

Texas payday, installment, car title loan lenders register as "Credit Services Organizations" commonly referred to as a "CSO". This includes Advance America, Cash America, First Cash, EZ Pawn, and EZ Cash in addition to many small payday loan and car title loan operators.

Texas transitioned to the CAB - Credit Access Business Model.

Prior to the switch over to the CSO model, virtually all these cash advance operators utilized the bank-charter model; partnering with banks incorporated in states lacking usury laws (referred to as the "payday loan bank model." By partnering with these banks and acting as brokers, the payday loan operators were able to export the usury rate applicable to their partner bank into Texas; or whatever state the payday loan operator/broker located.

What is a CSO - CAB Credit Services Organization
In essence, a CSO or Credit Services Organization is defined by the Texas Credit Services Organization Act (Section 393 of the Texas Finance Code) as an entity or person that provides one of the following services:

An important aspect of the CSO - CAB or Credit Services Organization model is that there IS NO LICENSING required by the state! CSO's are required to "REGISTER" with the Secretary of State, they are NOT licensed, AND THEIR FEES ARE NOT REGULATED.

How does the CSO - CAB Credit Services Organization work with consumer; including car title and payday loans?
The CSO Credit Services Organization operates as a broker, much as they did when partnering with the banks (payday loan bank model). The Texas Credit Services Organization Act (CSOA) allows the payday loan lender to register as a CSO and act as a loan broker. Thus, the CSO, previously a payday loan company, can make loans via consumer lending companies that are REGISTERED with the Texas OCCC but UNLICENSED. The CSO Credit Services Organization acts as a broker for the consumer in need of funds by issuing a "letter-of-credit" on behalf of the consumer to a lender. This third-party registered lender funds the "loan" brokered by the CSO "broker".

The CSO - CAB Credit Services Organization model arises from a U.S. Fifth Circuit Court of Appeals opinion, in Lovick vs. Rite Money, which held that payments to a registered CSO loan broker could not be treated as interest.

The applicability of the CSO Credit Services Organization to use in other states is being explored now. Thirty-one states plus Canada have provisions for the CSO Credit Services Organization entity. Since it is typical of the CSO not to be regulated, and the fact that the CSO fees are not considered interest as per the 5th Circuit Court of Appeals, there is little doubt we will see this approach utilized on a grand scale in the future!

For a thorough discussion of the CSO Credit Services Organization - CAB Credit Access Business Model, including the applicable Texas Statutes and the CSO/CAB Registration Form for Texas, we invite you to purchase our "Payday Loan Startup and Training Manual/Bible".

For buyers having Texas addresses, we'll include our 52 page Texas CSO/CAB Report. In it, we provide a complete discussion of the CAB/CSO collaboration, technicalities, the Texas statutes, strategies, tactics, how to start a CSO, resources, a sample CSO contract and a state registration form

How Start Cash Advance Business

Trihouse Enterprises, Inc.
Payday, Installment and Car Title Loan Consulting
27068 La Paz Rd. Suite 113
Aliso Viejo, Calif. 92656

100% Guarantee Check Program for the CSO Model-Payday Loans in Texas

Would you like to offer Cash Advance / PayDay Loans to your customers in your state? Become a Credit Service Organization (CSO). You can charge $20.00 per hundred for loans you arrange from a third party lender. The average loan is $300.00 and the average fee is $ 20.00 per hundred or $60.00 on $300.00 and we will 100% guarantee all your loans.

Once we have approved a loan and if it goes bad just send the check or ACH (Automated Clearing House) to us and we will put the principal and interest back in your bank. You have your money from us within 5 or 6 business days and ready to put back on the street.

If you are utilizing a collection company now it takes 90 to 120 days for them to collect and they only collect less that 50% of the checks or ACH's you submit to them. That's 90 to 120 days you do not have use of that money and 50% of the money you will never see again. How many times can you turn that money in 90 to 120 days if you had access to it?

Trihouse Enterprises, Inc.
601 East Charleston Blvd.
Suite 100
Las Vegas, Nevada USA 89104
702-208-6736 Office
Call us now with your questions!