Payday Loans and the Hypocrisy of Their Competitors
In Texas, as in many locales, credit unions are aggressively developing products to compete with payday loans; the majority of which are offered under the CSO Model ( Credit Services Organization ). In a nutshell, under the CSO Model, a payday loan company simply fills out a one page form required to register as a CSO along with a bond and they’re in business. (There are a few other details…like forming two entities “at an arms-length-relationship” to (1)act as a “CSO and (2) a “Lender.”)
CSO-Credit Services Organization for Payday Loans & Car Title Loans
The Credit Services Organization, often referred to as a CSO, is becoming popular in states like Texas for offering payday loans and car title loans. The reason? The state of Texas simply requires a “registration” of a business as a CSO rather than applying for a payday loan or car title loan license.
