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.

Additionally, the rates one can charge are not prescribed by Texas statute, unlike a payday loan or car title loan. CSO’s are not subject to the state’s small loan laws or regulation by the Office of Consumer Credit Commissioner! Typical rates for these “loans” are currently in the $20 to $30 per $100 loaned.

What is a CSO or Credit Services Organization? It’s simply a broker that, after reviewing a consumer’s ability to pay, issues a letter of credit on behalf of the consumer to a third party “lender.” The CSO or Credit Services Organization services the “loan”, markets the “loan”, and helps the consumer improve their credit by reporting their payment history to a sub-prime credit reporting agency.

For a thorough description of the step-by-step procedures for setting up a Credit Services Organization – CSO Model including sample contracts, click here to review our 50 page CSO Report.

Comments ( 5 )
  • Bill says:

    @DL. I am sorry to hear what happened to you, but you have to take some personal responsibility here and at some point in your life. It was 100% your fault you took the loan, period. The fact that you didn’t read the text is also your fault.

    This kind of denial on your behalf is ludicris. You had some kind of emergency that prompted you to do this, but again it did not force you to act. The same kind of mentality led you to buy something you could not afford. I’m talking about your house.

    I know that life is not kind all the time but you have to weigh ALL of your options before you act or make a decision. Even in a stressful situation, you still have a duty to make sane and sound choices.

    What you are implying is that the reason for your strife is because a certain business or industry exist, not true. It’s also not fair to blame someone else for you decisions Who’s fault will it be if you stop at the beer store today and get a six pack, drink it, and wreck out?

    This is America and you have freedom of choice. It is not the governments job to babysit the citizens and make choices for them. That’s what we get with regulation. Less freedom.

    Let’s face it, because you had a bad experience doesn’t necessesarily mean a service should not be available to another if they so choose. Maybe someone else has the ability to pay the loan back in 2 weeks or a month or whatever the case. At this point you are denying a service to another just because it’s not favorable to your situation.

    I pray for you and your situation. I pray that you will learn from this and gain wisdom instead of just blame someone else. I also pray that you will accept some personal responsibility so your life may prosper.

  • DL says:


    As you know if you are in this business, people looking for a quick payday style loan are usually not in a frame of mind to negotiate – because we are desperate. With this, I went into a CSO and applied for a loan for $3000. Of course, they gave it to me with out really explaining the fees. And I guess I would have understood if I had read the 10 page document, but when you are trying to get your electricity back on and pay your mortgage so they don’t foreclose, you kind of glaze over 10 page agreements. Anyway, my CSO “fee” for this $3000 loan was — wait for it — $3000. I am going to contact the regulators and get this stopped. So your colleagues in this loan business just screwed it up for everyone.

  • jacobs says:

    do you know of a good CSO attorney in texas??

  • Cristina@leadpile.com says:

    I agree. Too much abuse of anything will eventually get regulated. Hopefully lenders will use it and not abuse it. Payday loans should be open to an individual by choice. It’s not the lender’s fault that the consumer abuses the “LOAN” system and further more are unable to pay it back. Every company has to run a business to survive. I’m not promoting anything but I’m being a realist with regards to a business. It works the same way as renting a car. It’s a ridiculous price. Rent a car every week and by the end of the year you have purchased the car. Should law makers regulate Budget or Enterprise? No one really thinks of it that way because most “car renters” actually have the money to pay and they haven’t boycott or complain to the BBB or attorney general with regards to the excessive cost of renting a vehicle.

    I say payday lenders should use CSO model to process payday loans in states where law makers have added a voice.

  • MoneyMan says:

    The CSO approach works very well and is really simple to setup. My only caution is that if the regulators perceive we are abusing this model they will pull the plug.


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