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Banking as a Service vs. Retail Installment Contracts (Baas vs. RIC)

Overview

In a effort for us to offer more options to our providers, partners, and patients. Consumer loans through Banking as a Service offers certain advantages that Retail installment Contracts (RICs) do not. One of the advantages is less restrictions on rate caps in each state. ​

We have secured the use of a bank charter with Hatch Bank, giving us the ability to originate consumer loans under a bank loan program governed by regulations that do not have rate caps. ​

  

 

Who Can Utilize BaaS?​

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Most providers can utilize one or both models simultaneously. The decision to utilize a RIC vs av Consumer Loan product is solely based on what is negotiated in the contracting stage​

For patients this can depend on a few factors, including the providers configurations, and their credit profile​.

Patients and Providers in the state of Maryland are unable to utilize bank loans. ​

 

What’s Different?​

RIC

Consumer Loans
Under RISA state rate caps make the portfolio a lot less valuable because of the limited ROI​ Less APR restrictions at a state level. Maryland Providers and Residents are unable to participate.​
Patients/Clients can use any form of payment to make monthly payments including a credit card​ Credit cards can be used for down payments only. Monthly payments can be made with a checking, savings, debit or HSA/FSA card or paid by check.​
Less state specific regulatory constraints​ Stricter federal regulatory requirements. Eliminatesthe need for UCCC or Florida Doc Stamp TaxRequirements​
Term loan only offer​ Enhances our reputation and opens the possibility to offer revolving lines of credit​

 

Identifying the Program

Financial Instrument – Ops Portal​

To identify if a provider is on the RIC or Bank Loan program. The Financial Instrument under Loan Type within the provider settings. ​

 

Finance Agreements for RIC vs Bank Loan​

 

Provider Agreements for RIC vs Bank Loan​

 

Summary

  • Consumers on Bank Loan will always have the option to PAY BY CHECK at checkout. Can use CREDIT for down payment but not monthly payments.​
  • UCCC and Florida Doc Stamp tax registration are not required for providers on Bank Loan​
  • UI changes in Easy Apply: Patriot act disclosures on step 1, additional step 6 to review agreement
  • Providers and Patients who reside in Maryland cannot utilize Bank Loans​
    • NOTE: Patients will receive a message in the application flow if their physical address is in Maryland barring them from continuing if the provider (not in Maryland) is utilizing the bank loan program. Currently the application status will be set to Declined ​
    • NOTE: Align providers who use auto registration and have a physical address in Maryland, will automatically be enrolled in the RIC program.