City council discusses possible ordinance regulating payday loan lenders
Tue, 22 Jul 2014 01:07:14 GMT —
City council members and residents met to discuss possible new ordinances that would regulate payday and car title loan lenders on Monday.
Payday and car title loan lenders are unsecured, short term loans that usually only requires an ID and checking account.
City Council member Lelia Escajeda said the interest rates are what leads to debt for people who get these loans.
"In Texas, you can charge up to 500 percent APR on these loans. Texas lets Payday lenders charge anything they want up to those amounts," Escajeda said.
She said people usually take out these loans because they are not aware that banks give out loans for many of the same things lenders give to people.
Escajeda said this meeting to hear out the residents, and see where to go from there with the ordinances.
" We're gathering thoughts and input and fashion the ordinance after that if that's what we decide to do," Escajeda said.
Dallas City Council member Jerry Allen was also at the meeting to explain the ordinances.
He said one ordinance requires these lenders to obtain a special use permit through the city. The second ordinance would require lenders to create a 4 payment installment plan so people will not fall into debt. Another part of the ordinance is lenders would only be allowed to lend up to 20 percent of a person's income.
Allen said Dallas, along with 17 other cities, have this ordinance already in place. He said since this ordinance was put in place in 2011, he hasn't seen any new loan lenders.
"The Payday lenders nor the car title loan lenders have gone up to city council, so since then not one has opened," Allen said.
He said these ordinances would help people taking out loans prevent from falling into debt. Allen said the extra money they would save from not paying high interest rates would allow them make better money choices in the future.
"These guys have families and kids, so this would help them move on and do more with what they have," Allen said.
Escajeda said while these loan lenders are everywhere, they're centrally populated in low income areas.
The meeting took place at Heritage Room in the Civic Center.