Home Restaurant Profit Arlington first in Tarrant to regulate payday loans and auto titles

Arlington first in Tarrant to regulate payday loans and auto titles

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Agreeing that this may not be a perfect ordinance, but it’s a good first step, city council on Tuesday night approved restrictions on how payday lenders and auto lenders can to do business.

Arlington is the first city in Tarrant County to regulate the business practices of lenders.

The council proceeded to its final 9-0 vote the week after hearing from seven speakers, including lay leaders and the pastor of St. Joseph’s Catholic Church, who described how high the interest and fees charged by these Lenders have severely harmed people by causing them to lose their cars, file for bankruptcy and feel ashamed.

“It’s like walking in a spider’s web,” said Rozanne Veeser, president of the Fort Worth Diocesan Council of the Society of Saint Vincent de Paul. “You just don’t know how hard it is to pay it back. “

After the vote, approximately 100 members of Arlington churches, community groups, nonprofits, and a volunteer task force from the Office of State Representative Chris Turner, D-Grand Priarie, organized by the North Texas Industrial Area Foundation, gathered in front of City Hall to thank the Council.

Rev. Daniel Kelley, pastor of St. Joseph, commended the council for “standing up for our constituents by being the first town in Tarrant County to pass a payday loan ordinance.”

“This is not the end. This is only the beginning,” Kelley said. “We can now work together as a stronger community to do greater things to help our citizens.”

Two industry representatives urged the council to postpone the vote for 30 days, saying the ordinance could be improved.

The ordinance goes into effect Jan. 1, although Mayor Pro Tem Sheri Capehart has suggested that the schedule be brought forward in hopes of reducing the number of residents taking out such loans for holiday purchases.

Among the restrictions: limit payday loans to 20% of a borrower’s gross monthly income and auto title loans to 3% of the borrower’s gross annual income or 70% of the vehicle’s retail value.

Business practices regulations for so-called credit access companies are based on the rules of the Texas Municipal League. prescription model, which 27 other cities have adopted. Fort Worth remains the largest city in Texas not to have one.

These lenders have come to the attention of consumer groups, who accuse the industry of predatory practices that can lead to an increasingly deep cycle of capital, interest and penalties. Supporters in the industry argue that lenders serve clients who could not get loans elsewhere due to their income level or credit history.

Councilors Jimmy Bennett and Robert Rivera stressed that while the ordinance can help, individual financial education and empowerment are also essential tools.

“Collectively, we the people of Arlington need to be involved in this,” Rivera said at last week’s meeting, challenging those who spoke in favor of the ordinance to remain active in the effort. .

Other provisions of the ordinance include:

Limit the repayment terms to four installments each covering 25% of the principal.

Prohibit the renewal or refinancing of installment loans.

Make documents available in Spanish and Vietnamese as well as English.

Businesses must register with the city, keep loan records for at least three years, and provide clients with a list of nonprofit credit counseling agencies.

Zoning regulations on where these businesses can operate in the city are unfolding on a different track that goes first through the Planning and Zoning Commission, said Jennifer Wichmann, director of the management resources department of the city. city, which ran the ordinance until approval.

Editor-in-chief Robert Cadwallader contributed to this report.

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