KTAB/KRBC: The Abilene City Council has voted down an ordinance that would regulated payday loan establishments after hearing from almost 40 people during a marathon public hearing at Thursday’s city council meeting.
The issue was discussed for about 4 hours as the city council sat and listed to both those in favor the regulation and those apposed to them.
The proposed ordinance would have instated the following restrictions and limitations on payday/auto title lending services in Abilene:
1.Requires registration of all Credit Access Businesses within the City limits.
2.Requires the businesses maintain complete records of all loans for three years and to make the records available to the City upon request.
3.Limits the loan to no more than 20% of a consumer’s gross monthly income and title loans on vehicles to no more than 3% of the consumers gross annual income or 70% of the retail value of the vehicle.
4.Provides that repayment in installments may not be in more than 4 installments.
5.Prevents renewals or refinancing of installment-payment loans.
6.Requires that any agreement be written in the consumer’s language of preference, including English and Spanish.
7.Referral to credit counseling is required.
8.State mandated quarterly reports and any other requested information must be submitted to the City.
Those in opposition of the restrictions argued that some people do no qualify for or cannot get loans otherwise, and others argued that implementing the restrictions would cause several payday/auto title loan businesses to close, resulting in significant job loss.
Those in support of the restrictions argue that these payday/auto title loans start a vicious cycle that causes consumers to pay hundreds, if not thousands, of dollars in addition to the initial cost of the loan due to high interest rates and the loans’ rollover policy.
These additional payments, according to those in support of the restrictions, cause financial turmoil for many individuals and families that turn to payday/auto title loans in times of need.
City Council members will make a final decision on this payday loan/auto title loan ordinance during their weekly meeting on Thursday, April 27th. A public hearing will take place prior to the decision.
There are currently no State or Federal regulations on payday/auto title loans.
The council voted the ordinance down by a vote of 3 to 3
For: Abilene Mayor Norm Archibald, Councilman Kyle McAlister, Councilman Anthony Williams
Against: Councilman Bruce Kreitler, councilman Steve Savage, Councilman Shane Price