Thursday, June 23, 2011

Another Victory in the Battle Against Predatory Lending!

Yesterday, was a red letter day for our public policy work at CitySquare! Working with the Anti-Poverty Coalition, we secured from the city council passage of a second zoning ordinance to regulate payday lending in Dallas. Ann Baddour of Texas Appleseed, an advocacy organization in Austin, has said that this is 'the strongest predatory lending ordinance in the country'. If that's true (well, even if it isn't accurate), this is quite a feat! 

Dallas council passes stringent rules limiting payday lenders


Rudolph Bush / Reporter

"The Dallas council today passed another set of rules aimed at limiting payday lenders reach in the city.
Led once more by council member Jerry Allen, the council unanimously agreed that payday and car title loan shops must henceforth register with the city."

"More significantly, the ordinance puts specific restrictions on the amount of loans that can be extended and the terms under which they must be repaid."

"Specifically, the law limits payday loans to no more than 20 percent of a person's gross monthly income. Car title loans can be no more than 3 percent of gross monthly income or 70 percent of the value of the car that serves as collateral."

"The rules also require that the loans be repaid in no more than four installments and that they not be refinanced or renewed more than three times."

"The law also requires that fees not be capitalized as principal on the original loan."

"The ordinance is the latest effort by the Dallas council to restrict payday lending, something council members and many charitable institutions have come to see as a scourge of poor communities."

"In late May, the council passed new zoning restrictions on payday lenders."

"Under that rule, so-called alternative financial establishments must get a special-use permit from the city to open their doors. They cannot be located within 1,500 feet of another payday lender, and must be 500 feet from highways and 300 feet from residences."

Why have we been doing this? Read the message sent to us by one of our colleagues at AARP. Ironically, it was sent to me yesterday while I was in the council chambers waiting for the vote to be taken...

"a lady in Balch Springs [a small community just outside of the city limits southeast of Dallas]...took out an auto-title loan for $200 to pay for car repairs.  She got behind on last month’s payment (rollover fee)and they reposed her car after she has already paid more than the original loan amount in monthly fees .  She is 69, in poor health, has no access to public transportation and the car meant everything to her and was her connection to her community, the supermarkets, doctors, church, etc.   Lone Star Title told her that if she could make a payment for $631 she could get her car back.  That is more than her monthly Social Security income!"

That's why we worked so hard on this. And that's why we've at CitySquare must work to fight poverty by service and by speaking out for women like this!

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