On Thursday, the San Antonio City Council plans to discuss and possibly pass an ordinance regulating short-term lending companies in the city.
The ordinance which was brought forth by District 1 Councilman Diego Bernal, would limit loan amounts to 20 percent of a borrower's gross monthly income.
A person who earns $2,000 a month couldn't borrow more than $400. It would also limit repayment plans to four installments or three rollovers/refinances.
For auto title loans, the amount would be the less of 3 percent of a borrower's gross annual income or 70 percent of the vehicle's value.
"I can accept that there is a market out there for short-term loans," said Bernal from his City Hall office. "All we're trying to do is make sure that once someone enters into one of these contracts, there's an opportunity for them to pay their way out."
The Consumer Service Alliance of Texas, which is a trade association that supports short-term lenders, released a statement saying the city's proposed ordinance "significantly restricts access to credit for San Antonio consumers" and is a "one-size fits-all approach."
Bernal has met with local short-term lenders but said those meetings have found little success.
"They don't speak with a uniform, unified voice," he said. "So one group will want one thing with the ordinance and another group will want something completely different."
Similar ordinances in Dallas and Austin were met with lawsuits from the short-term lending industry and Bernal expects the same if the ordinance passes Thursday.
With the vote coming so close to the next legislative session, he's hoping state leaders take notice to what he calls a growing problem.
"This sends a very clear message to Austin that Austin, Dallas and San Antonio want something done at a state-wide level so we don't have to do this checkerboarding around the state," he said.