San Antonio City Council targeting predatory payday loan companies
Ordinance limiting loan amounts & terms moves to full vote
The San Antonio City Council approved a draft ordinance regulating payday and auto title loans to be placed on the Aug. 30 meeting agenda where they could vote it into law.
City Council committee meetings are usually held in a smaller side room of the Municipal Plaza building, housing the more mundane day to day tasks of city government.
But Wednesday's B session was forced to move to the main chambers after dozens of supporters of District 1 Councilman Diego Bernal's ordinance regarding payday and auto title lenders, showed up for the proceedings.
"I recognized a lot of them as being from the center part of the city and the west side of the city and I think you'll find that in that part, the West, South and East side actually, that's where a lot of these store fronts are," said Councilman Bernal. "People have personal experience with pay day lenders and auto title lenders. There were a lot of stories in the room that we didn't hear today but we'll hear when we take it up with council."
The ordinance would limit the amount people could borrow based on their income as well as limit the amount auto title lenders could lend. It would also limit the amount of payments and the number of times a person can refinance a loan.
"The sad fact is that there is no limit to the interest and fees that can be charged with pay day or auto title loan," said Tim Marstad of AARP Texas. "We have seen 500 percent, we've seen 600 percent APR so there's some real abuses going on there and we need to address this core issue of the cycle of debt."
"What this ordinance does is it places parameters on the loan products without running afoul of state law," added Brett Merfish, an attorney with Texas Appleseed, which helps people stuck in pay day loan debt find resources to get out of debt.
Bernal's brief speech at the session was met with applause by the dozens of people who showed up in support. The draft ordinance passed and will be on the Aug. 30 agenda, where Bernal expects little opposition from the public aside from the payday loan companies.
"The industry is well-funded and deep pocketed and they already spent a tremendous amount of money on lobbyists to get us to look at another way of doing it or maybe back off but those efforts have been unsuccessful," said Bernal. "I think there's a real interest in slowing it down saying let's take more time but that's usually just code for trying to kill it and I have no interest in that."
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