Arlington council member Robert Rivera had heard more than enough horror stories. So last spring he floated the idea that he and his colleagues enact restrictions on payday loans similar to the highly successful ones passed in Dallas and more than 20 other Texas cities.
The proposal drew silence.
But a few months of effective education on this issue has made a huge difference. This week the council voted 8-0 for a plan that caps loans and requires payday and auto title businesses to register and adhere to other fair business practices. Now all that remains is for council members to formally approve the new rules at a second and final vote Tuesday.
While many payday loans initially involve small amounts to be repaid in full in a short time, they usually end up creating anguish and a pile of debt for unsuspecting borrowers. Consumers who aren’t able to make full payments take on debt and fees that they can’t repay. Eventually, these finaincial troubles hurt neighborhoods and can keep working-class borrowers from a better financial future, a point we have repeatedly made in our Bridging Dallas’ North-South Gap project.
Getting once-reluctant Arlington council members to oppose the political clout of the payday industry is no small achievement. Fort Worth, Irving and Arlington represent the home turf of two of the nation’s big payday lenders, Ace Cash Express and Cash America, both of which cast a large shadow.
However, the political landscape changed in Arlington this fall after the Texas Catholic Conference, the public policy voice of the Catholic Bishops of Texas, linked arms with longtime payday lending opponents such as Texas Appleseed, Texas Fair Lending Alliance and Saint Vincent DePaul Society, and several civil rights groups.
In a single voice, they challenged Arlington to put limits on payday and title loans, buttressing their call with personal testimonies about how seemingly innocuous payday loans upended lives: A person needed money quickly because he had a car to repair; another was faced with an unexpected medical bill. They borrowed $500 to $1, 000 from a payday lender. When they couldn’t repay the entire loan by the next payday, within a matter of weeks, a $500 loan became a $2, 000 or larger debt.
People sometimes need short-term financial help, but a loan that perpetuates crippling debt is a bad deal. The new Arlington rules would make the transactions a bit fairer to consumers.
Arlington is standing up for its residents. Other cities still on the sidelines must do the same.
How do Texas cities stack up?
Arlington is about to join 26 major Texas cities that have adopted tougher payday lending rules, including: Amarillo, Austin, College Station, Corpus Christi, Dallas, Denton, El Paso, Flower Mound, Garland, Houston, Midland and San Antonio.
Payday loans in Australia are part of the small loans market, which was estimated in 2008 to be between $800m and $1bn a year, although it seems likely that the true market was and currently is higher than this.
The growth of this market mirrors the growth in Canada, the United Kingdom, and the United States. Because the market for small loans...
Payday Advance Loans Windless Swooper Feather Banner Flag Sign
Office Product (Accent Printing & Signs)