After nearly five months of work, the Arlington City Council on Tuesday night is set to act on proposed restrictions for payday loan providers, including limiting loans to 20 percent of a borrower’s gross monthly income.
Similarly, auto title loan providers — defined, along with payday lenders, as “credit access businesses” — would be restricted to 3 percent of the borrower’s gross annual income or 70 percent of the vehicle’s retail value.
The business-practices regulations, which would take effect Feb. 1, mirror the Texas Municipal League’s model ordinance that many cities have adopted. City staffers also received input from industry representatives.
Such lenders have drawn fire from consumer advocacy groups, which accuse the industry of predatory practices that can roll into an ever-deepening cycle of principal, interest and penalties. Industry supporters argue that the lenders serve customers who could not get loans elsewhere because of their income level or credit history.
Other provisions in the proposed ordinance include:
▪ Limiting repayment terms to four installments that each cover 25 percent of the principal;
▪ Prohibiting renewal or refinancing of installment loans;
▪ The businesses must register with the city, maintain loan records for at least three years and provide a list of nonprofit credit-counseling agencies to customers.
Zoning regulations on where such businesses can operate in the city are proceeding on a different track that first goes through the Planning and Zoning Commission, Jennifer Wichmann, director of the city’s Management Resources Department, said Monday.
As a reliever airport seen as essential to the region by the FAA and state, the Arlington airport is eligible for federal and state grants that cover up to 90 percent of the cost of certain projects. To remain qualified, the airport must periodically update its planning documents and submit them for approval to the FAA and the Texas Department of Transportation’s Aviation Division. The airport’s current plans were adopted in 2007 and are now obsolete.
Meanwhile, the airport’s governance documents, which include the airport ordinance, have been modernized to reflect the airport’s current operating environment and changes in regulatory standards. City staffers held meetings with airport tenants in September and October to address concerns and answer questions.