North Texas Daily

City council votes 7-0 to pass lending ordinance

City council votes 7-0 to pass lending ordinance

March 19
22:59 2013

Daniel Bissell / Staff Writer

City council members at Tuesday’s meeting unanimously approved a motion for a new ordinance restricting the actions of payday and title loan companies in Denton.

After an hour of deliberation, the city council voted 7-0 in favor of setting forth the motion.

The ordinance stipulates greater transparency and lowers interest rates charged by enterprises. Payday and title loan companies have been increasing in volume in the Denton area, as well as the rest of Texas, since the recession began, causing citizens and city council members to seek ways to curb their growth and predatory practices.

“Denton is the first mid-sized city in Texas to head in this direction,” city councilman Kevin Roden said. “We’re really a leader in the state for what we’re doing.”

In December, a coalition of citizens and community groups called Denton for Fair Lending sought tougher restrictions on these companies at the local level. Several members of the coalition spoke at the meeting.

City councilman Jim Engelbrecht said the speed at which the motion was passed was remarkable.

“What is most interesting to me is the speed at which this has been accomplished,” Engelbrecht said. “Denton for Fair Lending came to us in December. Now it’s mid-March, and this thing has passed. I can’t remember anything this large in nature in the community that has gotten through this fast, and I commend everybody involved in this process.”

Denton for Fair Lending Member Kayce Strader said local nonprofits are strained as more citizens turn to them for help as they pay off their loan debts.

“The nonprofits are seeing more and more people come in needing assistance,” Strader told the council. “They can no longer support themselves as they pay off their payday loans and title loans.”

Resident and Village Church pastor Hunter Bonner spoke to the council. He said he had seen people’s lives altered by the high interest rates charged by some of these companies.

“Up until a few days ago I knew of these places, but I didn’t know how horrible people’s lives are made by some of these companies,” Bonner said. “Nobody is forcing anyone to take these loans, but 600 percent [interest] is ridiculous.”

Mayor Mark Burroughs said the reason these entities came into existence in the first place was legitimate – people needed cash fast, which they couldn’t acquire at banks.

“There are people that need a loan that have little or no credit, they need money fast, they have a crisis… and they need something to bolster them up, so this creature addresses that need,” Burroughs said. “The problem ends up being responsible alternatives that aren’t abusive become few and far between, and citizens are faced with no honest alternatives.”

He said the city is doing its best to “limit the abuse by these companies.”

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