City Council Approves Payday & Auto Title Lending Ordinance
By Ryan Hunt
Posted on November 18, 2015, November 18, 2015
Auto Title Lending Ordinance

The Arlington City Council approved a Credit Access Business ordinance addressing payday and auto title lending at the evening session on November 17, 2015.

The City Council approved this ordinance to address concerns from residents that the practices of certain credit access businesses cause customers to become trapped in a cycle of short-term, high interest loans resulting in large debt and huge payments. The Planning and Zoning Commission is currently working on zoning regulations related to these businesses to be included in the Unified Development Code. Once they recommend approval, it could come to the Council as early as January 26, 2016.

The credit access business ordinance includes the following provisions:

  • Limiting loans to 20% of gross monthly income.
  • Limited auto title loans to the lesser of 3% of gross annual income or 70% of retail car value.
  • Limiting repayment to 4 installments with each repaying at least 25% of principal.
  • Prohibiting renewals or refinancing of installment-payment loans.
  • City registration
  • Maintaining loan records for a minimum of 3 years.
  • Violation or infractions fined up to $500 each.
  • If consumer is non-English speaker, loan agreements must be translated into English, Vietnamese or Spanish. If consumer is non-English speaker and unable to read, loan agreements must be read, in one of those three languages.
  • A list of non-profit groups that offer consumer credit counseling provided to consumers.

The City of Arlington advises all credit access business customers to look for the City registration certificate on the wall of the business. The ordinance will become effective on January 1, 2016.

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