Before Council Takes Out a Payday Loan, Sneak a Peek at Possible New Regulations

Categories: City Hall
paydayloans.jpg
If nothing else, the timing's certainly good: Just three days after Mayor Dwaine Caraway branded mayoral candidate Mike Rawlings the "Payday Loan King" in a series of ads to which Rawlings later responded, the city council's Budget, Finance & Audit Committee is about to take up the subject of how to regulate the quick-cashiers. Tune in for what's sure to be a spirited conversation about how to regulate so-called alternative financial establishments, which surrounding cities have limited by erecting various roadblocks -- like, say, Farmers Branch and Richardson's specific-use permitting process and Irving's rules disallowing two payday lenders from existing within 1,000 feet of each other.

This has already gone before the City Plan Commission, which ixnayed minimum separation requirements back in February. But the council continues to make this a priority. This morning's briefing contains a few rules and regs up for consideration, among them:
Minimum Separation: No alternative financial establishment may be located within 1,500 feet, measured from property line to property line, of any other alternative financial establishment.

Minimum Distance From Residential: No alternative financial establishment may be located within 300 feet, measured from property line to property line, from a lot in a residential district.

Stand Alone Building: An alternative financial establishment may only operate within a freestanding building and may not operate in the same structure as any other use.
But council may not have to do anything: There are several bills in the state Legislature attempting to regulate payday lenders, and the city may wait to see how those go before wading back in those waters.

Update at 11:03 a.m.: Theresa O'Donnell, director of Sustainable Development and Construction, has just begun her presentation to the council. She's outlining the "alternatives" right now. Watch.
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35 comments
moneymatch
moneymatch

Payday cash Loans are generally short-term, great attention loans. They are usually acquired from either a walk-in store or from a organization online. Most people get these great attention loans when they need help tiding them over to their next payday.

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quick loan

If your per month salary doesn't protect than surprising expenses or expensive car fix, a temporary quick loan advance is the ideal remedy. You only ask for what you need, and your mortgage is approved based on what your income allows you to perfectly pay back. This means that you will never end up in a scenario where you can't fulfill your per month payments. 

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Pay day Loans

Pay day loans are very useful to take care of the small but immediate economical needs that can demand or worry a operating customer. A concerned or cash-strapped operating customer would normally have lower efficiency. Hence, pay day economical loans function to reduce the significant customers of their economical problems to focus on their work.

Merlin09
Merlin09

Payday loans are supposed to be used as an extra "payday" which is where they get their name. Therefore, they are given in small amounts that you should be able to repay the next time you get a paycheck from work. PaydayLoans

Jessica06
Jessica06

A payday loan advance may seem attractive there are some points you should know of before implementing for this bank financial loan. First of all, don't utilize if you can find other resources of money, may that be from family, associates or even asking your superior for an progress on your future income.

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jessica014
jessica014

Hi to all, Thanks for your nice post.Payday loan is one in which the bank makes a loan in exchange for a promise. The guarantee may take the form of a house or a car. As there is no guarantee, the bank tends to reduce theLawsuit Loan interest rate for this type of loan. However, there is a catch. If you can not make the payments, the bank can legally take possession of the property that you claim as collateral.Keep posting such a nice post.

Rosalie12
Rosalie12

I would like to thank you for the efforts you have made in writing this post. I am hoping the same best work from you in the future as well. Payday loans are designed for cash emergencies. They are meant to provide a helping hand to those who are in a financial jam. Emergencies do not happen to everyone and at all times, but when they do happen, it is essential to have the funds to cover these expenses.

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Alibaba
Alibaba

"There are several bills in the state Legislature attempting to regulate payday lenders, and the city may wait to see how those go before wading back in those waters." Regulating payday lenders is good and all, but I hope they don't implement too much regulations as to make the business much tougher to run. Online payday loan companies are very helpful to people in need of money.

Mindcast_m
Mindcast_m

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Thіѕ morning’s briefing contains a few rules аnd regs up fοr consideration, аmοng thеm: Minimum Separation: Nο alternative financial establishment mау bе located within 1,500 feet, measured frοm property line tο property line, οf аnу οthеr alternative financial establishment. Minimum Distance Frοm Residential: Nο alternative financial establishment mау bе located within 300 feet, measured frοm property line tο property line, frοm a lot іn a residential district. Stand Alone Building: An alternative financial establishment mау οnlу operate within a freestanding building аnd mау nοt operate іn thе same structure аѕ аnу οthеr υѕе. Bυt council mау nοt hаνе tο dο anything:

3rd Wheel Marketing
3rd Wheel Marketing

In the 1980's, they shut down the pawn shops. In the 2000's it was Strip Clubs, around 2007 it was black clubs in Deep Ellum (2010 black clubs on greenville ave), in 2008 or 09 it was the tattoo parlors, in 2010 it was the car lots on Ross Avenue... now it's check cashing places.

Where the fuck does the city get off deciding which businesses are acceptable and which ones are not? What about smoke shops, I guess they'll be next... ooh we can't have Tejano Bars or Drive Thru Beer Barns. Those liquor stores are pretty seedy (not Siegels, we'll just shut down poor people liquor stores). Well, shit those laundry mats are kind of nasty too, better zone them out of existence. Taqueria's are just a breeding ground for crime. Damn pool halls incite gambling. Antique stores have too much old stuff in them, better get rid of those and some new stuff will take its place.

I'm not going to bullshit around, Pawn Shops, Check Cashing Places, We Tote The Note Car Lots & Strip Clubs all trade in desperation. But do a lot of white collar businesses and they don't get fucked with. Bottom line poor = illegal.

Mister_Mean
Mister_Mean

When I was at the county office to pay my property taxes the clerk was talking about the penalties and interest for late payment of property taxes to the guy in front of me. I replyed that the interest was just like what was charged in those pay day loan places. The clerk agreed with me. Something to think of when you get your statements (probable valuatiion increases) this weekend from the Dallas County Apprasail Distirct. "After all (the housing bubble) is not happening here-just look at all those construction craines we can see from city hall"-- the mantra from our city govenment.

Guest
Guest

So, we have an article a week or so ago talking about how increased competition due to the elimination of dry neighborhoods has caused the entrenched liquor stores to lose business and force prices down.

So now we're considering passing new regulations to eliminate competition in the payday loan industry. Judging by the wet/dry elimination aftermath, the assumed effect of this will be to increase consumer costs and increase profits of established payday lenders.

I was under the impression that people use these lenders because they feel they need to use these lenders, not because they don't need to use them but, hey, they're there, so they might as well. Why would anyone assume that the market need would disappear if the number of payday loan locations decreased?

They should call this the Payday Lender Profit Protection Law.

Ben
Ben

So what does the Pussy-Whipped Mayor think of these proposals?

Bill Holston
Bill Holston

Isn't there a zoning issue as well. If you happen to live in a lower income part of town, you really don't want a raft of pawn shops and pay day lenders. I know I don't. Yes, there's a moral dimension to this predatory lending. But, that needs to be addressed at the state level. Melissa del Bosque wrote this great article on how this actually works:https://www.texasobserver.org/...

Metroplexual
Metroplexual

This is so Dallas City Council. Where regulation and reform is needed is in their business practices not their friggin locations.

They server a vital need to many "unbanked" people. In addition to loan sharking they cash checks and often provide money orders and wire services. The reform needed most is to allow their victims to pay down the principle in installments. Presently they have to pay the whole principal at one time or face another 30% or so interest payment each month. Thus it becomes almost impossible form many to repay in a reasonable amount of time and they spend hundreds of extra dollars.

That's the problem.

Scruffygeist
Scruffygeist

Build overpriced, signature high-rise using design elements that will look dated immediately. Make all loan places have to open in it. Build streetcar line from south Dallas to access it. Kick back, put feet on desk, smile, and declare Dallas even more world-class.

Guest
Guest

So, giving loans to people who otherwise couldn't get them is bad, but using government to legislate legal and necessary businesses into oblivion is good? Better hope those oh so wise politicians never decide your business needs to go.

Robert Wilonsky
Robert Wilonsky

This is going to the council at the end of May, over Vonciel Jones Hill's objections.

Robert Wilonsky
Robert Wilonsky

Margolin finds the stand-alone suggestion "more objectionable" than allowing payday lenders in strip centers.

Allen asks how many are in the city? He's told 100. He says "more than 250." Allen says: "I look at this as another step in developing a broader range in financial stability" for the citizens of Dallas, referring to Bank on Dallas and so forth.

Robert Wilonsky
Robert Wilonsky

There's a fourth alternative that isn't in the briefing: not allowing payday lenders within 500 feet of highways. But city staff says it's not viable. Natinsky wants to know if there's a staff recommendation. O'Donnell says that after the CPC weighs in, "we don't provide a staff recommendation. We have listened to a lot of dialogue" from speakers in front of council during public commenting periods.

TimCov
TimCov

I support these requirements, if they make them also apply to banks, pawn shops and any other business that offers loans.

Anonymous
Anonymous

By all means, let's make sure they can't locate close to one another so that customers could quickly go from one to another and compare prices. Let's also make sure they're not close to people's homes, where it's convenient for them. And finally, let's make sure that we force them into one specific structure by requiring a standalone building for reasons that I absolutely cannot imagine.

Jay Hawk
Jay Hawk

If you don't let payday loan establishments take advantage of a desperate working class, then you're not a world class city.

Anonymous
Anonymous

All it will do is force people who need payday loans to have to travel further to get them and create payday loan "ghettos" once you cross the magic line and they finally become legal. Much like Industrial was crowded w/ crappy liquor stores out of necessity, this will have the same effect. Poor people who need these loans can't spare the extra gas it takes to drive further from their homes. Or else they will have to take public transportation, which is slow, and they are usually working 2+ jobs to make ends meet. Then you have to think about the increased crime. Once an area becomes the established area for getting your cash because the rest of the locations have been zoned out of legality, how long before criminals target that area? You think criminals target the wealthy? Think again - cash is cash and there's a pretty good chance that if you're walking out of one of these places, you have some on you.

Anonymous
Anonymous

If you don't want to live around business that provide needed services to poor people, sell your house and move so you don't live near poor people.

stupidisasstupiddoes
stupidisasstupiddoes

Please explain to me how this is any different that what Chase or Bank of America charges for credit cards, loans and yes, check-cashing.

TimCov
TimCov

I'm sure they would love to get rid of the Observer, if they could find a way around that pesky constitution.

Wylie H.
Wylie H.

You beat me to it. The reason to require a stand alone building is to drive up their cost of doing business, all of which will be passed on to the end consumer.

It's the law of unintended consequences at work.... it's pretty clear that almost no one on the current council has ever studied economics... or business...... or how to run a city.....

Metroplexual
Metroplexual

RE your response aboue to Metroplexual

I was just trying to explain to the commenter above the difference between payday loan and bank credit cards. Of course these people who borrow from payday have no other place to go. My previous point is if you want to regulate and reform the payday loan industry there are other actions that would be more beneficial that limiting where they can locate.I don't see anything wrong with usury limits and mandating some kind of plan for installment payments. There is still money to be made in providing services to the unbanked and good money too without such draconian, coercive practices.I've talked to several people in this business and two of them have described it as "a license to steal." "easy money."I don't want to see them shut down as I appreciate the need for short term finance.

Metroplexual
Metroplexual

Charge $1000 to your Visa card. Interest is 22% per annum. You can pay as much or little (minimum) as you like. Interest is $220 per year or $18.33 per month plus a few small fees. You can pay on the principal in any increment you choose. The interest charged is on the unpaid balance. It's unsecured, based on your credit worthiness. If you miss a payment or are late with a payment you pay a reasonable (but very annoying) fee.

Borrow $1000 from a Payday business. Interest is 30% per month. You can't pay toward the principal, you must pay it all at once or pay the monthly interest. Interest is $3600 per year or $300 per month. The loan is secured by post dated checks, car titles or what's available to the borrower. Miss a payment and you lose your car. I don't know what late fees are but I would expect they are higher than Visa member banks charge.

stupidisasstupiddoes
stupidisasstupiddoes

I will agree with your premise that the reform needed to allow people to pay down the principal in installments, but how much closer does that take the payday loan places to becoming de facto banks? If they are not, and there is a difference, then why aren't they in the first place? Because the people taking out these loans are considered "high-risk" or are not credit-worthy.

I once had really bad credit that I was in the process of repairing and one day I got a credit card offer in the mail from a legitimate bank with a $300 limit, but I had to pay a $125 "activation fee" (it claimed that I was also "pre-approved") and with a 50% interest on it. Is that something that you think the "unbanked" should have more access to instead of payday lenders? How do plan for them to recoup their money when the applicants just decided to quit paying? Break his knees? Take away his car? Charge him mire money?

Anonymous
Anonymous

Most of the people who need payday loans already went to the bank or credit card company and got turned down. Why else would they bother going to the payday lender? What you'd basically like (based on your anecdote) is for lenders to make loans to all people under the same terms, regardless of the default risk that they pose. I think there may have been some of that going on prior to 2007-2008, and we all know how that worked out for everyone. The problem is the limited job opportunities available to the poor and their economic prospects, not the ways that they finance their consumption.

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