New Anti-Poverty Coalition to Demand Dallas City Hall Zone Payday Lenders Out of Business

Categories: City Hall
paydayloans.jpg
Been trying to reach council member Jerry Allen ever since yesterday; no luck so far. But we know where he'll be at 3 today: in the Flag Room at Dallas City Hall, standing beside Dr. Frederick Haynes and Rev. Gerald Britt at an anti-payday lender press conference on behalf of the Anti-Poverty Coalition of Greater Dallas. Writes CitySquare president and CEO Larry James this morning: "The Anti-Poverty Coalition of Greater Dallas is a new coalition that seeks to move 250,000 people out of poverty permanently by 2020 by coordinating efforts to keep people from falling into poverty and increasing pathways out of poverty."

One of those ways, insists James and those attending this afternoon's presser, is shutting down and running out of town payday lenders whose loans, James writes, "create a treadmill of debt." The coalition has two exit strategies: getting the state Legislature to exclude payday lenders as credit service organizations (as proposed in HB 410 and SB 253) and having the Dallas City Council pass what it calls "a strong zoning ordinance to decrease the clustering of payday and auto-title lending stores."

Allen was down in Austin in late February begging state senators to protect the "long-term financial health of our Dallas citizens." And his trip came just two weeks after the council passed a resolution urging the Legislature to crack down on payday lenders and "pass any necessary legislation to protect the citizens of the State of Texas who may find themselves with no alternative but to seek the type of short-term, high-interest, unregulated loans offered by credit service organizations."

The coalition's proposed ordinance would "mandate that a minimum of 1,000 feet must exist in between payday and/or auto title loan shops," according to this morning's announcement. It's unclear, though, whether the council itself wants to take action against the payday lenders. Which is why the coalition, whose membership includes the local chapters of United Way and the Urban League, says it will announce plans at the press conference to "gather 5,000 signatures on a petition in support of this proposed zoning ordinance."
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44 comments
quick loan
quick loan

Payday advance is definitely a very efficient and efficient way of conference the surprising scenario which requirements for money especially when the sun is still to increase on the payday advance.

business funding
business funding

As long as they banned this automotive identify in addition to cash advance financial institutions, there'a about to become a helluva great deal of empty living space with Lemmon Ave.

Dallas Diner
Dallas Diner

Well, if they do away with payday lenders, they will just put more loan sharks in business. People need access to short term loans, and the best way to encourage an unregulated illegal activity is to regulate the legal alternative out of business. This measure will mean higher interest rates for the borrowers as well as more broken kneecaps to be fixed at Parkland on the county tab.

Adam Finch
Adam Finch

Question for all: This position makes no sense. I have never heard a single anti payday loan position that passes any sort of logic test.

1. These are free will loans: Borrow from friends/family, employer advance, payday loans, rob/steal, sell drugs, prostitution, etc. How does removing a choice benefit anyone? Why, not, as one poster suggested does the church not make loans to these folks? Let me guess...

2. I can name 10 fees that are calculated as an APR that are far more common and more expensive than a payday loan. Why not focus on fee like bounced checks, utility shutoff, or negative credit reports? A negative credit report can be 1000x higher as an APR if it effects you home loan rate over 30 years.

3. The rates are set by what makes money. If one provider could do it cheaper and still make money they would - it is called basic economics. More competition will in effect drive prices down. A rate cap will constrain access to credit...again, this is basic stuff that you should be able to understand.

4. How about focusing on education, financial counseling, job training - these things actually fight poverty. Payday loans provide credit, options really, for people who NO ONE ELSE WILL WORK WITH.

Please provide more logic on why regulating payday loans makes sense:

Thanks you

Larry James
Larry James

BTW--just for record, are you in the industry?

Adam Finch
Adam Finch

No I am not.

I just can't stand people that take positions based on senseless dogma. You are restricting the freedom from Americans with your "I know better than you" position and I can't stand that - especially without a lot of logic/thought behind it.

Adam Finch
Adam Finch

In reply to:"So, you are for absolutely no regulation of financial products, no matter how much they take advantage of the public? BTW--we do work on education, employment training, etc"

I guess your definition of taking advantage is different than mine: 1. I can see the good use of a payday loan - as I have pointed out, the APR is cheaper than most common fees. I had a few negative credit reports many years ago, that could have been solved if I had the foresight to get a payday loan. It took 7 years to get those off my record, FYI, and materially impact loan rates...

2. I can see poor usage as well, just like mayonnaise, alcohol, aspirin, and motorcycles. But I don't feel like they need to be outlawed either.

3. I have also seen the fees for these loans, and APR calculation in huge postings in a Payday Loan store, so I don't buy the 'tricking the consumer bit'

Larry James
Larry James

So, you are for absolutely no regulation of financial products, no matter how much they take advantage of the public? BTW--we do work on education, employment training, etc.

Jane Diekmann
Jane Diekmann

How are is this helping poor folks, taking away their credit options? This coalition should create alternate forms of lending that are up to its own high standards. Instead, they put all their energy into banning businesses that actually lend.

Larry James
Larry James

What we seek is a regulated lending product for low-income borrowers. There is no way imaginable that fees for service that amount to 400 to 600% interest can be just or not oppressive. We advocate a product with higher interest rates for basically unsecured debt, possibly in the 22-32% range with clear regs and explanatins and disclosures to those who need the services. No way the current loop hole oppression should be allowed to continue.

Adam Finch
Adam Finch

THINK please.

There will be no credit available @ 22-32% over the course of a year. NONE, unless you want to use your bank account to lend.

More THINKING for you:1. Please calculate the APR for a bounced check fee of a $40 check.2. Please calculate the APR for a late utility payment on a bill of $80

Hint it is higher than any payday loan. I simply cannot understand people that have a strong opinion on something that they are 100% clueless about...troubling.

Adam Finch
Adam Finch

Your position is simply amazing.

"The fees and the "rollover" factor traps people in deep debt;"Lack of education traps people in debt. Lack of employment trap people in debt. Lack of financial planning resources trap people in debt.

"Argue all you'd like, we are in touch with hundreds of consumers who have no choice;"What does that mean? They were forced to get a payday loan? So what happens when they are outlawed? What are they then "forced" to do?

"regulation can provide a remedy."What remedy is that? Less access to capital when needed. Look what happened as a result of credit card regulation recently enacted - there are unintended consequences...

"The demand is present; but consumers need protection from the affect of such desparate options for the very poor."The protection is education, jobs, subsidized loans, basically more competition. Regulating the only current option is assinine - compete with it and solve the actual issue you are dancing around, poverty.

"Calculate the APR of this product with all fees in and you cannot hold your position"Why don't you perform the simple exercise of calculating APRs for a variety of fees - guess what they are higher than a payday loan as an APR. I could name 10. So if a payday loan saves someone money on having a late car payment is it still a 'debt trap'?

"he people who know the system best are those crushed by it."What the heck does that mean?

Larry James
Larry James

The fees and the "rollover" factor traps people in deep debt; the poorer the more fierce. Argue all you'd like, we are in touch with hundreds of consumers who have no choice; regulation can provide a remedy. The demand is present; but consumers need protection from the affect of such desparate options for the very poor. Calculate the APR of this product with all fees in and you cannot hold your position. The CSO loophole will be closed. The people who know the system best are those crushed by it.

Rev. Gerald Britt
Rev. Gerald Britt

Robert, just to be clear, our goal is not to put them out of business.We want to close the loophole in state law that allows this industry to charge anywhere from 300%-500%+ (disguised as 'fees'). By doing this, they are able circumvent state usury laws. Many of the people who get trapped in a cycle of debt that leaves them in a situation worse than the one they got the loan for in the first place. These loans are 'rolled over', in many cases, several times if they can't be paid off in the assigned period (usually two weeks). And in more cases than many realize patrons get other payday loans to pay off the original loan.

We are seeking the zoning ordinance to because their clustering, particularly in economically challenged areas because of the nature of the business, but because they choke out other forms of economic development.

I know some of your readers don't agree. But in neighborhoods where these businesses proliferate (in one case with more nearly 20 on one street, it is not commerce, it is exploitation.

Marvin
Marvin

But if you thin them out, won't the ones that are left be able to charge even more onerous fees.

Rev. Gerald Britt
Rev. Gerald Britt

That's why we're working for the strongest possible ordinance and legislation at the state level. You simply cannot allow exploitation to masquerade as commerce. Our representatives have been lazy when it comes to doing the hard work of working with our communities to diversify the business landscape in these areas. Don't allow yourself to be fooled into thinking that South/Southern Dallas cannot support a broad economic development landscape.

Adam Finch
Adam Finch

Your position makes no sense. I have never heard a single anti payday loan position that passes any sort of logic test.

1. These are free will loans: Borrow from friends/family, employer advance, payday loans, rob/steal, sell drugs, prostitution, etc. How does removing a choice benefit anyone? Why, not, as one poster suggested does the church not make loans to these folks? Let me guess...

2. I can name 10 fees that are calculated as an APR that are far more common and more expensive than a payday loan. Why not focus on fee like bounced checks, utility shutoff, or negative credit reports? A negative credit report can be 1000x higher as an APR if it effects you home loan rate over 30 years.

3. The rates are set by what makes money. If one provider could do it cheaper and still make money they would - it is called basic economics. More competition will in effect drive prices down. A rate cap will constrain access to credit...again, this is basic stuff that you should be able to understand.

4. How about focusing on education, financial counseling, job training - these things actually fight poverty. Payday loans provide credit, options really, for people who NO ONE ELSE WILL WORK WITH.

Please provide more logic on why regulating payday loans makes sense:

Thanks you

Hannibal_Lecter
Hannibal_Lecter

No mention that Jerry Allen is a banker.

Must be nice to just zone your competition out of business.

Admin
Admin

How is this when Haynes is supporting Rawlings, who made a killing off of payday loans and only sold it when he got the homeless gig?

Larry James
Larry James

To clarify our brand, Robert, it's CitySquare, not Four Square. :) Thanks for the coverage. And the goal to lift 250K oiut of poverty by 2020 is a goal shared by the Anti-poverty Coalition and the United Way of Metro Dallas. UW structured part of its annual fund allocation around this ambitious goal. The solution will combine many approaches and tactics. This is an important step.

Nachoman
Nachoman

IMO you would have success in the long term if you focused more things for the community like continuing education.

gabbahey
gabbahey

I've been repaying a payday loan for awhile now, something happened beyond my control, and with no options, I got into their debt loop. I feel like I see the carrot dangling in front of me, but I'm on a treadmill, and getting nowhere fast. Credit is maxed out, options are too few and too far between. Not sure when I can get out of it.

Their business models are, by design, financially painful, while saving your ass at the same time.

For those types who like to impose their sanctimonious beliefs over my financial well-being (like most churches and republicans seemingly like to do), what would you do if you had no other alternatives when your world comes crashing down on you like a ton of bricks?

Taking away the options available to us poor-folk does nothing to help.

Montemalone
Montemalone

They just declare bankruptcy, start a new corporation, take on more publicly subsidized debt, and get on with life.

Guest
Guest

I'm just not comfortable with the idea of zoning perfectly legal businesses out of business.

Justin Schneider
Justin Schneider

I think Mr. Wilonsky meant "CitySquare," not "FourSquare." But I'm sure people will be checking into the meeting through Foursquare.

Justin Schneider
Justin Schneider

I think Mr. Wilonsky meant "CitySquare," not "FourSquare." But I'm sure people will be checking into the meeting through Foursquare.

Blerg
Blerg

I can only guess that for some people that are financially literate, but also happen to be poor, these pay-day advances can be a god send, but those types of "customers" at payday advancers are in the minority. Here is how you address the problem: change the maximum legal interest rate in the state of TX to get rid of what are essentially usurious lending practices.

Other states cap the level of interest that these places can charge, and believe me, it is still high enough to make it a profitable business and pay day advancers are still everywhere in those states. But, the way it is setup here, if you make one mistake in paying back your loan, you will pretty much be in financial ruin since the interest can be 10x what it is in other states.

Kathy S
Kathy S

i've gotten three of these loans in the past year, and i can tell you from experience that they were LIFESAVERS! my car got totaled in an accident on i-35 and the insurance company of the at-fault driver didn't pay me enough to get a reliable car because they knew i was desperate and would take whatever they gave me. well, i still had to rent a car for the weekend and my credit is shot, so i needed cash to pay for it. thank goodness i could get cash immediately and was allowed to pay it off over 10 installments otherwise i would have lost my job and then who knows what other bills i wouldnt have been able to pay. what if payday lenders went away?! or if they couldn't make enough money off of people like me to give me loans because they have to charge rates like the banks do? please dont take my options away from me!

TimCov
TimCov

I wonder how many people who object to pay-day lenders have ever been in the situation where you need to get your car fixed before your next payday or you lose your job? Will they loan the customers of these places money without any collateral?

I have been in the position to need a payday loan. Due to bad decisions I made, I had bad credit and needed to get my car working or I was going to lose my job. Good luck on getting a bank to loan $300 for a week or two (if you are poor). DART does not run 24/7 and to everywhere that there is work, so it is not always an option. The key is to not borrow more than you need and just pay it off as quickly as possible. I have been poor and know others who have been poor (and are poor). There are times when you can't avoid being poor. But, the decisions you make can keep you there. Do you spend money on beer and tobacco, or do you pay off your debts? Do you spend your time watching TV or trying to learn new skills that will get you more money?

Anonymous
Anonymous

I agree TimCov. What are the statistics about the number of people for whom a payday loan is a lifeline that allows them to continue working their way out of poverty vs the people who end up in a "treadmill of debt"? I don't know the answer, but I bet the people who want to outlaw this product don't know it either. Who will provide these people with credit? If you won't lend it directly to them, or you're not willing to risk the money you've deposited in a bank, then you've got no business cutting off their only access to the credit you take for granted.I'd also ask what's the solution? If people say it's more direct aid, I will point out that the person who is irresponsible with a payday loan will be even more reckless with free money that they don't ever have to pay back.Also, what's next? We just gave MoneyGram a subsidy to move to downtown Dallas, but they arguably charge higher than bank rates for a service that is mostly used by poor immigrants. Do we kick them out of town too?

TimCov
TimCov

Going by the following link, 90% of the borrowers pay their loans on time. This is the same rate as sub-prime home loans. http://reason.com/archives/200...

JQ
JQ

Interesting article. Jesse Jackson hosted a debate on WORD last weekend. It is really helped me understand the need for these businesses. Of course, some are going to be good actors and others bad.

http://dvr.thewordnetwork.org/...

Anonymous
Anonymous

You have to be careful though. A lot of those are paid back with other payday loans, just like many subprime mortgages were paid back w/ other subprime mortgages, which gave the illusion of safety and high repayment rates.

Daniel
Daniel

Well, at least it might keep 2500 working-class people from falling into poverty.

Daniel
Daniel

Er, that was a response to Nacho Nachoman.

Alexander Drake
Alexander Drake

To paraphrase author Colson Whitehead: Saying you own a Payday Loan business can be translated as you "grease the gears of hell with the blood of poor people."

rebecca
rebecca

It's too bad the churches in those areas don't make small loans to their congregants who desperately need them. They could pay them back thru the collection plate. It's not like anyone else is going to lend them money.

Blerg
Blerg

Those pay day advancers are no different than loan sharks. Pay day loans at 1000% anual interest rate. I think the only difference might be that most of these places don't have an italian stereo-type named Paulie with a louisville slugger that breaks your knee caps if you miss a payment, but I'm guessing that the only thing stopping them is that at least that part of the business is now illegal.

Montemalone
Montemalone

If they shut down the auto title and payday lenders, there'a gonna be a helluva lot of vacant space on Lemmon Ave.

Anonymous
Anonymous

Lemmon? The commercial vacancy rate ALL over Dallas will skyrocket

Ben
Ben

The sooner those bloodsuckers are our of biz the better. I've known plenty of people who got suckered into those payday loans. They have all hated their life since.

Nachoman
Nachoman

I think its going to take a LOT more than this to reach that pie in the sky dream of getting 250,000 people in Dallas out of poverty.

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