Houston Mayor Annise Parker proposed an ordinance back in November that if passed, would heavily restrict payday and auto-title loans, making Houston the fifth major city in Texas to do so. Since Houston is the biggest city in the state it only makes sense that it also has the largest number of payday and auto-title stores. All combined, these stores did more than 1 billion dollars in business in 2012.
These businesses made their money preying on vulnerable
folks to make an absurd amount of profit, with annual percentage rates that
often exceeded 500%. These practices are driving consumers deeper into debt by
making it difficult to pay off their principal amount with all the fees and
interest accumulating at a rapid rate.
If passed, consumers would be limited in the amount of a
loan they can receive that is dependent upon their monthly income or a
percentage of what their car is valued at. Mayor Parker initially wanted a “Houston
only” measure, but soon realized that joining the other 4 major cities that
already passed restrictions on these loans would only strengthen the proposal. Without
a doubt it’s interesting to see these “loan” stores bowing out, and some of the
larger and more well- known stores pulling out of the state. To see a list of
the other major cities that have already passed ordinances or to see which
company is pulling out all their 28 stores from Texas, click here.
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