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Local News

October 19, 2013

Commission taking another look at payday loan companies

GREENVILLE — The Greenville Planning and Zoning Commission intends to once again consider what can be done about payday loan companies inside the city limits.

The commission is scheduled to meet Monday, to discuss the “regulation of payday lenders and/or other Alternative Financial Services business in Greenville.”

City attorney Daniel Ray said there may not be much the City of Greenville, or any municipality, can do concerning the companies, as the state legislature has also failed to take significant action about the issue.

“They have a huge and very wealthy lobby group and they don’t want to have additional regulations,” Ray said.

Even so, Ray intends to brief the commission on possible scenarios when it meets in regular session at 5:30 p.m. Monday in the Municipal Building, 2821 Washington Street.

Payday lenders and alternative financial services have been a hot button topic for city officials for several years.

Two months ago, the city council approved a change to the City of Greenville ordinance which regulates where “payday” loan businesses are allowed to open. The “Alternative Financial Services” (AFS) ordinance as it had been written was in violation of state law, as it prevented a payday loan company or similar business from opening in the same location where another AFS operation had closed.

The Alternative Financial Services ordinance was approved by the city three years ago, in an effort to help reduce the clustering of the businesses in a given area.

The change had been recommended by the Planning and Zoning Commission, which asked Ray to look into what, if anything, else needed to be done.

Ray referred to a portion of the Texas Municipal League (TML) web site, which details efforts by the state’s cities at regulating payday lenders and similar businesses.

As the state legislature has not imposed any significant limits, the TML is reporting many Texas cities have tried establishing own regulation at capping the fees the businesses can charge, limiting the number of times a loan can be rolled over or other measures.

Several larger cities; including Austin, Dallas, Denton, El Paso and San Antonio, have attempted to establish their own regulations on the businesses.

“And they all have been sued,” Ray said.

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