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September 2, 2013

City changes payday loan ordinance

GREENVILLE — A change was recently made to a controversial City of Greenville ordinance which regulates where “payday” loan businesses are allowed to open.

City Attorney Daniel Ray recommended the Greenville City Council approve the change, because the “Alternative Financial Services” (AFS) ordinance as it had been written was in violation of state law.

The Council voted unanimously Aug. 27 to approve the change.

The Planning and Zoning Commission previously voted to recommend the Council strike the language which prevented a payday loan company or similar business from opening in the same location where another AFS operation closed from the ordinance.

“They did not suggest any other changes,” Ray told the council.

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.

Ray said the section in question was not recognized as valid under Texas law, but stressed other restrictions under the ordinance would remain in force. The removal of the illegal section will allow the legal transfer of Alternative Financial Service businesses from one owner to another.

Ray said Dallas, Fort Worth, Houston and Austin had passed similar ordinances — which like Greenville’s did previously — prevented an AFS business from being transferred between owners.

“And all four of those cities are currently facing lawsuits,” Ray said.

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