Brownsville could limit payday loan and car title loan businesses
POSTED: Monday, July 14, 2014 - 4:34pm
UPDATED: Tuesday, July 15, 2014 - 7:08am
BROWNSVILLE, TX (KVEO NEWSCENTER 23) — Payday and car title loans are a quick way to get cash now, however, that cash comes with consequences.
There are 67 payday and car title loan places in Cameron County. Borrowers pay on average $1,000 per month on a $4,000 car title loan. Last year, there were 420 cars repossessed by auto title lenders in Cameron County alone.
Traci Wickett, CEO United Way Southern Cameron County, "Over 10.6 million dollars are drained from our economy every single year by the payday loan and car title loan industry."
The United Way in Cameron County helps put money in citizens pockets by offering free income tax services. Last year, they saved citizens over 3 million dollars in Cameron County. This is money that they don't want to see wasted by getting loans that they can't pay back.
Wickett, "So when we started to examine what are the things that are stripping wealth from our community, it was very obvious, very quickly, that payday and car title loans were a huge source of wealth stripping."
Even with the success that all the other cities have had through the state of Texas, the city of Brownsville is trying to learn everything that they can before they push with this ordinance.
John Villareal, City Commissioner, "We're learning from other cities also. We are getting calls from their council members, their mayors saying this is what happened, we should have done this differently, or we shouldn't have done this. That's what we are learning from right now so we want to make sure we get it right."
The ordinance would establish caps on loans offered based on the borrowers income.
Brownsville would be the 19th community in Texas to adopt this ordinance. Commissioner Villareal says there will be an open workshop with the public and city members within the next two months.