Payday loan debate rages on at Abilene City Council

The debate over payday loans picked up Tuesday where it left off at the last Abilene City Council meeting.

Proponents and opponents of a proposed ordinance addressed the council during a workshop meeting Tuesday at City Hall. It was a hot topic of discussion at the April 20 council meeting.

A final public hearing and a vote is scheduled to take place at the council's regular meeting at 8:30 a.m. Thursday.

The proposed ordinance would place limits on the amount of payday loans and add other restrictions on payday lenders. At least 40 other Texas cities have adopted ordinances based on a model from the Texas Municipal League.

Many people in the audience Tuesday wore T-shirts saying "Stop the ordinance." Most of the people who spoke during the public comment portion of the meeting, however, were in favor of the ordinance.

Kimberly Knight, chief financial officer at Tige Boats, said some Abilenians suffer because of payday loans taken out during tough financial times. These people are employed and aren't poor, but they need assistance without the risks that come with payday loans.

"I've seen many of our employees hurt by payday loans, title loans they will borrow," Knight said. "These are not really, really poor people. These are people who get caught without assistance, so they fall between the cracks."

Sometimes, they end up owing $2,000 for a $300 loan, she said.

"These guys are not going on vacation with the money. It's just a need. They don't qualify for financial assistance," she said. "If they can't qualify for a bank or something, they need places to get a loan, but they need some regulations so that they can actually pay it back and keep their credit."

Both Michael Brown, owner of Star of Texas Financial Solutions and president of the Texas Organization of Financial Service Centers, a trade organization for credit access businesses, and his partner Robert Wheeler said the ordinance would not affect fees people have been complaining about, just the length of time of repayment.

"This ordinance would do nothing to regulate the fees charged and shortens the amount of time to pay back the loan," Wheeler said, adding that shortening the pay periods increases the payments due.

Jen Rogers, a caseworker with the International Rescue Committee, said payday lenders need more regulation and there needs to be more education about borrowing money.

Stormy Higgins said this was not an issue on which the city should wait for state or federal guidance.