Texas would limit what cash advance and car title lenders can charge you, and your city could keep stricter rules
What it does
HB 1114 would let credit services organizations work only in four forms: a single-payment or multiple-payment cash advance loan, and a single-payment or multiple-payment motor vehicle title loan. For a cash advance loan, all fees, principal, and interest together could not exceed 20 percent of the consumer's gross monthly income, and it could be refinanced no more than three times, with each payment paying down at least 25 percent of the original principal. A motor vehicle title loan could not exceed the smaller of 3 percent of the consumer's gross annual income or 70 percent of the vehicle's retail value, and the multiple-payment version could not be refinanced at all. Contracts would have to name the lender, the interest, and the fees charged, and required disclosures would have to be available in English and Spanish at every location where the business serves customers.
What it means for your community
The bill also says cities may write their own rules for credit access businesses, and when a city ordinance and the state law conflict, the stricter one controls, so your city could set tighter limits of its own. Lenders would have to accept cash, electronic transfers, cashier's checks, teller's checks, and money orders as payment, and each day of a continuing violation would count as a separate offense. If you have borrowed from a cash advance or title lender, the caps on fees and on refinancing would limit what you can owe and how often the loan can be rolled over.
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