Councilman Juan Chadis thinks short-term loan providers are preying on Lubbock’s many vulnerable residents, so he’s gearing up to introduce an ordinance directed at managing the industry in Lubbock.
Chadis is hoping Lubbock joins the almost 40 towns and cities throughout the declare that curently have a standardized ordinance to reduce steadily the “abusive and predatory financing methods” of short-term loan providers referred to as payday or automobile name loan providers. These loan providers typically provide little loans at greater rates of interest due for payment either regarding the debtor’s next payday or through repayable installments over a length of time.
The ordinance is modeled following a variation crafted by the Texas Municipal League and includes restrictions that restrict the total amount of payday and automobile name loans, and exactly how usually they may be refinanced.
“It is impacting my region, it really is impacting my constituents,” stated Chadis. “the thing that is last might like to do is close doors, however these are small laws which were imposed through the state. Why don’t we do the right thing; that’s just exactly what this is certainly all about.”
Chadis referred to 1 story he’d heard from the constituent where he took down a $2,000 loan and began making monthly obligations of $250 every month. After seven months the lender was called by him to ask exactly how much he owed, and had been told it had been nevertheless a lot more than $2,000.