New Payday Loan Regulations in Texas How much regulation does the payday loan industry really need?

It is amazing how much attention an industry gets. The states can't handle it, s o now cities are enacting their own payday loan regulations. In the never endi ng world of payday loan (or low income loans) regulation, the fourth city in Tex as, El Paso, Texas on Tuesday approved an ordinance to regulate payday- and cartitle loan businesses. It doesn't matter if you live in El Paso or Texas, just k now that citywide attempts to regulate payday loans are coming to your city soon . What is in the regulation? Limiting payday loans to 20 percent of the borrower's gross monthly income. Limiting auto title loans to the lesser of 3 percent of the borrower's gross annual income or 70 percent of the vehicle's value. Limiting loans to no more than four installments or three rollovers or renew als (a rollover or renewal is defined as an extension of consumer credit made wi thin seven days of the previous extension of credit). Requiring the proceeds from each installment or renewal to reduce the loan p rincipal by 25 percent. Requiring that every contract be written in a language the borrower can unde rstand, or be read in its entirety to any borrower who cannot read. Requiring the lender to provide to the borrower a form created by the city, which mentions nonprofit agencies that provide financial education and agencies with cash assistance programs, and contains general information regarding extens ions of consumer credit. Why is a city taking on payday loan regulations? Because they feel that the sta te isn't doing enough and payday loan customers are getting taken advantage of, payday loan customers end up in a cycle of debt, and the business needs more reg ulation. There is no question that the payday loan industry needs regulation, but it alre ady exists in different acts: The Truth in Lending Act, the Fair Debt Collection Practices Act, the Gramm-Leach Billey Act, the Consumer Financial Protection Ac t, etc. State Regulation of the Payday Loan Industry is mostly a WASTE OF TIME! Instead of wasting time on city regulation, those legislators should spend their time and setting up funds to help the poor, using their energy working on job c reation, improving education for low income people, and overall providing resour ces and financial education. And, there are always alternatives to payday loans. In addition, why not set up a financial education mobile truck that goes around to low income areas and teaches people how to manage their money. Does a mortg age applicant need to go through all of this? No? Does a couple applying for a m arriage license need regulations? The fact is that consumers who are in desperate need of a payday loan are in dir e need of money and cannot get a loan from a bank, cannot tap a credit card, can not get a loan from a credit union, the states and cities aren't helping them. Why doesn't El Paso create its own short-term cash fund? Why doesn't the city o f El Paso understand the economic model of a payday lender. Are they willing to cover all defaults, losses, etc.?? Sure. That will happen. Conclusion

The people who need payday loans are ADULTS. Sometimes they got themselves into a dire situation, and sometimes a real emergency hits someone who is doing their best to live paycheck to paycheck. But, ADULTS should be responsible for their own actions. If they are desperate and need money, then they need alternatives t hat are just not available. So long as a lender discloses their terms, rates, e tc., then the ADULT has a decision to make. Keep regulating the payday lenders and they will disappear and then El Paso can take care of more homeless people.