October 12, 2016

Texas Appleseed, a public-interest justice center, put together a publication titled “A Toolkit for Cities,” which is designed to help Texas cities increase access to fair, low-cost loans for their employees and the constituents they serve. The full publication can be accessed here. More information is available at Texas Appleseed’s website.

September 28, 2016

The Texas Municipal League signed on to the comment letter (PDF) of Texas Fair Lending Alliance to the Consumer Financial Protection Bureau (CFPB). The Fair Lending Alliance is a coalition of religious, charitable, and civic groups that seek to end the cycle of debt cause by payday and auto title lending. The letter supports the CFPB proposed payday and auto title lending rules, and it seeks clarification that local ordinances are not preempted. Along with the comment letter, the Fair Lending Alliance also submitted supporting resolutions (PDF) and recent borrower stories (PDF).

September 13, 2016

The City of Dallas has prepared draft comments (PDF) to the federal Consumer Finance Protection Bureau proposed rules, discussed in the June 8, 2016 Update.

June 17, 2016

In December 2015, ACE Cash Express (ACE) filed a petition for review with the Supreme Court. The petition came after an appellate court’s dismissal of ACE’s attempt to invalidate the City of Denton’s payday lending ordinance. ACE initially filed a suit against the city in a civil court, arguing that the ordinance exceeded the city’s police power, violated due process, and exceeded the city’s constitutional authority. The trial court determined that it did not have jurisdiction over the lawsuit, and that the proper place to challenge a criminal ordinance is a criminal court, not a civil court. ACE appealed the trial court’s decision to the Fort Worth Court of Appeals, which also ruled in favor of the city and dismissed the case.

In its petition for review, ACE contended that its lawsuit fits within an exception to the general rule that a criminal ordinance should be challenged only in criminal court. Ace relied on a Texas Supreme Court decision from 1894 to do so. Further, because the city has not prosecuted ACE in municipal court, ACE argued that it has no other way to challenge the city ordinance than in civil court. In short, ACE argued that the appellate court erred because it distinguished ACE’s justification for a lawsuit from the facts in the 1894 decision, and that the Supreme Court should step in to clarify the impact of its previous decision.

On June 16, the Supreme Court denied ACE’s petition for review, which essentially ends the current lawsuit in favor of the city.

June 8, 2016

On June 2nd, the Consumer Finance Protection Bureau (CFPB) proposed a rule to crack down on payday and auto title lending practices across the country. Specifically, the proposal seeks to safeguard consumers from taking on debt they cannot afford by:

  • Requiring lenders to determine a consumer’s ability to pay before providing a loan
  • Limiting repeat-borrowing for certain short-term loans
  • Authorizing less-risky long-term lending options as a substitute for traditional payday and auto title loans
  • Requiring lenders to give consumers written notice before debiting their bank account for payment, and requiring consumer’s permission after two failed attempts to debit the consumer’s bank account

Comments on the proposed rule are due by September 14, 2016. More details on the CFPB’s proposed rule, including the text of the rule itself, can be found here. Additionally, this article from the Temple Daily Telegram provides a good overview of the regulatory landscape in Texas in light of the CFPB’s new rule proposal.