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Calgary Council Cracks Down on City Payday Loan Operators

In the November 9th meeting of the Calgary City Council a report from the Calgary Planning Commission was presented on the subject of pawn shops and pay day loans in the Calgary area.

Of particular concern to the commission was the tendency for these businesses to coalesce

It reported that there were 82 payday lending […]

Financially troubled Metro seeks to borrow $220 million to cover loan

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Metro officials want permission to borrow $220?million to cover a loan coming due in October, as the transit agency continues struggling under restrictions imposed last year after a federal audit found numerous instances of financial mismanagement.

At a time when some Washington-area officials have become increasingly skeptical of the way the Washington Metropolitan Area Transit Authority handles its money, the agency’s chief financial officer plans to ask Metro’s board of directors on Thursday to allow him to seek the short-term loan.

Metro already is juggling several large, short-term loans, borrowed largely to make up for federal grant money that has been slow in arriving. The Federal Transit Administration, which completed the audit in March 2014, has been limiting Metro’s access to grant money until the agency fixes the problems described in the scathing financial report.

Tuesday, D.C. Council Chairman Phil Mendelson (D) called a meeting between Metro board leaders and D.C. Council members in his office to relay concerns about how the transit agency’s financial troubles are being handled. And Wednesday, council member Elissa Silverman (I-At Large) hammered Metro leaders at a public oversight hearing, accusing the board of failing to hold individuals accountable for its financial lapses or to provide a “clear picture” of the agency’s financial state.

“It’s an incredible lack of management for such an important public agency. Yet no one seems to be held accountable for it,” said Silverman, a member of the council’s finance and revenue committee. She also described Metro as an agency “lurching from crisis to crisis.”

A Metro rider is seen through orange construction mesh near an escalator that was being repaired at the L’Enfant Plaza station on Wednesday. (Evelyn Hockstein/For The Washington Post) Metro, which has faced renewed criticism since a deadly smoke incident in a subway tunnel near the L’Enfant Plaza station Jan. 12, is already trying to persuade governments in the District, Maryland and Virginia to commit to providing the cash it needs over the long term to pay for new, safer railcars, as well as other badly needed improvements. If Metro obtains the $220?million loan, it would still need an additional $208?million to cover loans due later this year. It could tap cash reserves, obtain other financing or persuade some of its lenders to extend credit terms. In documents prepared ahead of the Metro board’s meeting Thursday, Metro staff said that despite cash-flow improvements, “pressures remain on the amount and availability of cash in the near term.” Metro’s total short-term debt amounts to $502?million, money that Metro Board Chairman Mortimer Downey said has been used primarily for building projects and improvements. Last month, Wells Fargo renewed an existing $75?million Metro line of credit through March 2016. Metro spokesman Dan Stessel said Wednesday that the transit agency expected to pay off “a significant part” of the remaining debt and was likely to seek credit extensions similar to what it obtained from Wells Fargo on only “a fraction” of the credit. Stessel did not provide specific details of the plan. Metro board leaders have said that they are seeking broad funding solutions within the jurisdictions that subsidize its operations and that it does not plan to increase fares or cut services to cover its costs.A Metro Silver Line train makes it way to Washington, passing another Metro train on a lower rail. (Evelyn Hockstein/For The Washington Post) D.C. Council member Jack Evans (D-Ward 2), who represents the city on the Metro board, said during Wednesday’s hearing that despite his concerns about Metro’s management, the agency needs the cash to expand. “If Metro just stays as it is, it will not fulfill the needs of our region,” said Evans, who led the hearing as chairman of the council’s finance and revenue committee. “We need a larger Metro. We need a Metro that goes more places, that has more cars to carry people.” Silverman, despite her criticism of Metro’s finances, espoused the same sentiments about the transit system’s future growth. But local government officials say they need reassurance that Metro is implementing the FTA’s recommendations to improve the agency’s financial practices before they authorize more funding. Metro’s own audit of its finances for the fiscal year that ended June 30, 2014, is still underway and four months overdue. Acting General Manager Jack Requa told the council hearing Wednesday that the audit was on track for completion in April. “Until there is comfort that the financial management systems and processes are in order, the [chief financial officer] cannot recommend long-term borrowing or additional capital requests beyond safety needs for WMATA,” David Umansky, a spokesman for D.C. Chief Financial Officer Jeffrey S. DeWitt, said later in an e-mail. Umansky said that DeWitt was at Tuesday’s closed meeting between council members and Metro board members, and that “he expressed his continuing concerns about the lack of audited financial statements and the need for WMATA to extend its lines of credit coming due in the upcoming months.” Last March, a federal review painted a troubling picture of the transit agency, questioning Metro’s management of billions of dollars in federal grant money. The review by the Federal Transit Administration found that Metro awarded millions in no-bid contracts, skirted contracting rules and overcharged the government. The problems led FTA to shut down the automatic flow of cash to Metro, instead requiring the agency to manually draw down grant money and comply with grant application procedures. The restrictions are likely to continue through fiscal 2015, according to Metro. Metro Board Chairman Mortimer Downey said Wednesday that even he had been surprised when he read the FTA report. “I take accountability for not knowing it was not done right,” Downey said in response to questions from Silverman. At the behest of members of Congress, the Government Accountability Office has begun its own audit of Metro. Silverman said in an interview after the hearing that Wednesday marked the first time she had heard “a sense of remorse or responsibility” when Downey spoke. But Metro board leaders during the hearing also painted a more positive picture of the agency’s financial recovery.

Requa said the transit agency was “performing to budget with almost $300?million cash on hand, with the ability to make timely payments” to employees and contractors.

Requa described the agency’s success in securing the $75?million credit extension from Wells Fargo. “Financial institutions have confidence in WMATA’s financial capacity,” he said.

Lori Aratani and Robert McCartney contributed to this report.

Abigail Hauslohner covers transportation and development for The Washington Post. Previously, she served as the Post’s Cairo bureau chief.

Paul Duggan covers the Metro system and transportation issues for The Washington Post.

[…]

Council chief hits back in £4m Old Trafford hotel loan row

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The leader of Trafford council has fought back after criticism over a potential £4m loan to Lancashire County Cricket Club for a new hotel.

The club announced that following a £5m cash injection, the plan for the four-star 150 bedroom hotel, replacing the current one at the Emirates Old Trafford, had moved a step closer.

Bosses say the £12m project will create £1m-worth of employment a year and bring in an extra £2.3m.

Greater Manchester’s combined authority has agreed to provide the £5m loan.

But the plan hinges on another loan, for £4m, from Trafford town hall. The club has already secured the remaining £3m.

Council bosses say the loan will be secured by the town hall at a preferential rate, before the cash is passed on to the cricket club.

It will be paid back, along with the combined authority loan, with interest, by 2021.

A decision will be made by the council at the end of the month.

Opposition Labour leader Andrew Western has expressed ‘concern’ over the arrangement, arguing that the council should not be taking out loans for private businesses in times of austerity.

In 2013, the council gave the club financial backing of £21m for a regeneration project by selling land to supermarket giant Tesco.

Trafford council leader Sean Anstee

Tesco bosses, struggling to secure planning permission for an extension of their Stretford store, offered to buy an unused plot at a nearby high school for £20m more than its worth – if the cash was ring-fenced for the cricket club.

The land-deal was met with fury by Labour councillors.

Coun Western said: “Once again, the council finds itself in the position of being asked to provide financial support to Lancashire County Cricket Club just a few years after gifting some £21m to the club to furnish its recent redevelopment.

“Although I appreciate that on this occasion, we would be talking about a loan rather than a gift, it does concern me that a private business should need to come to the council once more for assistance.

“If this proposal is as sound as is being suggested, the club would be able to source a bank loan for the amount required independently.

“I do not believe the council should be expected to help them out to the tune of millions of pounds yet again at a time of continued austerity.

“I would much rather see investment in the local economy used to support small and medium-sized enterprises who are struggling to access lending in what continues to be a difficult financial climate.”

The council has to cut £21.5m from the books this year.

Leader Sean Anstee said the project will create nearly 80 jobs and bring in an extra £2.3m a year for the borough.

He highlighted that the town hall will make money thanks to interest on the loan, and that council borrowing cannot be used to mitigate service cuts.

Coun Anstee, who also highlighted that the plan is backed by Labour leaders across the region, added: “The choice isn’t whether we want to borrow to fund services.

“It’s whether we use prudential borrowing to support and boost growth. We can continue in austerity and do nothing; or we can choose to lend this money, create jobs and bring an extra £2.3m in. This will cost the taxpayer nothing.”

Lib Dem leader Ray Bowker described the deal as a ‘win-win-win’.

[…]

SNP accused of U-turn on Edinburgh Trams cash

FORMER Scottish Labour leader Iain Gray has accused the SNP of a U-turn on the controversial Edinburgh Trams project by offering funding “through the back door”.

The accusation comes as Edinburgh city council looks set to extend the much-maligned £1 billion tram line down to Leith using money from the St James Centre redevelopment – a project which is going ahead by way of a £61 million Scottish Government loan to the developer, Henderson Real Estate.

Last week, Edinburgh council announced a business case to extend trams to Leith, estimated to cost £80m. Proposed funding for the line is expected to come from the St James Centre developer.

The SNP has repeatedly made a “not a penny more” pledge in terms of future tram extensions in Edinburgh, including senior SNP figures such as Keith Brown.

But yesterday, Scottish Labour finance spokesman Iain Gray said the SNP was going back on its word.

He said: “The SNP inherited the trams project in good order in 2007, abandoned it, then had to get involved again.

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“This is another U-turn by the SNP. Having said they wouldn’t invest any more in Edinburgh’s tram system they’re now investing a further £61m but instead of just being open about it they are going through the back door.

“Whatever way they want to say it, this is money being invested in the tram system by the SNP.”

First Minister Nicola Sturgeon announced the “innovative funding model” for the St James Centre redevelopment back in April, with Holyrood providing a loan based on estimated future income from business rates.

The £61m loan is to be repaid by Henderson from higher rates paid by retailers in the new shopping complex in what is now known as a Regeneration Accelerator Model, a loan based on future rates payments. This model used to be known as Tax Incremental Finance, which was used to fund the creation of Glasgow’s Buchanan Street Galleries.

Responding to Mr Gray’s accusation that the loan amounted to back-door funding, a Scottish Government spokesman said yesterday: “Mr Gray is mistaken. Any plan for extending the current Edinburgh tram line is a matter for City of Edinburgh Council to consider in light of its own funding priorities. We do not intend to make any further contribution, having already paid £500m after parliament voted in favour of the project.

“Our separate grant for the redevelopment of the St James Quarter – which will support around 2,300 permanent jobs and add £25m to the Scottish economy each year – will not be used to fund trams.”

Edinburgh West SNP MSP Colin Keir accused Mr Gray of “hypocrisy”, saying: “Unlike Mr Gray, the SNP opposed this project at the start, and Edinburgh has paid a heavy price for the decision Mr Gray and his Labour chums, in alliance with the Tories, helped force through in 2007. For Mr Gray to now try to blame others for Labour’s mistakes is frankly pathetic.”

The new £850m St James Quarter is due to launch in 2019 and Leith, as one of the most densely populated city suburbs, is seen as a huge potential market for the shopping complex.

A business case for the line extension is to be submitted to the council in the spring, when councillors will make a final decision on whether to proceed.

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[…]

New loan program hopes to spruce up downtown buildings

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The city is hoping downtown property owners take advantage of a loan program to update the look of their buildings.

— image credit: Brian Beckley, Renton Reporter

Property owners downtown will have an opportunity to take advantage of a federal loan program next year, thanks to a change in how the City of Renton plans to use its Community Development Block Grant Funds.

The grants will be used as part of the city’s new Downtown Commercial Rehabilitation and Facade Improvement Loan Program to help private land owners improve their properties in hopes of bringing more retail businesses to the downtown core.

“We hope that this will be one of the tools that generate some interest downtown and will ultimately lead to new commerce,” said Community Development Block Grant Manager John Collum.

According to Collum, one of the issues the city is facing in trying to re-energize the downtown shopping district is the age and the look of the buildings. While Collum was quick to point out that there is not a whole lot of vacant space

downtown, the space that is available is “not attracting the pure retail” the city would hope because, he said, the spaces are just not what retailers are looking for.

The hope is that property owners will take advantage of the loan program to refresh the looks of their buildings, potentially as part of a larger project.

Collum said the loans feature “very favorable terms” and are designed to be used on any project that will affect the building’s facade, from painting and windows to signage, awnings and more.

“Anything that will be part of a project to improve the appearance of the building,” he said.

The loans can cover 50 percent of the total cost of the project, with a minimum loan amount of $10,000 (for a minimum project amount of $20,000). The loans are 0 percent interest loans. If the project is part of a larger rehabilitation, which is the hope, the loan money must be used for facade improvement.

Using CDBG money for a facade Improvement program is something new for the city. Prior to the upcoming budget cycle, CDBG money was used in human services, primarily in housing assistance.

The city has compensated for the removal of the CDBG money by increasing the city’s general fund contribution to human services so there is no gap in the housing assistance programs.

“This is just a matter of moving money from one pot to another,” Council President Don Persson said during a recent council discussion on the topic, adding that the change was a “win-win situation” since the money going to human services was not being cut.

Collum said a handful of owners and several tenants have already expressed interest in the program.

Collum said the city has $245,000 available through the program in 2015.

[…]

Morgan Hill to regulate payday lending

Following the lead of surrounding cities, the Morgan Hill City Council voted to prohibit new payday lending establishments in the city limits.

The unanimous vote at the Oct. 1 council meeting directed city staff to draft an ordinance prohibiting new establishments that offer the short-term cash loan services. The ordinance will also prohibit the two existing payday lenders in Morgan Hill—Advance America and Check Into Cash—from expanding or relocating within the city limits.

Payday loans, also known as cash advances or deferred deposits, offer borrowers small cash loans of up to $300 for a period no longer than 30 days, according to a city staff report. The lenders charge fees that amount to an annual percentage rate of 460 percent for a two-week loan.

While financial and social advocates have called the payday lending industry a scourge which preys on low-income residents, proponents of the service say it’s better than forcing consumers to resort to costlier or even illegal sources of emergency funds.

At the Oct. 1 council meeting, which included a public hearing on the payday lending staff report, Advance America Government Affairs Director Sophia Garcia noted that payday loans are just one of a variety of finance options offering consumers a choice.

“Among other credit options, a payday loan may be the best choice when consumers consider the often higher costs of bouncing a check, paying overdraft fees or incurring late payment penalties,” Garcia said. If licensed storefront payday lending services are regulated in Morgan Hill, residents may turn to illegal, unregulated online lenders where they have no protection if a deal goes bad, she continued.

The action taken by the council Oct. 1 does not affect the two existing payday lenders in town unless they want to expand or move.

“We have two (payday lenders), we don’t need anymore,” Mayor Steve Tate said.

City officials have heard no specific complaints about these two businesses, but the council asked staff to look into local options for regulating payday lending as nearby cities have in recent months.

In January, the Gilroy City Council took such an action by amending its zoning ordinance to prohibit any business that offers payday lending. There are currently six payday loan establishments in Gilroy, and Mayor Don Gage said all of them are located on the east side of town where the city’s “most vulnerable populations” live.

“They were taking advantage of a vulnerable population by loaning them money at very high interest rates—often 10 times as high as if you borrowed from any other agency,” Gage said.

Gage added that borrowers who use the services often get caught in a cycle where they have to continue borrowing at exorbitant rates to pay off their previous loans.

Morgan Hill resident Brad Ledwith, who owns a local financial services firm, said the payday loan industry is equivalent to “loan sharking.” While he acknowledged the services can be useful as a rare source of emergency funds for desperate consumers, they should be considered a last resort for anyone in need of financial relief.

“They make so much interest off so little money,” Ledwith said. “It is the pond scum of the financial world.”

When asked for a comment, managers at the two businesses in town that offer payday loans—Cash to Credit and Advance America—referred the Times to media relations offices outside Morgan Hill.

Both businesses prominently display a schedule of fees and rates for different sized loans on their walls. The notice also includes a list of disclaimers and advisories, including that customers should not rely on payday loans as a long-term financial solution. The notices specify that any sized payday loan is subject to the equivalent of a 460 percent APR for 14 days, or 214 percent APR for 30 days.

The companies’ media relations offices did not return phone calls requesting comment.

The notices on the businesses’ walls are a requirement of the California Financial Code that regulates and sets licensing requirements for payday lending services, according to Morgan Hill Senior Planner John Baty.

The cities of San Jose and Sunnyvale have recently limited the total number of licensed payday lenders allowed in their cities, according to a city staff report. And Santa Clara County as well as the city of Los Altos have recently adopted zoning code changes that prohibit payday lending by definition, as Gilroy has.

[…]

Payday Loan Issue Being Resurrected – LaPolitics

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After failing to pass reform legislation aimed at the payday loan industry last year, Sen. Ben Nevers, D-Bogalusa, said he is considering bringing a bill again but is still on the fence.

“I haven’t decided yet,” he said. “There’s an audit advisory meeting I want to attend in October that should give me a better idea. I’ve been told there are strides being made in monitoring the industry. I’m trying to listen to all sides right now and figure out what is best.”

Nevers doesn’t sound eager to repeat the huge lobbying battle that was waged during the spring session. Yet he is still interested in learning more about the issues of repeat lenders, meaning those consumers who repeatedly take out payday loans, and what reporting requirements look like.

Right now, local-level governments, like the Baton Rouge Metropolitan Council, are taking turns looking into the industry, but there’s no telling where that might all end up.

Meanwhile, the industry has formed a new trade group, the Louisiana Payday Loan Association. Lobbyist Danny Ford, a spokesman for the association, said members will be meeting soon to discuss a 2015 legislative agenda and to address potential regulations that may be handed down by the federal government.

“But it’s too early to tell what kind of strategy we might have for next year,” he said.

Ford pointed out that the industry supported HB 766 by Rep. Erich Ponti, R-Baton Rouge, during the most recent session to give the state the ability to regulate online lending; establish debt consolidation and extended payment plans; and to abolish delinquency fees.

This story first appeared in Issue 996 of LaPolitics Weekly on Sept. 18, 2014. Wish you would have read it then? Subscribe now!

Photo Credit: Seth Anderson

[…]

Opponents keeping up pressure on payday lenders in Texas

Over a dozen payday and auto-title loan stores line a small stretch of South Buckner Boulevard.

With brightly colored storefronts and signs in English and Spanish, they advertise “Cash now!” and “Cash today!” There’s at least one on every block for several miles.

Despite this busy strip, the numbers of these types of stores in Dallas are on the decline.

Since the city passed a landmark ordinance regulating lenders three years ago, dozens of shops have closed. It’s just one way, city officials and consumer advocates said, that the ordinance has affected an industry that they say preys on low-income residents and traps them in a cycle of debt. Yet while they said most lenders are making efforts to comply, some companies have found ways to skirt the restrictions.

Now, the ordinance’s supporters are gearing up for the 2015 Texas legislative session, anticipating pushback from payday lending companies. Dallas City Council member Jerry Allen, who was a major force in passing the ordinance and continues to encourage other cities to join, said he expects companies will lobby for a weak law that would pre-empt local ordinances.

“My goal would be to not go backwards,” he said. “They’ve given up at the local level. They’re going to put a full-court press at the state.”

As the start of the session approaches, Allen said ordinance supporters will work to get more cities to pass ordinances and rally state legislators. At least 18 cities have passed ordinances similar to the one in Dallas.

The industry’s political clout stifled past efforts to create statewide reform.

Rob Norcross, spokesman for the Consumer Service Alliance of Texas, which represents many of the state’s short-term lenders, said city ordinances often leave customers paying more at one time or having to take out multiple loans.

“Some of these customers are in financial situations that don’t fit the narrow parameters of the ordinance,” he said.

But some change may be coming. The Consumer Financial Protection Bureau, the federal consumer watchdog, is developing rules to regulate the industry. In July, it fined Irving-based ACE Cash Express $10 million for what it described as predatory practices. It also took actions against Fort Worth-based Cash America last November.

Such changes could only help the city regulations, ordinance supporters said.

State and federal laws “are stronger because they come across the board. It doesn’t undermine the benefit of what the cities are doing. It would just make it that much better,” said Ann Baddour, senior policy analyst for Texas Appleseed, an advocate for poor residents.

Some bans

For Sandra Johnson of Irving, a recent payday loan started with a high electricity bill.

Johnson, a receptionist, said money can be tight after rent, bills and food. An unexpected higher bill took her budget over the edge.

She was already paying off other loans. A car-title loan helped her daughter who was out of work. Another payday loan helped when she had surgery.

The loans are easy to get, she said. Paying the high interest, however, was a struggle.

“I understand that when I get a loan, I have to pay it back,” she said. “But when it’s gotten to the point where you have to pay it back or you don’t eat, it makes it hard.”

Marketed as a quick fix to help cover expenses until a person’s next paycheck, the loans often come with costly fees and high interest rates that make it difficult to pay them off.

Consequently, 14 states and Washington, D.C., have banned payday loan stores. But efforts in Texas to rein in the industry have largely failed.

In the past decade, payday and car-title loan companies have used a loophole in state law that allows them to operate without interest rate limits. As a result, a payday loan for $300 may end up costing about $701 — the highest rate in the country, according to an analysis by Pew Charitable Trusts.

In 2011, religious and community groups advocated for state legislation that would limit some of these practices. Ultimately, they were only able to require businesses to be licensed with the state, submit loan data and provide detailed cost disclosures.

The Dallas City Council was already discussing its own ways to regulate the industry. In May 2011, it passed an ordinance that limited where payday loan and car-title companies could open. That June, it passed another ordinance that placed restrictions on actual loans.

Interest limits were out of the city’s power. But the ordinance restricted the amount a person could take out based on income or a car’s value. It also limited renewals and required minimum payments toward the principal.

Dallas sued

Within weeks, the Consumer Service Alliance of Texas and several lenders sued Dallas, arguing that the ordinance conflicted with state law and was intended to put lenders out of business. In May, the Texas 5th District Court of Appeals ruled in the city’s favor and said Dallas is immune from a lawsuit filed by payday lenders.

By then, other cities had joined Dallas. Through efforts by Allen and religious and community groups, many of the state’s largest cities — including Austin, Houston, San Antonio and El Paso — passed similar ordinances.

In North Texas, Denton, Flower Mound and Garland enacted ordinances, while several other cities implemented zoning ordinances.

Limitations

The state doesn’t release specific loan data by cities. But a comparison of licensed stores in Dallas from April 2012, shortly after 2011 state and city regulations went into effect, and July 2014 shows that about a quarter of stores have closed.

The state’s Office of Consumer Credit Commissioner, which oversees the companies, only maintains a current list of store licenses. Texas Appleseed, which regularly requests the data, provided the 2012 list.

In 2012, Dallas had 241 payday and car title loan stores — collectively called Credit Access Businesses in Texas. As of Sept. 18, there were 177 — about a 27 percent decline.

Many of the companies doing business in Dallas closed stores during that time.

In its 2013 annual report, Cash America International said that it closed 36 stores in Texas primarily because city ordinances had reduced the profitability and volume of short-term loans. The company closed three stores in Dallas.

EZCORP also said in its most recent quarterly report that it closed stores as a result of city ordinances.

Multiple calls to companies operating in Dallas were not returned.

But Norcross, the industry representative, said his group projects 46 more stores will close in Dallas by the end of 2014. The ordinance, he said, doesn’t leave companies with much flexibility. With loans limited to four payments, each payment often ends up being too large for customers, he said. It also doesn’t address the differences that come with each loan type.

“It’s a one-size-fits-all approach that is incomplete,” he said.

The time for the group to challenge the Dallas appeals ruling has run out. The group or a lender may be able to refile the lawsuit if a lender gets fined under the ordinance, Norcross said.

Business inspections

Companies have found ways around the ordinance, consumer advocates said.

The Anti-Poverty Coalition of Greater Dallas has been sending volunteers to stores to see if they are complying with the regulations.

Last October, Becca Fritze, senior program manager of financial empowerment at the YWCA, went to a store and asked what would happen if she couldn’t pay off the loan within four payments. After her colleagues asked the same question, lenders directed them online.

“For me, it was that they said, ‘Oh, don’t worry. We’ll just refer you to a store outside of Dallas,’” she said.

Norcross said that such interactions might come from a desire not to lose customers. “If a customer says, ‘Look, I’ve got a problem here. What am I going to do?’ they’re going to try to help them out,” he said.

Baddour, of Texas Appleseed, said some companies also have offered what they describe as single-payment loans that end up having multiple fees.

More enforcement, she said, will help close such potential loopholes.

Dallas began inspecting businesses in May 2013. Since then, it has inspected 87 locations, conducted six examinations and issued 34 notices of violation, said assistant city attorney Maureen Milligan. One lender received four criminal citations.

The most common violations have been that lenders didn’t have proper documentation for an applicant’s income or car value, she said.

Most of the companies, however, have been willing to comply, she said.

Online loans

Statewide, lenders have found areas to grow. While Dallas has fewer stores, the numbers across Texas have stayed around 3,300. In North Texas, some cities without ordinances have more stores than in 2012.

Although the number of new loans and refinances dropped last year, the industry had more consumers, according to the Center for Public Policy Priorities’ analysis of industry filings with the state. The fees charged to customers also increased by 12 percent. The Austin-based center is a nonpartisan nonprofit that pushes for public policies to help low- and moderate-income Texans.

Online loans also seem to be growing. Many lenders offer loans through their websites. Consumer advocates describe that as a way to avoid regulation.

As of now, the Dallas ordinance’s application to online loans is only hypothetical, said first assistant city attorney Chris Bowers. The city attorney’s office hasn’t received any borrower complaints about online loans or had a lender try to argue that one was issued outside of city limits because a portion of it was online, he said.

“It will depend on the facts,” he said. “But the mere fact that they’re touching a computer does not insulate them from the ordinance.”

Ultimately, a statewide law is needed, consumer advocates said.

“Having something comprehensive at the state level would potentially prevent operators from setting up shops just outside the jurisdictions of some of these ordinances,” said Oliver Bernstein, spokesman for the Center for Public Policy Priorities.

Yet laws can only go so far without alternative financial solutions, Fritze of the YWCA said.

“You can kind of put those laws in place, but you still need an alternative product. There aren’t a lot of products out there,” she said.

Financial counseling

Some alternatives are in the pipeline. BCL of Texas, for example, is working to bring the Community Loan Center program, a pilot program in Brownsville, to Dallas and Austin by next year. The program would allow employers to provide loans to their employees at an interest rate capped at 18 percent.

Meanwhile, Fritze meets regularly with Johnson for financial counseling sessions. After she pays off her current loans, Johnson said, she won’t take out any more.

The sessions, Johnson said, “have really taught me these life goals about what it takes to make it.”

Overall, the ordinances have raised awareness about the issue and about financial education, supporters said.

Allen said the ordinance also helps encourage economic development.

“If I was corporate America, I would read that as a positive thing that Dallas is doing,” he said. “That’s the image that you want to have.”

[…]

$2m stadium loan will 'buy the council time'

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$2m stadium loan will ‘buy the council time’

LOIS CAIRNS

Last updated 12:53 25/09/2014

Joseph Johnson/Fairfax NZ

BREAKING EVEN: Without a $2m loan, the AMI Stadium maybe forced to close – potentially leaving Christchurch without a stadium for professional sport.

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How long the temporary rugby stadium at Addington remains in play rests on the outcome of negotiations between the Government and the city council, says Christchurch Stadium Trust chairman Jim Anderton.

Anderton fronted up to the Christchurch City Council this morning to plead for a $2 million loan.

The cash is needed so the trust, which administers the stadium, can buy rather than lease the stadium’s tiered seating.

Buying the seating will save the trust around $700,000 a year, money it can then use to upgrade and improve the stadium so it can remain in use beyond 2017.

Without the loan the stadium maybe forced to close – potentially leaving Christchurch without a stadium for professional sport – as it is only breaking even and there is no spare cash to pay for work needed to extend the life of the stadium.

“You have to decide whether you want a stadium there after 2017 and if you do, then some assistance is going to be required,” Anderton told councillors.

It was planned that Christchurch would have a new permanent stadium by 2017, as outlined in the central city recovery blueprint, but the scheduled date for completion has now been pushed out to 2019.

That date may be delayed further due to financial challenges facing the council, but that will depend on the outcome of negotiations between the council and the Government.

The Christchurch Stadium Trust is working on the premise the stadium may be needed until 2022.

In a hint that it may be required even beyond that date, Mayor Lianne Dalziel asked Anderton whether the trust would be in a position to repay the council’s loan in December 2022 even if the temporary stadium was still being used.

“Yes, we believe we can do that,” Anderton assured her.

Under the terms of the loan approved by the council, the trust will pay back a minimum of 60 per cent of the $2m borrowed ($1.2m) by December 2022. How much of the remaining balance the trust will pay back will depend on the value of the assets it holds at the time it is wound up.

Council chief financial officer Peter Gudsell said by giving the trust a loan the council was ensuring it had options when it came to negotiating the timing for the new stadium.

“This gives us options,” Gudsell said.

Deputy mayor Vicki Buck said it was “absolutely logical and sensible” to loan the money to the trust, while Cr Yani Johanson said it would buy the council time.

“The sooner we do this, the greater leverage we can have around the timing of the major new stadium,” said Johanson, adding he believed the council should be pushing the delivery of the new stadium out until 2025.

Cr David East said any suggestion that the temporary stadium would be needed beyond 2022 was not appropriate at this time.

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Cleveland Heights lifts payday loan moratorium, pushes state to keep interest rates low

CLEVELAND HEIGHTS, Ohio –- The city council on Tuesday plans to vote to lift a moratorium of more than a year on new businesses that issue payday loans without a license under the state’s Short-Term Loan Act, which caps interest limits at 28 percent.

City Manager Tanisha Briley said the city is forced to lift the moratorium after the Ohio Supreme Court in June ruled companies could issue payday loans using a mortgage lending license, under which they can charge triple-digit interest rates — an average of 367 to 390 percent, according to the city.

Council on Tuesday also will vote on a resolution requesting the state legislature to require all payday lenders to operate under the Short-Term Loan Act.

“In 2008, the lenders went to the voters and tried to get that Short-Term Loan Act repealed and the voters told them no. They thought the limit should be set at 28 percent,” Mayor Dennis Wilcox said.

Payday loans are short-term loans usually due on the borrower’s next payday. Council declared the moratorium in June 2013 while the Ohio Supreme Court weighed whether a payday loan company was fraudulently operating using a mortgage lending license in the Neighborhood Finance vs. Scott case.

In 2008, Rodney Scott took out a $500 loan from a Cashland store in Elyria. When he didn’t repay the loan within two weeks, Cashland sued him. Fees and interest on the loan totaled an annual percentage rate of 245 percent.

But Ohio Neighborhood Finance wasn’t doing business under that law. Like many other payday loan businesses, Ohio Neighborhood Finance registered under the Mortgage Lending Act.

“Payday lenders are predatory by nature. They prey on those of us that have less. They prey on those of us that can least afford to be taken advantage of,” councilman Jason Stein said when the city enacted the moratorium last year. “Payday lenders are not welcome in Cleveland Heights.”

Stein could not be reached for comment Tuesday.

At least two short-term loan companies operate in Cleveland Heights — Check Into Cash on South Taylor Road and Loan Max on Cedar Road –- neither of which offers payday loans, employees said Tuesday afternoon. Both offer title loans, charging as much as 24.9 percent interest. Check Into Cash also offers installment loans with up to 8.5 percent interest.

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