New restrictions on future payday lenders
The future of pay-day and title loans in El Paso could now look very different. City council approved new restrictions on where and how these businesses can open in the future.
Sparks flew during Tuesday’s meeting as the ordinance was discussed, along with the morality of payday and title loan businesses.
“When you prey on our citizens most vulnerable people,” District 5 rep. Michiel Noe said. “And that’s what this industry does.”
Council members exchanged stern words as the new restrictions on credit access businesses, so called title loan and payday lenders, were put before city council.
At the heart of the issue: where and how future payday lending stores could be built.
“We’re open for business,” District 2 rep. Larry Romero said. “But at the same time, we’re sitting here talking about ‘yeah, we’re open for business, but only if we like your type of business.'”
The new restrictions place a minimum one thousand foot distance between payday stores and restrict how close they can be to freeways and homes.
Most significantly, future payday lenders will have to be in stand-alone buildings and be the only business in that building, not co-located with pawn shops or check-cashing stores like many are currently.
Saul Frank, president of Benny’s Pawn Shops, said that will completely change his business model. He completely disagrees with some council members calling payday lenders predatory, and said that they were insulting to him and his customers.
“I’m disappointed that it went this way,” Frank said. “There’s two people on the council that voted for us, that really understand what we’re doing. And the rest of the council did not understand. But they should not have lambasted us the way they did.”
Frank argued he provides access to credit for people who don’t qualify at traditional banks.
The ordinance ultimately passed 6 to 2, with Reps. Robinson and Romero voting against. All existing payday lenders will not be affected by the ordinance, with only new stores subject to the new regulations.
