SAN ANTONIO (9/26/12)--A credit union in San Antonio is applauding the adoption of a city ordinance that limits payday loans and auto title loans.
The San Antonio City Council adopted the ordinance, which limits payday loans to 20% of the consumer's gross monthly income. It limits auto title loans to 3% of the consumer's gross annual income, or 70% of the vehicle's value, said the Texas Credit Union League (LoneStar Leaguer Sept. 25).
San Antonio joins two other Texas cities--Dallas and Austin--that have passed tighter restrictions on the loans, and that sets right with Ashley Harris, director of public relations at San Antonio-based Generations FCU.
"I couldn't be more pleased that our city council has taken this extra step to protect the most vulnerable members of our community," Harris told the league. "Predatory lenders, unfortunately, have a strong presence in our community. But I do think the council's action sends a valuable message to our community. It lets our citizens know that San Antonio is a community that cares about their financial well-being. And it sends a strong message to the payday lenders that times are changing."
Harris acknowledged that the ordinance likely will be tied up in litigation. She noted that credit unions, particularly credit unions participating in the REAL Solutions program, should seize every opportunity to get the message out there that credit unions--as not-for-profit financial cooperatives--exist to help the community. "We need to continue our efforts to educate consumers on why it's in their best interest to avoid these fringe financial service providers," Harris added.
REAL Solutions is a financial education program of the National Credit Union Foundation. For more information, use the link.