Fort Worth Mayor Pro Tem and District 2 Council member Sal Espino
It has been encouraging to see cities across Texas step up to the challenge and enact legislation to make it tougher for payday lenders to charge outrageous rates to distressed borrowers who then are caught in a cycle of debt they can’t repay.
Unfortunately, in North Texas, Irving, Fort Worth and Arlington haven’t exactly been leaders in this regard. I would like them to pass city laws based on Dallas’ landmark ordinances that have stopped the proliferation of payday lenders. They have not.
Still, I recently had an interesting e-mail exchange with Fort Worth Mayor Pro Tem and District 2 Councilmember Sal Espino, who I’d heard through the grapevine might be willing to step up. If I take him at his word, he sounds like he would take up the cause in Fort Worth. Based on this answer, I hope he would.
“Since the Texas legislature has not acted in a strong manner to protect consumers, I favor the City of Fort Worth following the lead of other cities which have enacted business regulations over payday lenders: limiting the size of the loan to a percentage of the borrower’s income, limiting the number of times a loan can be rolled over, and applying for and receiving a certificate of registration.”
That’s progress, if Fort Worth would only do it. So I asked him why Fort Worth has been reluctant to take a strong stand against payday lending since Houston, Austin, El Paso, Dallas and other cities have taken tougher stands. He said the council is waiting for a statewide or federal solution and is reluctant to engage in business regulation. He hinted that if the Texas Legislature does not act proactively on this issue during this legislative session, momentum may build in Fort Worth to enact a payday lending ordinance.
Why not add to the momentum already underway in more than 20 Texas cities instead of waiting to see what someone else will do? Dallas’ proactive approach is the reason other cities have demonstrated the fortitude to take on the payday lending industry.
Having Fort Worth on board would sent a clear message to payday lenders and the state legislators that predatory lending must end. Espino seems on the right side of this issue, and as a veteran city council member and Mayor Pro Tem, he should use the clout that comes with tenure.
He said there should be another less costly product available to consumers who are cash-strapped or are high risk borrowers than payday loans and “reasonable regulation is needed to prevent predatory lending at interest rates that shock our conscience.” He also seems to understand the neighborhood quality of life implications, acknowledging that ”there is an overconcentration of these businesses in the central city and it hurts proper development to a better and higher land use.”
If Austin lawmakers are going to take up the payday lending issue, cities had better be prepared and united so lawmakers don’t undercut the will of local city councils. Unlike the lawmakers, cities live with the consequences of predatory payday loans on a daily basis. And yes there are alternatives to bad faith payday lenders as I outlined in this recent editorial.
Step one is make sure payday lenders don’t exploit communities with easy money that later becomes an anchor around the borrower’s neck. And that’s why Fort Worth, Irving and Arlington need to join other cities in this effort and do it now.