Program update March 16, 2012 - Payday Lending Ordinance; Austin RISE Week

Understanding the CREDIT ACCESS BUSINESS ORDINANCE (Ordinance against predatory lending practices) and How to File a Complaint

As of January 1, 2012, the Credit Access Business Ordinance is in effect to protect consumers from certain predatory lending practices. Credit access businesses typically offer payday and auto title loans. 

The entire ordinance can be read here: http://www.ci.austin.tx.us/edims/document.cfm?id=157368

Sections of the ordinance that would most affect our clients would be:

-      A credit access business cannot offer a payday loan that exceeds 20% of the consumer’s gross monthly income.

-      For motor vehicle title loans, the loan may not exceed the lesser of:

o   (1) three percent (3%) of the consumer's gross annual income; or

o   (2) seventy percent (70%) of the retail value of the motor vehicle.

-      There are now restrictions on the number of times a client can renew/extend their loan:

o   All loan payment extensions may not be payable in more than four installments. Proceeds from each installment must be used to repay at least 25% of the principal amount of the extension of the loan. An extension of consumer credit that provides for repayment in installments may not be refinanced or renewed.

o   Lump sump payments of consumer credit may not be refinanced or renewed more than 3 times. The minimum payment due to refinance or renew an extension of consumer credit must reduce by at least 25% of the principal amount of the extension of consumer credit so that the extension of credit is paid in full after a maximum of three renewals or refinances.

o   An extension of consumer credit that is made to a consumer within seven business days after a previous extension of consumer credit has been paid by the consumer will constitute a refinancing or renewal.

-      If a client requests an extension of consumer credit, the credit access business (lender) must provide a referral list with consumer credit counseling services available through non-profit agencies.

If your client or someone you know has a payday or auto title loan and you feel that a credit access business has violated this ordinance, please file a complaint.

TO FILE A COMPLAINT:
Please contact the city by phone, email or in writing at:
City of Austin
Telecommunications & Regulatory Affairs - Credit Access Business Program
P.O. Box 1088
Austin, Texas 78767
Telephone: 512-974-2999
Email:  tarainfo@austintexas.gov

Austin RISE Week 2012: March 26-30, 2012

RISE Week offers entrepreneurs a combination of interactive learning sessions, inspiring keynotes, unique competitions, funding opportunities and celebratory networking events. The online platform makes it easy to navigate the choices and manage your busy schedule.

There are TONS of amazing opportunities for small business owners, self-employed, and non-profits (social entrepreneurs) and all FREE**!!!

**You will be asked to provide credit card information for any event you RSVP for, but it will only be charged if you no-show or cancel within 24 hours of the event. If you attend the event or cancel with more than 24 hours notice your credit card will not be charged.

Check out all the events here:

https://www.riseglobal.org/sessions/day/2012/03/26

All Financial coaching clients who indicated that they are self employed received this information as well, but if one of your clients is self employed, remind them of this great opportunity!