Senior citizens groups say they are getting eaten alive by loan sharks.
The San Antonio City Council is ready to limit title loan rates and outrageous fees. AARP says that 1 in 5 borrowers in Texas are seniors. On Wednesday bus loads of seniors showed up at city hall to tell council members they want limits on title loans.
“What’s happening though is many of these Texans are taking these loans, they can’t pay them off by the first due date. They can’t by the second due date. And so they truly get on this treadmill of debt where they keep paying and paying,” says Tim Morestead with AARP.
City council unanimously moved forward on the ordinance to bring it to a vote later in August. That’s when opposition to the regulations is expected from the loan industry.
City council unanimously moved forward on the ordinance to bring it to a vote later in August. That’s when opposition to the regulations is expected from the loan industry.
If passed the cash advances may not exceed 20 percent of the consumer's gross monthly income.
Repayments may only be made in no more than four installments, and at least 25 percent of the payment must go to the principal. Installment agreements may not be refinanced.
Repayments may only be made in no more than four installments, and at least 25 percent of the payment must go to the principal. Installment agreements may not be refinanced.
Council members says their plan is similar to the ordinances passed in Austin and Dallas.
Diego Bernal of District 1 said, “We are not eliminating the industry. We’re making things more reasonable. We’re making things more manageable. We’re making thing more fair.”
Supporters say even with the new regulations the loan industry will still be doing alright.
“They’ll make money," said supporter Carrie Berban. "They’re not going to be on the losing side. I’ve been here a long time and I know that."
