Jan. 31, 2013
-- Recently the El Paso Times released an article regarding the passage of a new city ordinance in El Paso regulating pay-day-loan and title loan lending. The ordinance restricts the maximum borrowing amount on pay-day-loans to 20% of the borrower’s monthly income and auto-loans to 3% of a borrower’s yearly income, or up to 70% of the vehicle’s value. The reason given by the City of El Paso for passing such restrictions was outlined by City Rep. Susie Byrd who stated "the ordinance does what the state doesn't do," "We owed it to El Paso families to put in place common-sense regulations to protect people from these loans,". This statement was in agreement with AARP volunteer Jose Espinoza, who had this today regarding the fast-cash lending industry "payday and auto-loan businesses prey on the economically vulnerable citizens in El Paso, destabilizing families and undermining the local economy."
While these statements are to a degree a honest reflection on the practices of some lenders, it is not however a completely accurate or fair assessment of the industry at-large. El Paso Car Title Loans has been on the forefront of lending affordable car title loans to the citizens of the El Paso-area for the past decade. Our car title loan interest rates are among the lowest in state of Texas, in fact El Paso Car Title Loans has some of the lowest car title loan interest rate in the nation. Needless regulation on our industry only hurt reputable lending concerns whose only mission is to get deserving families and individuals the money they need when they need it the most. Ordinances such as the recent El Paso one mimics similar regulations in Dallas, San Antonio, and Austin only serve to harm the borrower and only slightly hinder unscrupulous lending intuitions.
In lieu of such knee-jerk legislation, government bodies should aid borrowers in finding the best lender. Educating the consumer on what to look for in a title loan is key in making sure that they are not taken advantage of. Also, does it not make more sense to attack companies on an individual basis for their lending improprieties rather than restricting lenders regardless of their good reputations?
This is why it is more important than ever for the borrowers to stand up for their rights as consumers. They should not be handicapped by maximum lending caps set by government officials who have nearly a clue of the needs of fast-cash borrowers.
Another troubling attack on the fast-cash lending industry is the absurd assertion that pay-day-loan and title loan locations are only in poor communities to take advantage of the residents. Saul Frank a local pawn shop owner had this to say in response to the allegation "All this thing about predatory lending and being in poor locations and lending to the poor is a misconception. We're going to people who are in need of money, who can't go to a bank, who can't go to a credit union, need money for medicines, to fix their car or pay an electric bill,"
Complaints likes these are really logged against other companies. As the old adage says “location is everything”. This is why businesses are located in strategic areas to maximize customer traffic to drive up profit. So it only makes sense that lenders would place their locations where their customer base is. If that happens to be in an impoverished area that is only a matter of coincidence not design.
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