11 - Credit Access Business Ordinance

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The following is meant to serve as a summary of this ordinance. 1. Section 5.12.001 — Title of Article — "Credit Access Businesses" and purpose for article. 2. Section 5.12.002 — Definitions — With references to State of Texas Finance Code. 3. Section 5.12.003 — Penalties for violating ordinance - $500/offense/day and subject to revocation of certificate of registration. Does not apply to the consumer, the client of the CAB. 4. Section 5.12.004 — Defenses 5. Section 5.12.005 — 5.12.007 — Regulation #1 — Registration required to serve as a CAB in the City of Paris. Basic application information required (name, address, state license, etc.). Must display license at location. 6. Section 5.12.008 — Appeal — Should their registration be revoked or denied, City Council shall hear their appeal, if made, at the next available Council Meeting. Given the City Manager, or designee, is the Director, recommended that it be an entity above the City Manager. 7. Section 5.12.009 — Certificate expires after one year, must renew. Ordinance takes effect April 1, 2023. 8. Section 5.12.010 — Certificate is non -transferable. 9. Section 5.12.011 — Regulation #2 — Must maintain basic information and records, for three years, on all credit transactions. This information is necessary in order to investigate violations of the ordinance. 10. Section 5.12.012 — Regulation #3 — Extensions of credit are limited to the following: a. 20% of consumer's gross monthly income. b. For Motor Vehicle — 3% of consumer's gross annual income or 70% of vehicle retail value. c. When repayment is designed using installments, limit of four (4) payment installments, each of which pays at least 25% of principal. d. When repayment is designed as lump sum, limit of three (3) renewals or refinancing, each of which must pay at least 25% of principal. 11. Section 5.12.013 — Regulation 44 — All consumers must understand the agreement they are signing with the CAB, thus a language requirement. 12. Section 5.12.014 — Regulation #5 — All consumers must be provided a sheet with financial counseling options. From speaking with other communities, CABs have generally complied as they have found the above information to be within their ability to do and still operate. This ordinance does not prohibit anyone from using the services of a CAB. It also does not place any additional zoning restrictions. This ordinance is primarily complaint -driven due to limits in our enforcement and auditing resources, therefore enforcement will primarily occur when cause is known and/or given. It however does not preclude us from taking initiative action to audit and inspect from time to time as resources allow. This ordinance gives consumers protection should they choose to pursue violations of the ordinance made against them during these transactions by bringing them to our attention.