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11 - Credit Access Business report and ordinanceNo. 11 TO: Mayor, Mayor Pro Tem & City Council FROM: Grayson Path, City Manager Stephanie Harris, City Attorney Rob Vine, Assistant City Manager SUBJECT: Credit Access Business Ordinance DATE: May 8. 2023 MI -1 *X61011mil At the October 10, 2022 City Council Meeting, the City Council heard presentations from Texas Appleseed and United Way regarding Credit Access Businesses (CABs) (aka Pay Day Loans and car title loans) with a request that the city adopt an ordinance regulating these businesses to a greater degree than they are currently regulated under state law. From this presentation, the City Council requested that an ordinance regulating these services be produced and brought back to them for consideration. Working with Texas Appleseed, City Staff obtained a copy of a CAB Ordinance produced by the Texas Municipal League (TML) nearly ten years ago. In addition, City Staff obtained a copy of the recently approved City of Reno ordinance. The City of Reno ordinance mirrors that of the City of Austin and the City of Dallas, both of which are currently in litigation. Mayor Paula Portugal, Mayor Pro Tem Reginald Hughes, City Manager Grayson Path, City Attorney Stephanie Harris, and Assistant City Manager Rob Vine met to review the draft TML Ordinance. We made a few slight modifications based on versions approved by other municipalities. At the November 14, 2022 City Council Meeting, City Staff presented a draft ordinance to City Council and recommended a public hearing be conducted at a future Council Meeting to allow businesses a chance to give input. The City Council agreed. On December 9, 2022, we sent each known Credit Access Business within city limits a letter and a copy of the proposed draft ordinance informing them of the public hearing scheduled for January 9, 2023 at 5:30 p.m. City Staff posted a Notice of the Public Hearing on the City website and sent a Notice of the Public Hearing to the Paris News, which was published on December 27, 2022. At the January 9, 2023 City Council Meeting, several representatives from CAB entities addressed the City Council expressing their concern with municipal regulation in light of current state regulation and changes to their business that have occurred since the original TML ordinance came out nearly ten years ago. They expressed a willingness to meet and propose edits. The City Council instructed City Staff to meet with the CABs as well as Texas Appleseed and United Way (those that proposed this ordinance to the City Council) and attempt to work out a compromise version between both parties to then bring back to them, or at least hear and consider edits to the ordinance. From January 2023 until April 2023, the City Manager, City Attorney and Assistant City Manager worked with both parties (CABs and Consumers) in an attempt to negotiate a new draft, a compromise version. This resulted in considerable time spent discussing, considering, researching, editing, etc. The City Council has received numerous emails and updates on this topic throughout this period. During this time, we had opportunity to learn more about case law involving the TML ordinance as well as existing legislation. On February 9, 2023, H.B. 2127 was filed which, if passed and signed into law, would preempt the city from regulating many business, specifically including CABs. A similar bill was introduced in the Senate but was left pending in committee pending House action on H.B. 2127. The House has passed the bill, which includes a "grandfather" clause for ordinances enacted prior to January 1, 2023. We of course had no idea this bill was going to be filed in our previous meetings, nor that there would be a safe harbor for ordinances enacted prior to January I". This bill has been engrossed and is in committee in the Senate. The Senate could pass it as is, or work on a compromise bill with the House. Either way, it is probable that some version of the bill will pass in the Senate and that the Governor will sign it into law. Should that occur, and should the Council pass any version of the ordinance, we would be in a position of needing to repeal it. There have been other bills along similar measures as well as the Texas Attorney General weighing in support of CABs. There is clearly a strong legislative will to prohibit municipalities from regulating business enterprises locally, including specifically CABs. With regard to litigation, we have still not been able to locate a case above the level of a municipal court that has considered the TML ordinance and upheld it on its merits. The primary case on the ordinance concerns the City of Denton, and that case, although decided in favor of the city, turned on a procedural point. In other words, no court (other than a municipal court) that we can find has looked at the ordinance and found that it passes legal muster, and no party has pointed us to one that has. It is more likely that the pending litigation surrounding the Austin and Dallas ordinances will address the merits, and, in the event H.B. 2127 does not become law, it might still be prudent to await the outcome of these cases. STATUS OF ISSUE: Before the City Council tonight is 1) the original ordinance presented to you at your November 14, 2022 City Council meeting, and 2) a redline version following our negotiations and discussions since January 2023. The City worked with the CABs to produce #2, which we are of the understanding they are willing to work with. Upon presenting this to consumer representatives (United Way, Texas Appleseed, and others working alongside them), they ultimately decided to request #1 and for the City Council to not accept any edits to the original ordinance as presented by the CABs in 92. Unable to reach a compromise between both parties, and with much time having transpired, the City Manager decided to stop the process and bring this update to the City Council, seeking guidance as to next steps they wish to see. This has proven to be a very challenging and complex issue to take on. Staff recognizes our limitations when it comes to fully understanding the inner workings of these businesses, authorized to operate by the Texas Legislature by statute, and whether or not the industry is in need of additional regulation beyond what the State of Texas has already enacted. We recognize that there are instances where individuals have found themselves in challenging situations after having taken out a loan, however — as seen with the OCCC quarterly reports — this continues to be a highly sought service for a portion of Texans and those living in our community. We have, as of yet, not received any reports of specific abuses within our community. Furthermore, we recognize that there are strong opinions on both sides of this topic and that there have been concerns with the review process we have undergone these past few months. However, through this all, the process we undertook gave all parties equal footing to provide input to the City Council and their decision to be made. BUDGET: There will be a reasonable registration fee attached to this ordinance in order to cover administrative review costs for issuing a certificate of registration. OPTIONS: 1. Agree to the TML ordinance as presented to the City Council on November 14, 2022 (attached). 2. Agree to the revised TML ordinance as presented to the City Council tonight (attached). 3. Request additional edits to either # 1 or 92 above. 4. Request that city staff go back and talk further with the parties involved to make further edits to either # 1 or #2 above. 5. Do not approve any ordinance. 6. Table this item until a later time TBD, until litigation with the City of Austin and/or the City of Dallas has been completed, and/or until the legislative session has concluded and the final status of H.B. 2127 is determined. 7. Other recommendations as determined by the City Council. RECOMMENDATION: 6. Table this item until a later time TBD, until litigation with the City of Austin and/or the City of Dallas has been completed, and/or until the legislative session has concluded and the final status of H.B. 2127 is determined. ORDINANCE NO. AN ORDINANCE OF THE CITY OF PARIS, TEXAS SETTING FORTH REGISTRATION REQUIRMENTS AND CREDIT EXTENSION REGULATIONS FOR CREDIT ACCESS BUSINESSES BY ADDING ARTICLE 5.12, "CREDIT ACCESS BUSINESSES," TO CHAPTER 5, `BUSINESS REGULATIONS," OF THE CITY OF PARIS CODE OF ORDINANCES; AMENDING APPENDIX A, ARTICLE A1.000, "MISCELLANEOUS FEES," TO ADD SECTION A1.005, "FEES RELATED TO CREDIT ACCESS BUSINESSES;" MAKING OTHER FINDINGS RELATED TO THE SAME; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A PENALTY CLAUSE AND PROVIDING AN EFFECTIVE DATE WHEREAS, certain credit access businesses engage in abusive and predatory lending practices, offering easy money with onerous terms and fees to those members of our community who are in financial straits; and WHEREAS, the practices of certain credit access businesses cause members of our community to become trapped in a cycle of short term, high interest loans resulting in large debt and huge payments; and WHEREAS, in the case of motor vehicle title loans, such arrangements often lead to the loss of borrowers' primary assets, their automobiles, which they require in order to get back and forth to work; and WHEREAS, the City Council finds that the terms of this ordinance strike a reasonable balance between the rights of the credit access industry to operate and prosper and providing some minimal consumer protections and that it is in the best interest of the citizens of the city to adopt same; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That Chapter 5, "Business Regulations," of the City of Paris Code of Ordinances be amended to add a new Article 5.12, "Credit Access Businesses," to read as follows: "Article 5.12 CREDIT ACCESS BUSINESSES 5.12.001 Short Title and Purpose. (a) This article may be known and cited as "Credit Access Businesses." (b) The purpose of this article is to protect the welfare of the citizens of the City of Paris, Texas by monitoring credit access businesses in an effort to reduce abusive and predatory lending practices. To this end, this article establishes a registration program for credit access businesses, imposes restrictions on extensions of consumer credit made by credit access businesses, and imposes recordkeeping requirements on credit access businesses. 5.12.002 Definitions. As used in this chapter: (1) CERTIFICATE OF REGISTRATION means a certificate of registration issued by the director under this article to the owner or operator of a credit access business. (2) CONSUMER means an individual who is solicited to purchase or who purchases the services of a credit access business. (3) CONSUMER'S LANGUAGE OF PREFERENCE is the language the consumer understands best. (4) CREDIT ACCESS BUSINESS has the meaning given that term in Section 393.601 of the Texas Finance Code. (5) DEFERRED PRESENTMENT TRANSACTION has the meaning given that term in Section 393.601 of the Texas Finance Code. (6) DIRECTOR means the City Manager, or City Manager's Designee, to enforce and administer this chapter. (7) EXTENSION OF CONSUMER CREDIT has the meaning given that term in Section 393.001 of the Texas Finance Code. (8) MOTOR VEHICLE TITLE LOAN has the meaning given that term in Section 393.601 of the Texas Finance Code. (9) PERSON means any individual, corporation, organization, partnership, association, financial institution, or any other legal entity. (10) REGISTRANT means a person issued a certificate of registration for a credit access business under this chapter and includes all owners and operators of the credit access business identified in the registration application filed under this chapter. (11) STATE LICENSE means a license to operate a credit access business issued by the Texas Consumer Credit Commissioner under Chapter 393, Subchapter G of the Texas Finance Code. 5.12.003 Violations; Penalty (a) A person, other than a Consumer, who violates a provision of this chapter, or who fails to perform an act required of the person by this chapter, commits an offense. A person, other than a Consumer, commits a separate offense for each and every violation relating to an extension of consumer credit, and for each day during which a violation is committed, permitted, or continued. (b) An offense under this chapter is punishable by a fine of not more than $500. (c) A culpable mental state is not required for the commission of an offense under this article and need not be proved. (d) The penalties provided for in Subsection (b) are in addition to any other remedies that the city may have under city ordinances and state law. (e) A registrant who violates any provision of this chapter is subject to denial of issuance, renewal, or revocation of a certificate of registration. 5.12.004 Defenses It is a defense to prosecution under this article that at the time of the alleged offense the person was not required to be licensed by the state as a credit access business under Chapter 393, Subchapter G, of the Texas Finance Code. 5.12.005 Registration Required A person commits an offense if the person acts, operates, or conducts business as a credit access business without a valid certificate of registration. A certificate of registration is required for each physically separate credit access business. 5.12.006 Registration Application (a) To obtain a certificate of registration for a credit access business, a person must submit an annual application on a form provided for that purpose to the director by April l' of each year. The application must contain the following: (1) The name, street address, mailing address, facsimile number, and telephone number of the applicant. (2) The business or trade name, street address, mailing address, facsimile number, and telephone number of the credit access business. (3) The names, street addresses, mailing addresses, and telephone numbers of the on-site manager, the registered agent for service, and of the credit access business. (4) A copy of a current, valid state license held by the credit access business pursuant to Chapter 393, Subchapter G of the Texas Finance Code. (5) A copy of a current, valid certificate of occupancy showing that the credit access business is in compliance with the City of Paris Code of Ordinances. (6) A non-refundable application fee for the amount established. (b) An applicant or registrant shall notify the director within 45 days after any material change in the information contained in the application for a certificate of registration, including, but not limited to, any change of address and any change in the status of the state license held by the applicant or registrant. 5.12.007 Issuance and Display of Certificate of Registration; Presentment upon Request. (a) The director shall issue to the applicant a certificate of registration upon receiving a completed application under Section 5.12.006 (b) A certificate of registration issued under this section must be conspicuously displayed to the public in the credit access business. The certificate of registration must be presented upon request to the director or any peace officer for examination. 5.02.008 Appeal from Denial or Revocation of Certificate of Registration. Upon denial of issuance or renewal or revocation of a credit access business certificate of registration by the City of Paris, the credit access business owner or operator may appeal the decision to the City Council. (1) The notice of appeal must be in writing, fully briefing the appellant's position and filed with the City Clerk's Office within ten (10) days of the receipt of the notice of denial. (2) The notice of denial or revocation is deemed received and in receipt of the owner or operator of the credit access business on the third day after mailing by the City by certified mail. (3) The City Council, after a public hearing on the appeal, may determine from the notice of appeal and submissions from the Director and testimony taken at the public hearing whether the denial or revocation should be upheld or overturned and the certificate of registration issued. The public hearing shall take place at the next regular meeting of the City Council after the expiration of at least five business days following the City Clerk's receipt of the notice of appeal. (a) A certificate of registration expires on the earliest of - (1) One year after the date of issuance; or (2) The date of revocation, suspension, surrender, expiration without renewal, or other tennination of the registrant's state license. (b) A certificate of registration may be renewed by making application in accordance with Section 5.12.006 by April I" of each year. A registrant shall apply for renewal at least 30 days before the expiration of existing certificate of registration. 5.12.01.0 Non-transferabUity. A certificate of registration for a credit access business is not transferable. (a) A credit access business shall maintain a complete set of records of all extensions of consumer credit arranged or obtained by the credit access business, whether an original -transaction or refinancing or renewal of an extension of consumer credit, which must include the following information: (1) The name and address of the cons-urner. (2) The principal amount of cash actually advanced. (3) The length of the extension of consumer credit, including the number of installments and renewals. (4) The fees charged by the credit access business to arrange or obtain an extension of consumer credit; and (5) The documentation used to establish a consumer's income under Section 5.12.012 of this ordinance. (b) A credit access business shall maintain a copy of each written agreement between the credit access business and a consumer evidencing an extension of a consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer). (c) A credit access business shall maintain copies of all quarterly reports filed with the Texas Consumer Credit Commissioner under Section 393.627 of the Texas Finance Code. be retained for at least three years and made available for inspection by the city upon request during the usual and customary business hours of the credit access business. 5.12.012 Restriction on Extension of Consumer Credit. (a) The cash advanced under an extension of consumer credit that a credit access business + 1110M W U Mffft��Njl INIUMM I'' Ittm UJUDIS I(Yl'd COnSUIntf-'Or aSSIKS d WASUMUf 1A UOLU11111% III UIV 1JU1111 01 a IIIULUr WfIlUie UUC loan may not exceed the lesser of (1) Three percent of the consumer's gross annual income; or (2) 70 percent of the retail value of the motor vehicle. (c) A credit access business shall use a paycheck or other documentation establishing income to determine a consumer's income. ................ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of consumer credit that provides for repayment in installments may not be refinanced or renewed. (e) An extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining and that provides for a single lump sum repayment may not be refinanced or renewed more than three times. Proceeds from each refinancing or renewal ,r be -xaedt�-mff*"Mem��ercert of 9hc=Vr:-r mzt of -�10 origina", consumer credit. (f) For purposes of this section, an extension of consumer credit that is made to a consumer within seven days after a previous extension of consumer credit has been paid by the consumer will constitute a refinancing or renewal. I IM 11 1! 11 1 1 1 1 1 n I I I (a) Every agreement between the credit access business and a consumer evidencing to the consumer), must be written in the conswner's language of preference. Every cre access business location must maintain on its premises, to be available for use by consum agreements in the English and Spanish languages. i (b) For every consumer who cannot read, every agreement between the credit access business and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer) must be read to the consumer in its entirety in the consumer's language of preference, prior to the consumer's signature. (c) For every consumer who cannot read, every disclosure and notice required by law must be read to the consumers in its entirety in the consumer's language of preference, prior to the consumer's signature. 5.12.014 Referral to Consumer Credit Counseling. A credit access business shall provide a form, to be prescribed by the Director, to each consumer seeking assistance in obtaining an extension of consumer credit which references non-profit agencies that provide financial education and training programs and agencies with cash assistance programs. The form will also contain information regarding extensions of consumer credit, and must include the information required by 5.12.011(a)(1)-(5) of this ordinance specific to the loan agreement with the consumer. If the Director has prescribed a form in the consumer's language of preference, the form must be provided in the consumer's language of preference." Section 2. That Appendix A, Article A1.000, "Miscellaneous Fees," shall be and is hereby amended to add Section A1.005, "Fees related to Credit Access Businesses," to read in its entirety as follows: "§ A1.005 Fees related to credit access businesses (1) The application fee for the initial certificate of registration for a credit access business under Article 5.12 of this Code of Ordinances shall be $500.00. (2) The application fee for an annual renewal certificate of registration for a credit access business shall be $250.00." Section 3. That all provisions of the ordinances of the City of Paris, Texas in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Paris, Texas not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 4. That the repeal of any ordinance or part of ordinances affected by the enactment of this ordinance shall not be construed as abandoning any action now pending under or by virtue of such ordinance or as discontinuing, abating, modifying, or altering any penalty accruing or to accrue, or as affecting any rights of the municipality under any section or provisions of any ordinance at the time of passage of this ordinance. Section 5. That this ordinance shall become effective from and after its passage and publication as required by law. ADOPTED THIS day of 2023. Paula Portugal, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney ORDINANCE NO. AN ORDINANCE OF THE CITY OF PARIS, TEXAS SETTING FORTH REGISTRATION REQUIRMENTS AND CREDIT EXTENSION REGULATIONS FOR CREDIT ACCESS BUSINESSES BY ADDING ARTICLE 5.12, "CREDIT ACCESS BUSINESSES," TO CHAPTER 5, "BUSINESS REGULATIONS," OF THE CITY OF PARIS CODE OF ORDINANCES; AMENDING APPENDIX A, ARTICLE A1.000, "MISCELLANEOUS FEES," TO ADD SECTION A1.005, "FEES RELATED TO CREDIT ACCESS BUSINESSES;" MAKING OTHER FINDINGS RELATED TO THE SAME; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A PENALTY CLAUSE AND PROVIDING AN EFFECTIVE DATE WHEREAS, certain credit access businesses engage in abusive and predatory lending practices, offering easy money with onerous terms and fees to those members of our community who are in financial straits; and WHEREAS, the practices of certain credit access businesses cause members of our community to become trapped in a cycle of short term, high interest loans resulting in large debt and huge payments; and WHEREAS, in the case of motor vehicle title loans, such arrangements often lead to the loss of borrowers' primary assets, their automobiles, which they require in order to get back and forth to work; and WHEREAS, the City Council finds that the terms of this ordinance strike a reasonable balance between the rights of the credit access industry to operate and prosper and providing some minimal consumer protections and that it is in the best interest of the citizens of the city to adopt same; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS: Section 1. That Chapter 5, "Business Regulations," of the City of Paris Code of Ordinances be amended to add a new Article 5.12, "Credit Access Businesses," to read as follows: "Article 5.12 CREDIT ACCESS BUSINESSES 5.12.001 Short Title and Purpose. (a) This article may be known and cited as "Credit Access Businesses." (b) The purpose of this article is to protect the welfare of the citizens of the City of Paris, Texas by monitoring credit access businesses in an effort to reduce abusive and predatory lending practices. To this end, this article establishes a registration program for credit access businesses, imposes restrictions on extensions of consumer credit made by credit access businesses, and imposes recordkeeping requirements on credit access businesses. 5.12.002 Defmitions. As used in this chapter: (1) CERTIFICATE OF REGISTRATION means a certificate of registration issued by the director under this article to the owner or operator of a credit access business. (2) CONSUMER means an individual who is solicited to purchase or who purchases the services of a credit access business. (3) CONSUMER'S LANGUAGE OF PREFERENCE is the language the consumer understands best. (4) CREDIT ACCESS BUSINESS has the meaning given that term in Section 393.601 of the Texas Finance Code. (5) DEFERRED PRESENTMENT TRANSACTION has the meaning given that term in Section 393.601 of the Texas Finance Code. (6) DIRECTOR means the City Manager, or City Manager's Designee, to enforce and administer this chapter. (7) EXTENSION OF CONSUMER CREDIT has the meaning given that term in Section 393.001 of the Texas Finance Code. (8) MOTOR VEHICLE TITLE LOAN has the meaning given that term in Section 393.601 of the Texas Finance Code. (9) PERSON means any individual, corporation, organization, partnership, association, financial institution, or any other legal entity. (10) REGISTRANT means a person issued a certificate of registration for a credit access business under this chapter and includes all owners and operators of the credit access business identified in the registration application filed under this chapter. (11) STATE LICENSE means a license to operate a credit access business issued by the Texas Consumer Credit Commissioner under Chapter 393, Subchapter G of the Texas Finance Code. 5.12.003 Violations; Penalty (a) A person, other than a Consumer, who violates a provision of this chapter, or who fails to perform an act required of the person by this chapter, commits an offense. A person, other than a Consumer, commits a separate offense for each and every violation relating to an extension of consumer credit, and for each day during which a violation is committed, permitted, or continued. (b) An offense under this chapter is punishable by a fine of not more than $500. (c) A culpable mental state is not required for the commission of an offense under this article and need not be proved. (d) The penalties provided for in Subsection (b) are in addition to any other remedies that the city may have under city ordinances and state law. (e) A registrant who violates any provision of this chapter is subject to denial of issuance, renewal, or revocation of a certificate of registration. 5.12.004 Defenses It is a defense to prosecution under this article that at the time of the alleged offense the person was not required to be licensed by the state as a credit access business under Chapter 393, Subchapter G, of the Texas Finance Code. 5.12.005 Registration Required A person commits an offense if the person acts, operates, or conducts business as a credit access business without a valid certificate of registration. A certificate of registration is required for each physically separate credit access business. 5.12.006 Registration Application (a) To obtain a certificate of registration for a credit access business, a person must submit an annual application on a form provided for that purpose to the director by April l' of each year. The application must contain the following: (1) The name, street address, mailing address, facsimile number, and telephone number of the applicant. (2) The business or trade name, street address, mailing address, facsimile number, and telephone number of the credit access business. (3) The names, street addresses, mailing addresses, and telephone numbers of the on-site manager, the registered agent for service, and of the credit access business. (4) A copy of a current, valid state license held by the credit access business pursuant to Chapter 393, Subchapter G of the Texas Finance Code. (5) A copy of a current, valid certificate of occupancy showing that the credit access business is in compliance with the City of Paris Code of Ordinances. (6) A non-refundable application fee for the amount established. (b) An applicant or registrant shall notify the director within 45 days after any material change in the information contained in the application for a certificate of registration, including, but not limited to, any change of address and any change in the status of the state license held by the applicant or registrant. 5.12.007 Issuance and Display of Certificate of Registration; Presentment upon Request. (a) The director shall issue to the applicant a certificate of registration upon receiving a completed application under Section 5.12.006 (b) A certificate of registration issued under this section must be conspicuously displayed to the public in the credit access business. The certificate of registration must be presented upon request to the director or any peace officer for examination. 5.02.008 Appeal from Denial or Revocation of Certificate of Registration. Upon denial of issuance or renewal or revocation of a credit access business certificate of registration by the City of Paris, the credit access business owner or operator may appeal the decision to the City Council. (1) The notice of appeal must be in writing, fully briefing the appellant's position and filed with the City Clerk's Office within ten (10) days of the receipt of the notice of denial. (2) The notice of denial or revocation is deemed received and in receipt of the owner or operator of the credit access business on the third day after mailing by the City by certified mail. (3) The City Council, after a public hearing on the appeal, may determine from the notice of appeal and submissions from the Director and testimony taken at the public hearing whether the denial or revocation should be upheld or overturned and the certificate of registration issued. The public hearing shall take place at the next regular meeting of the City Council after the expiration of at least five business days following the City Clerk's receipt of the notice of appeal. 5.12.009 Expiration and Renewal of Certificate of Registration. (a) A certificate of registration expires on the earliest of. (1) One year after the date of issuance; or (2) The date of revocation, suspension, surrender, expiration without renewal, or other termination of the registrant's state license. (b) A certificate of registration may be renewed by making application in accordance with Section 5.12.006 by April 1" of each year. A registrant shall apply for renewal at least 30 days before the expiration of existing certificate of registration. 5.12.010 Non -transferability. A certificate of registration for a credit access business is not transferable. 5.12.011 Maintenance of Records. (a) A credit access business shall maintain a complete set of records of all extensions of consumer credit arranged or obtained by the credit access business, whether an original transaction or refinancing or renewal of an extension of consumer credit, which must include the following information: (1) The name and address of the consumer. (2) The principal amount of cash actually advanced. (3) The length of the extension of consumer credit, including the number of installments and renewals. (4) The fees charged by the credit access business to arrange or obtain an extension of consumer credit; and (5) The documentation used to establish a consumer's income under Section 5.12.012 of this ordinance. (b) A credit access business shall maintain a copy of each written agreement between the credit access business and a consumer evidencing an extension of a consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer). (c) A credit access business shall maintain copies of all quarterly reports filed with the Texas Consumer Credit Commissioner under Section 393.627 of the Texas Finance Code. (d) The records required to be maintained by a credit access business under this section must be retained for at least three years and made available for inspection by the city upon request during the usual and customary business hours of the credit access business. 5.12.012 Restriction on Extension of Consumer Credit. (a) The cash advanced under an extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining in the form of a deferred presentment transaction may not exceed 20 percent of the consumer's gross monthly income. (b) The cash advanced under an extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining in the form of a motor vehicle title loan may not exceed the lesser of: (1) Three percent of the consumer's gross annual income; or (2) 70 percent of the retail value of the motor vehicle. (c) A credit access business shall use a paycheck or other documentation establishing income to determine a consumer's income. (d) An extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining and that provides for repayment in installments may not be payable in more than four installments. Proceeds from each installment must be used to repay at least 25 percent of the principal amount of the extension of consumer credit. An extension of consumer credit that provides for repayment in installments may not be refinanced or renewed. (e) An extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining and that provides for a single lump sum repayment may not be refinanced or renewed more than three times. Proceeds from each refinancing or renewal must be used to repay at least 25 percent of the principal amount of the original extension of consumer credit. (f) For purposes of this section, an extension of consumer credit that is made to a consumer within seven days after a previous extension of consumer credit has been paid by the consumer will constitute a refinancing or renewal. 5.12.013 Requirement of Consumer Understanding of Agreement. (a) Every agreement between the credit access business and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer), must be written in the consumer's language of preference. Every credit access business location must maintain on its premises, to be available for use by consumers, agreements in the English and Spanish languages. (b) For every consumer who cannot read, every agreement between the credit access business and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer) must be read to the consumer in its entirety in the consumer's language of preference, prior to the consumer's signature. (c) For every consumer who cannot read, every disclosure and notice required by law must be read to the consumers in its entirety in the consumer's language of preference, prior to the consumer's signature. 5.12.014 Referral to Consumer Credit Counseling. A credit access business shall provide a form, to be prescribed by the Director, to each consumer seeking assistance in obtaining an extension of consumer credit which references non-profit agencies that provide financial education and training programs and agencies with cash assistance programs. The form will also contain information regarding extensions of consumer credit, and must include the information required by 5.12.011(a)(1)-(5) of this ordinance specific to the loan agreement with the consumer. If the Director has prescribed a form in the consumer's language of preference, the form must be provided in the consumer's language of preference." Section 2. That Appendix A, Article A1.000, "Miscellaneous Fees," shall be and is hereby amended to add Section A1.005, "Fees related to Credit Access Businesses," to read in its entirety as follows: "§ A1.005 Fees related to credit access businesses (1) The application fee for the initial certificate of registration for a credit access business under Article 5.12 of this Code of Ordinances shall be $500.00. (2) The application fee for an annual renewal certificate of registration for a credit access business shall be $250.00." Section 3. That all provisions of the ordinances of the City of Paris, Texas in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Paris, Texas not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 4. That the repeal of any ordinance or part of ordinances affected by the enactment of this ordinance shall not be construed as abandoning any action now pending under or by virtue of such ordinance or as discontinuing, abating, modifying, or altering any penalty accruing or to accrue, or as affecting any rights of the municipality under any section or provisions of any ordinance at the time of passage of this ordinance. Section 5. That this ordinance shall become effective from and after its passage and publication as required by law. ADOPTED THIS day of 2023. Paula Portugal, Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: Stephanie H. Harris, City Attorney