Houston Matters

Have Payday Lenders Lost Business Since Houston’s New Regulations Went Into Effect?

You’ve seen them all over Greater Houston – and maybe you’ve even had to use one: payday or auto title loan centers. Customers short on cash can get a high-interest loan due at their next payday or they can borrow money with the title to their car as collateral. There are about 360 payday and […]

Image Courtesy: Houston Chronicle

You’ve seen them all over Greater Houston – and maybe you’ve even had to use one: payday or auto title loan centers. Customers short on cash can get a high-interest loan due at their next payday or they can borrow money with the title to their car as collateral.

There are about 360 payday and auto-title lenders in the city proper, still more throughout Harris County, and some 3,400 of them statewide, according to Houston Chronicle reporter Mike Morris.

He’s been following the industry here in Houston and watching how it’s been affected by a new Houston ordinance that regulates how much customers can borrow and creates terms intended to force borrowers to pay the loans back faster. The ordinance passed last December and went into effect in July. It’s similar to ordinances passed in Austin, Dallas and San Antonio in recent years.

Industry groups decried the law saying it would force payday lenders to close and employees to lose their jobs.

Houston Matters’ Michael Hagerty spoke with Mike Morris about the effect of the new ordinance so far, and asked him to explain how payday and auto title loans work – and often trap borrowers in a cycle of debt.

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