CORINTH — City officials in Corinth could possibly seek to regulate credit access, payday and title lending companies within city limits in the near future. And doing so would make Corinth the eighth city to adopt such an ordinance, according to a Texas Municipal League report.
City Manager Jim Berzina said that discussions are in the early stages, and council members have requested additional information on the issue before making any decisions.
Berzina said that discussions began after City Council members learned of similar efforts by other Texas cities.
“It’s my understanding that the council just wants to see if this is something we need to address,” Berzina said.
The council first discussed the topic during a workshop session in late October.
The item will be coming before the council for further discussion in the near future, city officials said.
Payday lending is a practice in which a person can walk into a business and receive a cash advance on his or her next paycheck. According to officials in the region, interest rates on this type of loan are typically high.
Many state leaders have expressed concerns about the proliferation of the credit access business industry.
According to a Texas Municipal League report, states have enacted laws “to restrict predatory lending practices, but meaningful reforms have failed to pass the Texas Legislature in the last three sessions.”
And in the absence of state action, Texas cities are stepping up to adopt ordinances to protect their residents from some of the practices of this industry, the report stated.
The town of Flower Mound became the seventh and most recent Texas city to adopt an ordinance.
Under Flower Mound’s ordinance, lending companies must register with the city and are regulated as to where they can operate and how much they can lend.
The ordinances that have been adopted by other cities are similar to Flower Mound’s.
Texas Municipal League officials warn that city officials who seek to adopt any ordinance regulating credit access businesses will likely cause stakeholders representing the payday and auto title lending industry to file a lawsuit.
“I’m not sure what direction that the council will take, but it’s a discussion that we plan to look at closely,” Berzina said.
JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.