Credit Access Business Ordinances
Texas State Statute Chapter 393 requires credit access businesses, payday lenders and auto title lenders to obtain a state issued license before conducting business in the state. The City of Bryan recently amended the City of Bryan Code of Ordinances, Chapter 18 “Businesses” by adding Article III, entitled “Credit Access Businesses”. Ordinance 2032 was passed after a second reading on February 3, 2014, with an effective date of August 1, 2014.
Ordinance 2032 states that a Credit Access Business is a credit service organization that obtains for a consumer or assists a consumer in obtaining an extension of consumer credit in the form of a deferred presentment transaction or a motor vehicle title loan (definition originates from Section 393.601 of the Texas Finance Code).
The City of Bryan also adopted Ordinance 2041 on May 27, 2014. This ordinance amended the City of Bryan Code of Ordinances, Chapter 130 “Zoning” to include the definition for a credit access business, defined allowed building types for new or relocating businesses, and created distance requirements between credit access business locations and business locations from residential uses. The effective date for Ordinance 2041 is also August 1, 2014. Credit access businesses that have been in existence since before August 1, 2014, are considered legally non-conforming uses at their current location and do not have to meet the requirements of Ordinance 2041.
The key points of Ordinance 2032 include providing for a registration program for credit access businesses that impose restrictions on extensions of consumer credit made by credit access businesses, and imposes record-keeping requirements on credit access businesses. The terms of the Ordinances include:
- A credit access business must apply for and receive a certificate of registration from the City of Bryan.
- A credit access business must maintain complete records of all loans made by the business for at least three (3) years and make the records available to the City for inspection upon request.
- The amount of a payday loan may not exceed 20 percent (20%) of the consumer’s (borrower’s) gross monthly income.
- The amount of an auto title loan may not exceed the lesser of three percent (3%) of the consumer’s (borrower’s) gross annual income or seventy percent (70%) of the retail value of the motor vehicle.
- Any loan from a credit access business that provides for repayment in installments may not be payable in more than four (4) installments, and the proceeds from each installment must be used to repay at least twenty-five percent (25%) of the principal amount of the loan. No renewals or refinancing of installment-payment loans are permitted.
- Any loan from a credit access business that provides for a single lump sum repayment may not be refinanced or renewed more than three (3) times, and the proceeds from each refinancing or renewal must be used to repay at least twenty-five percent (25%) of the principal amount of the loan. Any loan made to a consumer within seven (7) days of a previous loan being paid by the consumer constitutes a refinancing or renewal.
- Every agreement between the credit access business and a consumer evidencing an extension of consumer credit must be written in the consumer’s language of preference.
- A credit access business shall provide a form, to be prescribed by the City, for each consumer seeking assistance in obtaining an extension of consumer credit which references non- profit agencies that provide financial education and training programs.
- As an existing credit access business within the city limits of Bryan as of August 1, 2014, this business is now considered a legally non-conforming, or grandfathered, use at the current physical location. Existing businesses are still required to register with the City. Should the grandfathered business change locations after August 1, 2014, all requirements of Ordinance 2041 would apply.
- Any new or relocating credit access business within the city limits of Bryan will require the approval of a conditional use permit from the Planning and Zoning Commission, and must comply with Ordinance 2041 of the City of Bryan Code of Ordinances.
Additionally, Resolution No. 3528 establishes a fee of $50.00 for each physically separate credit access business within the city limits of Bryan, Texas. The annual registration fee is non-refundable and must be submitted at the time of the application. Any credit access business not in compliance with Ordinance No. 2032 and Resolution 3528 may be subject to civil penalties of $500.00 per occurrence and for each day during which a violation is committed, permitted or continued.
Below are the credit access business registration instructions and checklist, as well as an application form and complete copies of the ordinances and resolution. After completion of the registration process, the City will provide a registration certificate which will need to be conspicuously displayed to the public.
For questions regarding the credit access business registration application process or Ordinance 2041, please contact Planning and Development Services at 979-209-5030.
For questions regarding Ordinance 2032, Resolution No. 3528, or general credit access business questions, please contact Community Development Services at 979-209-5175.