BELTON — The City Council unanimously passed an ordinance Tuesday that will restrict the location and number of alternative financial services in the community, such as payday loans, car title loans and check-cashing businesses.
The genesis of the local ordinance came about when Rucker Preston, executive director of the Helping Hands Ministry, and volunteers with the organization expressed concerns about the practices of payday lending businesses, which charge a high rate of interest, and their negative impact on poor and middle-income families.
“A number of other Texas cities have enacted ordinances regulating alternative financial services,” Planning Director Erin Newcomer said. “We would like to create a distinction between a bank or a credit union and alternative financial services.”
Two alternative financial services already operating in Belton will be grandfathered in at their current locations, Newcomer said. However, other such businesses that want to operate in the city will have to obtain zoning approval from both the Belton Planning and Zoning Commission and the City Council.
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Other changes to city ordinances would prohibit alternative financial services from operating within 1,000 feet of each other, would require them to be at least 200 feet from homes and precludes them from operating within the central business district.
Fees from these businesses are so high that people find them difficult to pay off, Councilman David Leigh said.
“It creates a cycle where more and more fees have to be paid, and it gets to the point where someone would have to pay their entire paycheck in fees,” he said. “It becomes very onerous, and we need some teeth in the ordinance.”