Interesting development on the subject of the so-called Payday Loan City Ordinance

Interesting development on the subject of the so-called Payday Loan City Ordinance

by The CAB Man Texas on April 19, 2019

The Austin American Statesman put out an article this week (Senate votes to limit city regulations on private businesses.”) that discussed two bills in the legislature that were about to be passed by the Senate.  The bills, SB 2486 and SB 2488, will limit local government control over private businesses.  It appears the bills are directly focused on employer issues like hiring practices and break times.  

After hearing some very familiar talking points that support the authority of State law over local ordinances, it stands to reason that the passage of bills like these could lead to better days for Credit Access Businesses offering payday loans, installment loans, and title loans in Texas. 

Of course, an Austin City Council Member testified at a hearing against one of the bills.  Greg Cesar said one of the bills “disgracefully” preempted local regulations.  Let me remind Councilman Cesar of what a disgrace the attempted enforcement of the Payday Loan City Ordinance has been for the City of Austin.  They have been involved in two lawsuits for 2+ years against Speedy Cash and Advance America.  It has been a back and forth legal battle that has consumed City of Austin resources for far too long and even with all that money and time spent, no victory for Austin.  I am sure the residents of Austin would rather have their tax dollars spent on more meaningful subjects.  That is the disgrace! 

Now that I got a good swipe in against the Austin City Council, I will get back to two strong talking points I saw used. Each of them can be used almost as a mirror image in the argument for preemption of the Payday Loan City Ordinance by existing Texas law.

“One comment dismissed concerns over water breaks and work environments, stating that the Occupational Safety and Health Administration already regulates workplace safety.”  (This is exactly the same scenario with Credit Access Businesses – we are already regulated by the Office of Consumer Credit Commissioner).

Senator Creighton said: “I believe in uniformity across the state for the applicant and also for the employer, and it should happen in this building.” (This really applies to any business in Texas with more than one location.  Operating Credit Access Businesses in a City with an Ordinance and one without an Ordinance causes operational confusion and customer inconvenience).

At this point I believe that many Cities in Texas no longer look at passing the Payday Loan Ordinance because they know if they pass it and enforce it they will be looking at allocating several years’ worth of time in lawsuits over it.  So that addresses the further spreading of the Ordinance.  In terms of rolling back existing Ordinances across Texas, perhaps there issome opportunity ahead where the passage of these two bills creates the precedent for leaders in our industry to get that done!

This blog post was written by Michael Brown, President of CAB Consulting and the Texas Organization of Financial Service Centers.  He can be reached at 214-293-8676, or

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