Too Many Borrowers Caught with High Fees, Penalties
EL PASO — In today's El Paso city council session, council introduced an idea to limit the amount of money El Pasoans can borrow through so-called pay-day loans. City rep Susie Byrd is behind the idea. Right now, she says, pawn shops and other vendors charge as much as 23 dollars for every 100 dollars a person comes in to borrow. When the borrower can't pay back the money in time, they pay additional high fees until they can retire the loan.
Byrd tells us, "One provision is, if you're going to take out a payday loan, you can't borrow more than 20 percent of your monthly income. There's a similar provision for auto title loans, the idea being to make it more affordable for consumers. Often they're taking out or being lent more than they're able to pay back."
This afternoon we spoke to the manager of one payday loan business. He says it wouild be a great idea if the city would go ahead and limit the amount of money people can borrow, because it would be a lot easier on him if he doesnt have to spend so much time tracking down people who borrow more than they can pay back.
And why not limit the amount these pay day loan businesses charge a customer? Wouldn't that help the consumer too? Of course...But Byrd points out no city has the power to limit lenders in that way. only the state does..so council's ready to come at the problem from where the borrower stands.