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HomeMy WebLinkAboutOrdinance No. 2013-2036 CITY OF THE COLONY, TEXAS ORDINANCE NO. 2013-2036 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, AMENDING CHAPTER 13 OF THE CODE OF ORDINANCES, BY ADDING A NEW ARTICLE XIII, SECTIONS 13-160 TO 13-171, ENTITLED "CREDIT ACCESS BUSINESSES," ESTABLISHING A REGISTRATION PROGRAM FOR CREDIT ACCESS BUSINESSES; IMPOSING RESTRICTIONS ON EXTENSIONS OF CONSUMER CREDIT MADE BY CREDIT ACCESS BUSINESSES; IMPOSING RECORDKEEPING REQUIREMENTS ON CREDIT ACCESS BUSINESSES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A SAVINGS CLAUSE; PROVIDING A PENALTY OF A FINE NOT TO EXCEED FIVE HUNDRED DOLLARS ($500) FOR EACH AND EVERY OFFENSE; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of The Colony, Texas (hereinafter referred to as the "City") possess the full power of local self-government pursuant to the Texas Home Rule Amendment to the Texas Constitution, contained in Article XI, Section 5 thereof, as well as Section 51.072 of the Texas Local Government Code, as amended; and WHEREAS, it is the desire of the City Council of the City of The Colony, Texas, to protect the welfare of the citizens of the City by monitoring credit access businesses in an effort to reduce abusive and predatory lending practices, including any unreasonable adverse effect on low income or financially challenged individuals. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS, THAT: SECTION 1. The findings set forth above are incorporated into the body of this Ordinance as if fully set forth herein. SECTION 2. That the Code of Ordinances of the City of The Colony, Texas be, and the same is, hereby amended by amending Chapter 13 by adding a new Article XIII, Sections 13-160 to 13-171, entitled "Credit Access Businesses," which shall read as follows: "ARTICLE XIII. CREDIT ACCESS BUSINESSES See. 13-160. Purpose of Article. The purpose of this article is to protect the welfare of the citizens of the City of The Colony by monitoring credit access businesses in an effort to reduce abusive and predatory lending practices. To this end, this article establishes a registration program for credit access businesses, imposes restrictions on extensions of consumer credit made by credit access businesses, and imposes recordkeeping requirements on credit access businesses. See. 13-161. Definitions. In this article: (1) Certificate of Registration means a certificate of registration issued by the director under this article to the owner or operator of a credit access business. (2) Consumer means an individual who is solicited to purchase or who purchases the services of a credit access business. (3) Credit Access Business has the meaning given that terms in Section 393.601 of the Texas Finance Code, as amended. (4) Deferred Presentment Transaction has the meaning given that term in Section 393.601 of the Texas Finance Code, as amended. (5) Director means the director of the department or other designated unit by the City Manager to enforce and administer this article and includes any representatives, agents, or department employees designated by the director. (6) Extension of Consumer Credit has the meaning given that term in Section 393.001 of the Texas Finance Code, as amended. (7) Motor Vehicle Title Loan has the meaning given that term in Section 393.601 of the Texas Finance Code, as amended. (8) Person means any individual, corporation, organization, partnership, association, financial institution, or any other legal entity. (9) Registrant means a person issued a certificate of registration for a credit access business under this article and includes all owners and operators of the credit access business identified in the registration application filed under this article. (10) State License means a license to operate a credit access business issued by the Texas Consumer Credit Commissioner under Chapter 393, Subchapter G of the Texas Finance Code, as amended. (11) City means the City of The Colony, Texas. See. 13-162. Violations; Penalty. (a) A person who violates a provision of this article, or who fails to perform an act required of the person by this article, commits an offense. A person commits a separate offense each day or portion of a day during which a violation is committed, pennitted, or continued. (b) An offense under this article is punishable by a fine of not more than $500.00. (c) A culpable mental state is not required for the commission of an offense under this article and need not be proved. (d) The penalties provided for in Subsection (b) are in addition to any other enforcement remedies that the City may have under City ordinances and state law. Sec. 13-163. Defense. It is a defense to prosecution under this article that at the time of the alleged offense the person was not required to be licensed by the state as a credit access business under Chapter 393, Subchapter G of the Texas Finance Code, as amended. Sec. 13-164. Registration required. A person commits an offense if the person acts, operates, or conducts business as a credit access business without a valid certificate of registration. A certificate of registration is required for each physically separate credit access business. Sec. 13-165. Registration Application. (a) To obtain a certificate of registration for a credit access business, a person must submit an application on a form provided for that purpose to the director. The application must contain the following: (1) The name, street address, mailing address, facsimile number, and telephone number of the applicant. (2) The business or trade name, street address, mailing address, facsimile number, and telephone number of the credit access business. (3) The names, street addresses, mailing addresses, and telephone numbers of all owners of the credit access business and other persons with a financial interest in the credit access business, and the nature and extent of each person's interest in the credit access business. (4) A copy of a current, valid state license held by the credit access business. (5) A copy of a current, valid certificate of occupancy showing that the credit access business is in compliance with the City's Code of Ordinances. (6) A non-refundable application fee of $50. (b) An applicant or registrant shall notify the director within forty-five (45) days after any material change in the information contained in the application for a certificate of registration, including, but not limited to, any change of address and any change in the status of the state license held by the applicant or registrant. Sec. 13-166. Issuance and Display of Certificate of Registration; Presentment upon Request. (a) The director shall issue to the applicant a certificate of registration upon receiving a completed application under Section 13-165. (b) A certificate of registration issued under this section must be conspicuously displayed to the public in the credit access business. The certificate of registration must be presented upon request to the director or any peace officer for examination. Sec. 13-167. Expiration and Renewal of Certificate of Registration. (a) A certificate of registration expires on the earlier of: (1) one year after the date of issuance; or (2) the date of expiration, revocation, or other termination of the registrant's state license. (b) A certificate of registration may be renewed by making application in accordance with Section 13-165. A registrant shall apply for renewal at least thirty (30) days before the expiration of the registration. Sec. 13-168. Nontransferability. A certificate of registration for a credit access business is not transferable. Sec. 13-169. Location of Credit Access Businesses. Any lot containing a credit access business establishment shall be located at least one thousand feet (1,000') from any lot containing another credit access business establishment, as measured in a straight line between the nearest points of one lot to the other lot. Sec. 13-170. Maintenance of Records. (a) A credit access business shall maintain a complete set of records of all extensions of consumer credit made by the credit access business, which must include the following information: (1) The name and address of the consumer; (2) The principal amount of cash actually advanced; (3) The documentation used to establish a consumer's income under Section 13- 171(c). (b) A credit access business shall maintain a copy of each written agreement between the credit access business and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer). (c) A credit access business shall maintain copies of all quarterly reports filed with the Texas Consumer Credit Commissioner under Section 393.627 of the Texas Finance Code, as amended. (d) The records required to be maintained by a credit access business under this section must be retained for at least three (3) years and made available for inspection by the City upon request during the usual and customary business hours of the credit access business. Sec. 13-171. Restrictions on Extensions of Consumer Credit. (a) The cash advanced under an extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining in the form of a deferred presentment transaction may not exceed twenty percent (20%) of the consumer's gross monthly income. (b) The cash advanced under an extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining in the form of a motor vehicle title loan may not exceed the lesser o£ (1) three percent (3%) of the consumer's gross annual income; or (2) seventy percent (70%) of the retail value of the motor vehicle. (c) A credit access business shall use a paycheck or other documentation establishing income to determine a consumer=s income. (d) An extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining and that provides for repayment in installments may not be payable in more than four (4) installments. Proceeds from each installment must be used to repay at least twenty-five percent (25%) of the principal amount of the extension of consumer- credit. An extension of consumer credit that provides for repayment in installments may not be refinanced or renewed. (e) An extension of consumer credit that a credit access business obtains for a consumer or assists a consumer in obtaining and that provides for a single lump sum repayment may not be refinanced or renewed more than three (3) times. Proceeds from each refinancing or renewal must be used to repay at least twenty-five percent (25%) of the principal amount of the original extension of consumer credit. (f) For purposes of this section, an extension of consumer credit that is made to a consumer within seven (7) days after a previous extension of consumer credit has been paid by the consumer will constitute a refinancing or renewal." SECTION 3. If any section, article paragraph, sentence, clause, phrase or word in this ordinance, or application thereto any persons or circumstances is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance; and the City Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. SECTION 4. That all provisions of the Ordinances of the City of The Colony, Texas, in conflict with the provisions of this ordinance be, and the same are hereby amended, repealed, and all other provisions of the Ordinances of the City not in conflict with the provisions of this ordinance shall remain in full force and effect. SECTION 5. Any person, finu, or corporation violating any of the provisions of this ordinance shall be deemed guilty of a misdemeanor and, upon conviction in the municipal court of the City of The Colony, Texas, shall be punished by a fine not to exceed the sum of Five Hundred Dollars ($500.00) for each offense. Every day a violation occurs shall constitute a separate offense. SECTION 6. This Ordinance shall become effective from and after its date of passage in accordance with law. PASSED AND APPROVED BY TH - CITY C UNCIL OF THE CITY OF THE COLONY, TEXAS, THIS day of O~ , 2013. Job McCourty, Mayor ATTES V. Christie Wilson, City Secretary APPROVED AS TO FORM: - TE X PS Jeff Moor, City Attorney ~_/f