Midland, Texas, is the latest in a growing number of cities proposing an ordinance that affects payday lenders, or credit access businesses.

The proposed ordinance, discussed but not voted on during a Midland City Council meeting Tuesday, would require payday lenders to annually register with the city, make restrictions on the loan amounts and the refinancing, and file documentation for each loan that is made, according to the Midland Reporter-Telegram.

City officials believe payday lenders operate within a loophole of the Texas Finance Code and act as a middleman between banks and consumers. As the middleman, the payday loan businesses take a loan from a bank, pass the money to a customer needing a loan, and then charge the customer costly fees that are not considered interest.

Some of the restrictions include limiting the loan to 20% of the consumer's monthly income, limiting the loans to no more than four installments, and prohibiting lenders from refinancing or renewing a loan that is payable in installments.

Nationwide, 15 states either ban payday loans or cap the interest rate at 36%.

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