An ordinance in Killeen, Texas limiting payday lending businesses will be reviewed Tuesday by the Killeen City Council.

The ordinance requires payday lenders to obtain a permit signed by the city’s building official or a designee. It also restricts cash advances from exceeding 20% of a consumer’s gross monthly income. The ordinance is a copy of the one created by the Texas Municipal League and has already been adopted in 31 other Texas cities.

If approved, it will limit the number of fee installments to four, require at least 25% of any monthly payments go to the remaining principal balance of the loan and limits the number of times a lender can roll over or refinance a borrower’s loan to three.

Supporters of short-term lending operations argue that the lenders provide opportunities for people who otherwise would not be able to obtain loans because of their income level or credit history. Still, cities nationwide have been cracking down on the industry.

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