City officials in Longview, Texas are planning to review placing restrictions on “credit access” businesses such as title and payday loan outlets. City council officials will discuss the plan on Thursday.

City spokesman Shawn Hara said the ordinance being drafted would be based on regulations in other Texas cities, as well as on information provided by the Texas Municipal League. Restrictions provided by the Texas Municipal League include keeping a complete record of loans made by the business for three years that are available for city inspection, as well as limiting the payday loan to no more than 20% of the consumer's gross monthly income.

More than 25 cities in Texas already have adopted similar legislation, with some amended zoning ordinances for alternative financial services, which requires a specific-use permit.According to the Texas Municipal League, the petition comes after an appellate court's dismissal of an attempt by ACE Cash Express to invalidate a payday lending ordinance in Denton, Texas.

The Texas Municipal League said ACE first filed a suit against the city of Denton in a civil court, arguing that the ordinance exceeded the city's police power, violated due process and exceeded the city's constitutional authority. 

There has been litigation from such businesses against other Texas cities including Austin, San Antonio and Dallas that have enacted the model ordinance. ACE filed a petition for review Dec. 22 with the Texas Supreme Court.

A trial court determined it didn't have jurisdiction over the lawsuit, and that the proper place to challenge a criminal ordinance is in a criminal court, not a civil court.

ACE appealed the trial court's decision to the Fort Worth Court of Appeals, which also ruled in favor of the city and dismissed the case.


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