City ordinances in Texas regulating payday loans fall short of adequately stemming payday lending’s adverse effects. While many in the Texas legislature have attempted to directly regulate payday loans, these legislators have been unsuccessful. In the wake of failed state legislation, Texas cities have tried to fill the void.
While cities have been successful in passing ordinances regulating payday loans, this Comment finds that these ordinances will do little to alter the payday lending landscape or ensure protection against payday lending’s pitfalls. Ordinances passed by Texas cities impose no cap on fees, impose no effective cap on the size of loans, and impose no effective limit on loan rollovers.