SAN ANTONIO – "I feel like I'm being ripped off,” a woman News 4 is calling Rose says about her payday loan. “There should be a law for this."
She asked News 4 to hide her identity because she owes a lot of money.
"It is embarrassing,” she says.
There actually is a law regulating payday loans in San Antonio. City council passed an ordinance last fall imposing stricter guidelines on short-term lenders.
The
city’s Finance Department says it would enforce the new rules, but so far, there have been no formal complaints.
Still, though, there are a lot of things people need to know before getting payday loans.
Whether it’s “cash today” or “express loans,” if you need money right now, payday loan businesses are there in a pinch.
That’s why Rose signed up for one. She needed $800 and got it immediately.
"To be honest with you, I don't even know the interest rate on that money that I borrowed,” Rose says.
Her annual rate is a whopping 270%. There’s just one problem: she didn’t have the money to pay it back. She still doesn’t, six months later.
"There are so many pages and they're written in small letters,” Rose says.
The city’s received a lot of phone calls from people like Rose who got payday loans before the ordinance went into effect January 1.
The ordinance is not retroactive, so anyone who got a loan before that date is not eligible under the new rules.
The ordinance limits payday loans to 20% of your monthly income. Car title loans are limited to 3% of your annual income or 70% of the car’s value. And, it limits loans to four renewals or extensions.
"It also requires that a portion of that be put back to the principal so that you're paying that down faster over time,” City of San Antonio Finance Director Troy Elliott says.
Elliott explained you may see some businesses like one News 4 spotted advertising, “Business as usual. We are not affected by the San Antonio ordinance.”
He says the reason is very simple: that business is technically located in Balcones Heights, and the ordinance only applies to lenders inside San Antonio.
"I'm doing this [interview] just to help out other people like me who are in a bad situation,” Rose says.
She’s now begging people: don’t make her mistake – read the fine print before you sign the dotted line.
The
new rules are explained on the city’s Finance Department website. The department also posted
the forms you need to file a formal complaint with the city.
News 4 will also have several copies available at its studio at 1031 Navarro, at the corner of St. Mary’s and Navarro downtown.
