Austin, Texas, city council members will vote this week to pass legislation that would limit the proximity of short term loan stores to eachother and to households, Your News Now reports.
Council member Bill Spelman explains that short term lenders often prey on vulnerable targets who are low on cash and don't have bank accounts. Many times, exorbitant interest rates end up being more expensive to pay back than the loan itself. "Places like these short term lenders make it very, very easy for people to do the wrong thing and get sucked into a vortex they can't get out of," Spelman told the media outlet. The new law proposes that short term loan stores be placed at least 200 feet from any home and 500 feet from any major highway. Establishments have already been banned in three neighborhoods. The Austin Business Journal adds that an additional bill to be considered by the council would require short term lenders to register with the city where they're located in. This will allow data to be maintained on stores' operations, and place restrictions on the number of loans for which consumers can apply.