If you’re reading this article, you probably already know that payday loans in Houston aren’t what they used to be. As of two years ago, Houston enacted numerous laws that were intended to regulate the payday loan industry. On top of that, these changes also had the effect of regulating the title loan industry as well as most other short-term lenders in Houston. A few things to note about the changes to payday loans in Houston. The changes that Houston and other Texas cities put in place did not go into effect until the middle of 2015. That is just over one year ago. Additionally, these changes were based on other regulations that were put in place in other Texas cities. For example, San Antonio and Dallas have similar restrictions in place to regulate payday loan companies. In an ideal situation, these new Houston payday loan rules will mirror the changes that are already in place in other Texas cities.
The main implications of these changes are intended to control payday loans Houston. Specifically, payday loan companies in Houston are supposed to register with the city of Houston each year. This takes us back to consumer protections that were unveiled a few years ago in Houston. This measure is not specific to the city of Houston. It works in concert with other cities throughout Texas like Dallas and San Antonio.This regulation is intended to control the lenders that provide loans within the city of Houston. If a lender wants to provide loans they must register. Other high-level regulations include the fact that payday loans in Houston are limited to a certain percentage of the applicants’ monthly income. Lastly, someone who takes out a payday loan in Houston TX can only rollover that loan three times. This is one of the biggest changes when compared to how the lending framework used to be. When someone takes out a payday loan now they must pay off the loan within a specific time period. Interestingly, there is no documentation on whether this has been successful or not. We have no idea what happens when a consumer can not make the necessary loan payments in time in order to avoid the rollover limit. Are the payday loans from these consumers sent to collections? Are they now hounded by bill collectors when they previously would have had more time to pay off the loan? We have no idea. The real implications of these changes will only appear over the next few years. There are definitely people that can’t pay their payday loans. This factors in both online payday loans as well as companies in the greater Houston area. We also wonder whether people are actually reporting when issues like this happen. Common sense tells us that Houston residents would rather not report payday loan problems like this.
Are Houston payday loan changes here to stay?
Another byproduct of these new restrictions is that payday loan documentation needs to be written better so the average consumer can understand it. In our estimation, this can only be a benefit. We’ve all viewed contracts and just been overwhelmed when confronted with the amount of legal jargon and otherwise unnecessary legal language. One thing we have seen is there are more complaints being brought forward with these new changes. Much like the payday loan changes in other cities in Texas, there are now more people in Houston that are voicing their concerns with online payday loans. Not all these concerns are what you would expect, though. Many people are now complaining that they no longer have access to the funds they need so much. Whereas a resident of Houston used to have access to many different types of short term loans, they are now forced to find other options. Many Houston residents are now going to other parts of the state in search of lenders that don’t deal with the same types of regulations. Other people are just taking out smaller payday loans Houston. We’ve already seen these changes take place in many cities in Texas, such as Dallas and San Antonio. While we have more information on the results of changes in those cities we just don’t have enough data to show anything specific regarding changes for payday loans Houston. It will probably be best to wait another year or so in order to better evaluate the changes that have occurred with Houston Texas payday loans. One interesting addition to these proposed regulations is that payday loans or installment loans taken out in Texas can only have 3 rollovers. This means a Texas resident can’t keep paying on a specific loan. This is only a good thing and there stands to be less problems in the industry with these changes in place. Hopefully, we will see more common sense changes come into play regarding Houston payday loans.