1. United Way of the
Brazos Valley
Financial Stability Committee Call to Action
Concerning Payday and Auto Title Lending Activities
Alison Prince – Vice President Community Impact

2. Our Mission Statement:
The United Way of the Brazos Valley brings
the community together to find solutions
that change people’s lives by advancing
Education, Financial Stability and Health.
United Way of The Brazos Valley

3. Call to Action Concerning Payday
and Auto Title Lending
The members of the Financial Stability
Committee advocate that the College Station City
Council adopt a Resolution requesting the Texas
State Legislature and the Governor of Texas take
action to stop usurious lending by payday and
auto title lending practices that exploit
economically vulnerable College Station citizens.
United Way of The Brazos Valley

4. Payday and Auto Title Loans
Payday Loans Auto Title Loans
• Small cash-advance • Car Title used as
($100 - $1,500) collateral
• Two-week loan term • One-month loan term
• Interest and Fees applied • Interest and Fees applied
• Unsecured, but require • If borrower defaults,
postdated check or lender can take the car
electronic access to debit
account as collateral
United Way of The Brazos Valley

5. The Cycle of Debt: $500 Loan
Pay $110 Fee
Still Owe Entire
Loan Principal
($500)
Pay $110 Fee
United Way of The Brazos Valley

6. Defective Products
• Cycle of debt:
• High fees are often paid month after month without reducing the
loan amount.
• Usurious rates:
• Average APR of around 500%
• Excessive fees:
• Fees on a $4,000 auto title loan average $1,000 per month.
• The average borrower paid $841.49 for a $471.31 loan in the
first 3 months of the year
United Way of The Brazos Valley

7. Texans Pay More
On average, Texans pay $22 per $100 borrowed.
United Way of The Brazos Valley

8. Doubled Statewide and Locally
More
storefronts
statewide
than
McDonald’s
and
Whataburger’s
combined!
Bryan/College Station locations grew from
7 in 2004 to 13 in 2012
United Way of The Brazos Valley

9. College Station Statistics
January – June 2012 in Bryan/College Station:
• Almost 14,000 payday loan transactions
• Borrowers paid approx. $1.3 million in fees alone
• About 75% of payday borrowers refinanced at least once
• Average # of refinances—2.88 in 3 months
• 101 vehicles repossessed in Bryan/College Station
• Over 17,000 vehicles repossessed statewide
*Data compiled from OCCC Quarterly Data by MSA, 2012
United Way of The Brazos Valley

10. Families are Hurting
• 83% of borrowers struggled to pay loan back when due*;
• 77% said the loans make it harder to cover other bills*;
• On average, borrowers are in debt for 212 days during the 1st year of
a loan;
• Nearly 20% of charitable cash assistance goes to borrowers in trouble
with these loans;
• 76% of borrowers seeking charitable assistance also receive a public
benefit.
*2010 Survey of Texas borrowers.
United Way of The Brazos Valley

11. Local Examples
Single Mom, 5 Children Single Mom, 3 Children
• Lost job – babysitting to • Monthly Income: $1,550
make ends meet • Has a $1,600 auto title loan
• Receives Child Support: • Monthly payment to
~$1,000 continue loan: $370; nearly
• Has 3 outstanding payday 24% of her monthly income
loans totaling: over $3,400
• Monthly payments on
finance charge = $237;
nearly 22% of her monthly
income
Clients of United Way’s Financial Fitness Center
United Way of The Brazos Valley

12. City Resolutions and Ordinances
• Regulatory Ordinances
– Austin, Dallas, and San Antonio
• Zoning Ordinances
– Austin, San Antonio, Greenville, Irving, Little Elm, Mesquite,
Richardson, Sachse
• Resolutions
– Bryan (2012), El Paso, Brownsville, Sachse, Rowlett, Arlington,
Lubbock, Midland, Permian Basin Regional Planning
Commission, Bexar County, Travis County
United Way of The Brazos Valley

13. Call to Action Concerning Payday
and Auto Title Lending
The members of the Financial Stability
Committee advocate that the College Station City
Council adopt a Resolution requesting the Texas
State Legislature and the Governor of Texas take
action to stop usurious lending by payday and
auto title lending practices that exploit
economically vulnerable College Station citizens.
United Way of The Brazos Valley

14. A Resolution from College
Station will:
• Send a strong message to the Texas
Legislature that they need to do
more!
• Affirm the rights of cities to rein in
predatory lending practices by
payday and auto title lenders
United Way of The Brazos Valley