(a) 
This article may be known and cited as “nondepository financial institutions regulation.”
(b) 
The purpose of this article is to protect the welfare of the citizens of the city by monitoring nondepository financial institutions in an effort to reduce abusive and predatory lending practices and concentration and clustering of businesses engaging in such practices. To this end, this article establishes a registration program for nondepository financial institutions, imposes restrictions on extensions of consumer credit made by nondepository financial institutions, imposes recordkeeping requirements on nondepository financial institutions, and imposes restrictions on location of nondepository financial institutions relative to other nondepository financial institutions, zoning districts, uses and transportation corridors.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them, except where the context clearly indicates a different meaning:
Car title loan business.
An establishment that makes small consumer loans that leverage the equity value of a car or other vehicle as collateral where the title to such vehicle is owned free and clear by the loan applicant and any existing liens on the car or vehicle cancel the application. Failure to repay the loan or make interest payments to extend the loan allows the lender to take possession of the car or vehicle.
Certificate of registration.
A certificate of registration issued by the director under this article to the owner or operator of a nondepository financial institution.
Check cashing business.
An establishment that provide some or more of the following:
(1) 
An amount of money that is equal to the face of the check of the amount specified in the written authorization for an electronic transfer of money, less any fee charged for the transaction;
(2) 
An agreement not to cash a check or execute an electronic transfer of money for a specified period of time; or
(3) 
The cashing of checks, warrants, drafts, money orders or other commercial paper for compensation by any person or entity for a fee.
Church.
A church, synagogue, mosque, temple, or building which is used primarily for religious worship and related religious activities.
Consumer.
An individual who is solicited to purchase or who purchases the services of a nondepository financial institutions.
Consumer’s language of preference.
The language the consumer understands best.
Credit access business.
The definition ascribed to that term in section 393.601 of the Texas Finance Code, as amended.
Deferred presentment transaction.
The definition ascribed to that term in section 393.601 of the Texas Finance Code, as amended.
Director.
The director of the department designated by the city council, city manager, or city council or city manager’s designee, to enforce and administer this article.
Extension of consumer credit.
The definition ascribed to that term in section 393.001 of the Texas Finance Code, as amended.
Motor vehicle title loan.
The definition ascribed to that term in section 393.601 of the Texas Finance Code, as amended.
Nondepository financial institution.
Any check cashing business, payday advance/loan business, car title or credit access business including such businesses leasing space within another business to perform such functions, as further defined herein. Nondepository financial institution excludes: a state or federally chartered bank, savings and loan association or credit unit; and a convenience store, supermarket or other retail establishment directly providing such services where consumer retail sales constitute at least 75% of the total gross revenue generated on site.
Payday advance/loan business.
An establishment that makes small consumer loans, usually backed by a postdated check or authorization to make an electronic debit against an existing financial account, where the check or debit is held for an agreed-upon term, or until a customer’s next payday, and then cashed unless the customer repays the loan to reclaim such person’s check; and such establishments may charge a flat fee or other service charge and/or fee or interest rate based on the size of the loan amount.
Person.
Any individual, corporation, organization, partnership, association, financial institution, or any other legal entity.
Registrant.
A person issued a certificate of registration for a nondepository financial institution under this article and includes all owners and operators of the nondepository financial institution identified in the registration application filed under this article.
Residential district.
A residentially zoned district as defined by the zoning ordinance of the city, including multiple-family residential.
Residential use.
A single-family, townhouse, duplex, mobile home, or multiple-family use as defined in the zoning ordinance of the city.
School.
Any public or private educational facility including, but not limited to, child day-care facilities, nursery schools, preschools, kindergartens, elementary schools, private schools, intermediate schools, junior high schools, middle schools, high schools, vocational schools, secondary schools, special education schools, junior colleges and universities. This definition includes any building used for home schools. School includes the entire parcel on which the school facility is located.
State license.
A license to operate a nondepository financial institutions issued by the Texas Consumer Credit Commissioner under chapter 393, subchapter G of the Texas Finance Code.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
A person who violates a provision of this article, or who fails to perform an act required of the person by this article, commits an offense. A person commits a separate offense for each and every violation relating to an extension of consumer credit, and for each day during which a violation is committed, permitted, or continued.
(b) 
A violation of any provision of this article is punishable in accordance with section 1.01.009 of this code.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
It is a defense to prosecution under this article that at the time of the alleged offense the person was not required to be licensed by the state under chapter 393, subchapter G, of the Texas Finance Code.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
A person commits an offense if the person acts, operates, or conducts businesses as a nondepository financial institution without a valid certificate of registration. A certificate of registration is required for each physically separate nondepository financial institutions.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
To obtain a certificate of registration for a nondepository financial institutions, a person must submit an application on a form provided for that purpose to the director. The application must contain the following:
(1) 
The name, street address, mailing address, facsimile number, and telephone number of the applicant.
(2) 
The business or trade name, street address, mailing address, facsimile number, and telephone number of the nondepository financial institutions.
(3) 
The names, street addresses, mailing addresses, and telephone numbers of all owners of the nondepository financial institution, and the nature and extent of each person’s interest in the nondepository financial institution.
(4) 
A copy of a current, valid state license held by the nondepository financial institution pursuant to chapter 393, subchapter G of the Texas Finance Code.
(5) 
A copy of a current, valid certificate of occupancy showing that the nondepository financial institution is in compliance with this code.
(6) 
A nonrefundable application fee for the amount established.
(b) 
An applicant or registrant shall notify the director within 45 days after any material change in the information contained in the application for a certificate of registration, including, but not limited to, any change of address and any change in the status of the state license held by the applicant or registrant.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
The director shall issue to the applicant a certificate of registration upon receiving a completed application under section 8.06.006.
(b) 
A certificate of registration issued under this section must be conspicuously displayed to the public in the nondepository financial institutions. The certificate of registration must be presented upon request to the director or any peace officer for examination.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
A certificate of registration expires on the earliest of:
(1) 
One year after the date of issuance; or
(2) 
The date of revocation, suspension, surrender, expiration without renewal, or other termination of the registrant’s state license.
(b) 
A certificate of registration may be renewed by making application in accordance with section 8.06.006. A registrant shall apply for renewal at least 30 days before the expiration of the registration.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
A certificate of registration for a nondepository financial institutions is not transferable.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
A nondepository financial institution shall maintain a complete set of records of all extensions of consumer credit arranged or obtained by the nondepository financial institution on-site, which must include the following information:
(1) 
The name and address of the consumer;
(2) 
The principal amount of cash actually advanced;
(3) 
The length of the extension of consumer credit, including the number of installments and renewals;
(4) 
The fees charged by the nondepository financial institution to arrange or obtain an extension of consumer credit; and
(5) 
The documentation used to establish a consumer’s income under section 8.06.011.
(6) 
All business records, including but not limited to all documents related to title acquisition and title transfer of vehicle titles to or from any loan, make of vehicle, model of vehicle, vehicle identification number, date of acquisition and date of sale.
(b) 
A nondepository financial institution shall maintain a copy of each written agreement between the nondepository financial institution and a consumer on-site evidencing an extension of a consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer).
(c) 
A nondepository financial institution shall maintain copies on-site of all quarterly reports filed with the Texas Consumer Credit Commissioner under section 393.627 of the Texas Finance Code, as amended.
(d) 
The records required to be maintained by a nondepository financial institution under this section must be retained for at least three years and made available for inspection by the city upon request during the usual and customary business hours of the nondepository financial institution.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
The cash advanced under an extension of consumer credit that a nondepository financial institution obtains for a consumer or assists a consumer in obtaining in the form of a deferred presentment transaction may not exceed 20 percent of the consumer’s gross monthly income.
(b) 
The cash advanced under an extension of consumer credit that a nondepository financial institution obtains for a consumer or assists a consumer in obtaining in the form of a motor vehicle title loan may not exceed the lesser of:
(1) 
Three percent of the consumer’s gross annual income; or
(2) 
70 percent of the retail value of the motor vehicle.
(c) 
A nondepository financial institution shall use a paycheck, bank statement, IRS Form W-2 from the previous tax year, the previous year’s tax return, a signed letter from an employer, or other documentation establishing income to determine a consumer’s income.
(d) 
An extension of consumer credit that a nondepository financial institution obtains for a consumer or assists a consumer in obtaining and that provides for repayment in installments may not be payable in more than four installments. Proceeds from each installment must be used to repay at least 25 percent of the principal amount of the extension of consumer credit. An extension of consumer credit that provides for repayment in installments many not be refinanced or renewed.
(e) 
An extension of consumer credit that a nondepository financial institution obtains for a consumer or assists a consumer in obtaining and that provides for a single lump sum repayment may not be refinanced or renewed more than three times. Proceeds from each refinancing or renewal must be used to repay at least 25 percent of the principal amount of the original extension of consumer credit.
(f) 
For purposes of this section, an extension of consumer credit that is made to a consumer within seven days after a previous extension of consumer credit has been paid by the consumer will constitute a refinancing or renewal.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
Every agreement between the nondepository financial institution and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer), must be written in the consumer’s language of preference. Every nondepository financial institution location must maintain on its premises, to be available for use by consumers, agreements in the English and Spanish languages.
(b) 
For every consumer who cannot read, every agreement between the nondepository financial institution and a consumer evidencing an extension of consumer credit (including, but not limited to, any refinancing or renewal granted to the consumer) must be read to the consumer in its entirety in the consumer’s language of preference, prior to the consumer’s signature.
(c) 
For every consumer who cannot read, every disclosure and notice required by law must be read to the consumers in its entirety in the consumer’s language of preference, prior to the consumer’s signature.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
A nondepository financial institution shall provide a form, to be prescribed by the director, to each consumer seeking assistance in obtaining an extension of consumer credit which references nonprofit agencies that provide financial education and training programs and agencies with cash assistance programs. The form will also contain information regarding extensions of consumer credit, and must include the information required by section 8.06.010(a)(1)–(5) of this article specific to the loan agreement with the consumer. If the director has prescribed a form in the consumer’s language of preference, the form must be provided in the consumer’s language of preference.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
No more than one nondepository financial institution establishment shall be located on a single lot.
(b) 
Any lot containing a nondepository financial institution establishment shall be located at least one thousand feet (1,000') from any lot containing another nondepository financial institution establishment, as measured in a straight line between the nearest points of one lot to the other lot.
(c) 
Any lot containing a nondepository financial institution establishment shall be located at least seven hundred fifty feet (750') from a residential district or residential use, school, church, or public or private park as measured in a straight line between the nearest points of the boundary of the applicable zoning district or property line of the aforementioned uses to the property line of the nondepository financial institution.
(d) 
Any lot containing a nondepository financial institution establishment shall be located at least five hundred feet (500') from the right-of-way of any roadway identified as a highway, parkway or arterial in the city’s transportation master plan, as amended, as measured in a straight line between the nearest points of the right-of-way line to the property line of the nondepository financial institution.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)
(a) 
A nondepository financial institution that does not conform to these standards and that existing lawfully on the date the use commenced shall be deemed a nonconforming use. A nonconforming use may be continued, so long as it does not increase its level of nonconformity as set forth in the city’s unified development code.
(b) 
If a nondepository financial institution ceases operations at a particular location, a new certificate of occupancy shall not be issued for a new nondepository financial institution at that location without first complying with all the requirements of this article.
(c) 
Sale of items used as loan collateral, including but not limited to vehicles taken under ownership of the nondepository financial institution upon loan default and displayed for sale to the public, shall be subject to development and use regulations as established in the city’s unified development code and other applicable development codes, as amended, in addition to the requirements of this article.
(Ordinance 2014-09, sec. 1, adopted 3/18/14)