Lewisville eyes community loan center concept as pay day loan alternative

By STEVE SOUTHWELL

The Lewisville City Council heard a presentation in workshop session final Monday evening about the proposition for creating a Community Loan Center (CLC). A CLC would form teams employers within the town with a non-profit company to provide lower-interest loans as much as $1,000, repaid via payroll deductions.

The council has looked over regulating the payday financing industry. However when they asked for alternatives before continuing into legislation, Assistant City Manager Claire Swann placed the CLC concept as an option to lending that is payday will never price the town any such thing to get going.

Pay day loans are short-term crisis loans all the way to $1,000 with yearly portion prices which range from 300 to 800 per cent. Customers usually supply the loan providers use of their checking accounts to enable them to be paid back.

Experts of payday financing mention that consumers usually roll throughout the stability to increase the loans by spending just the interest and costs. Borrowers can find yourself trying to repay more compared to initial quantity of the mortgage, and will land in even worse position that is financial. The industry as well as its proponents explain that the loans could be the alternative that is only borrowers with dismal credit, and therefore managing them away from presence can harm those borrowers.

“Before we arrived ahead by having an ordinance to manage payday financing, the council wanted to possess alternatives,” said Swann. Read more