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AmendedbyOrdinanceNo.201407003/04/14JR
s;llegallour documentslordinances113\credit access businesses.doc
ORDINANCE NO. 2013-073
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, REQUIRING REGISTRATION OF
CREDIT ACCESS BUSINESSES; DEFINING TERMS; ESTABLISHING A REGISTR.ATION
FEE; IMPOSING RESTRICTIONS ON EXTENSIONS OF CONSUMER CREDIT MADE BY
CREDIT ACCESS BUSINESSES; PROVIDING RECORDKEEPING REQUIREMENTS;
PROVIDING DEFENSES; PROVIDING A PENALTY NOT TO EXCEED $500; PROVIDING
A SAVING5 CLAUSE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN
EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
Credit Access Businesses
SECTION l. Purpose of Ordinance.
The purpose of this ordinance is to protect the welfare of the citizens of the city of
Denton by monitoring credit access businesses in an effort to reduce abusive and predatory
lending practices. To this end, this ordinance establishes a registration program for credit access
businesses, and imposes recordkeeping requirements on credit access businesses.
SECTION 2. Definitions.
In this ordinance:
1) Certi�cate of Registration means a certificate of registration issued by the director
under this ordinance to the owner or operator of a credit access business.
2) Consumer means an individual who is solicited to purchase or who purchases the
services of a credit access business.
3) Credit Access Business has the meaning given that term in Section 393.601 of the
Texas Finance Code, as amended.
4) Deferred Presentment Transaction has the meaning given that term in Section
393.601 of the Texas Finance Code, as amended.
5) Director means the director of the department designated by the City Manager to
enforce and administer this ordinance and includes any representatives, agents, or
department employees designated by the director.
6) Extension of Consumer Credit has the meaning given that term in Section 393.001
of the Texas Finance Code, as amended.
7) Motor Vehicle Title Loan has the meaning given that term in Section 393.601 of the
Texas Finance Code, as amended.
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8) Person means any individual, corporation, organization, partnership, association,
financial institution, or any other legal entity.
9) Registrant means a person issued a certificate of registration for a credit access
business under this ordinance and includes all owners and operators of the credit
access business identified in the registration application filed under this ordinance.
10) State License means a license to operate a credit access business issued by the Texas
Consumer Credit Commissioner under Chapter 393, Subchapter G of the Texas
Finance Code, as amended.
SECTION 3. Violations; Penalty.
a) A person who knowingly violates a provision of this ordinance, or who fails to
perform an act required of the person by this ordinance, commits an offense. A person commits
a separate offense each day or portion of a day during which a violation is committed,
permitted, or continued.
b) An offense under this ordinance is punishable by a fine of not more than $500.
c) The penalties provided for in Subsection (b) are in addition to any other enforcement
remedies that the city may have under city ordinances and state law.
SECTION 4. Defense.
It is a defense to prosecution under this ordinance that at the time of the alleged offense
the person was not required to be licensed by the state as a credit access business under Chapter
393, Subchapter G of the Texas Finance Code, as amended.
SECTION 5. Registration Required.
A person commits an offense if the person acts, operates, or conducts business as a credit
access business without a valid certificate of registration. A certificate of registration is required
for each physically separate credit access business.
SECTION 6. Registration Application.
a) To obtain a certificate of registration for a credit access business, 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 credit access business.
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3) The names, street addresses, mailing addresses, and telephone numbers of all
owners of the credit access business and other persons with a financial interest in the credit
access business, and the nature and extent of each person's interest in the credit access business.
4) A copy of a current, valid state license held by the credit access business.
5) A copy of a current, valid certificate of occupancy showing that the credit access
business is in compliance with the Denton Development Code.
6) A non-refundable application fee of $50.
b) An application 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.
SECTION 7. Issuance and Display of Certificate of Registration; Presentment Upon
Request.
a) The director shall issue to the applicant a certificate of registration upon receiving
a completed application pursuant to Section 6 hereof.
b) A certificate of registration issued under this section must be conspicuously
displayed to the public in the credit access business. The certificate of registration must be
presented upon request to the director or any peace ofFicer for examination.
SECTION 8. Expiration and Renewal of Certi�cate of Registration.
a) A certificate of registration expires on the earlier of:
1) one year after date of issuance; or
2) the date of expiration, revocation, or other termination of the registrant's state
license.
b) A certificate of registration may be renewed by making application in accordance
with Section 6. A registrant shall apply for renewal at least 30 days before the expiration of the
registration.
SECTION 9. Nontransferability.
A certificate of registration for a credit access business is not transferable.
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SECTION 10. Maintenance of Records.
a) A credit access business shall maintain a complete set of records of all extensions
of consumer credit made by the credit access business, which must include the following
information:
1) The name and address of the consumer.
2) The principal amount of cash actually advanced.
3) The documentation used to establish a consumer's income under Section 11.
b) A credit access business shall maintain a copy of each written agreement between
the credit access business and a consumer evidencing an extension of consumer credit (including,
but not limited to, any refinancing or renewal granted to the consumer).
c) A credit access business shall maintain copies 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 credit access business 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 credit access business.
SECTION 11. Restrictions on Extensions of Consumer Credit.
a) The cash advanced under an extension of consumer credit that a credit access
business 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 credit access
business 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 credit access business shall use a paychecic or other documentation establishing
income to determine a consumer's income.
d) An extension of consumer credit that a credit access business 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
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extension of consumer credit that provides for repayment in installments may not be refinanced
or renewed.
e) An extension of consumer credit that a credit access business 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.
fl 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.
SECTION 12, This ordinance shall become effective twenty-one (21) days from the date
of its passage and approval.
PASSED AND APPROVED this the /�t� day of "� , 2413.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
�
BY: ,