Bank On Dallas trying to lower dependence on Texas payday loans

Payday loan consumers in Texas are being offered a new option for consumer banking. This is an option supported by the city. Named Bank On Dallas, the program is intending to open traditional banking to brand new consumers. Dallas city council members are also talking about brand new lawful limitations on payday lending stores.

What the Bank on Dallas initiative is all about

Bank On Dallas is a bank and credit union program based upon in the Dallas area of Texas. It tries to encourage banks and credit unions to give “starter” bank accounts to residents of the area who don’t have bank accounts. This group is called the "unbanked" people. Usually, they could be found at check-cashing storefronts getting cash. The groups trying to get new regulations on paycheck loans in Dallas and Irving, Texas, are the ones trying to get the "Bank on Dallas" initiative passed.

Paydayloan limits in Texas argued over

A coalition of community groups are presently lobbying Dallas-area lawmakers for more regulations on payday loans stores. Dallas officials point out that car title and payday loan stores are more common in Dallas than Whataburger and McDonald’s stores. Currently in Dallas, payday lending is limited to “credit service organizations.”. Dallas lawmakers want to limit the interest rates and terms that credit service organizations can use, claiming that they take advantage of their customers.

Underbanked and unbanked differences

The Dallas organizations that are trying to open banking up to unbanked customers are claiming it may also reduce customers accessible to payday lenders. The only problem is that unbanked and underbanked people are different. Unbanked customers often use check cashing locations and other alternative banking locations. Underbanked customers, on the other hand, are the ones who tend to use payday lending and other choices for short-term cash because most payday lenders require that customers have a account with your bank. The new regulations for payday lenders in Dallas have not yet been written, but the City Council is still considering changes to the regulations.

Citations

Dallas City Hall

dallascityhall.com/BankOnDallas/aboutUs.html

Personal Money Store

personalmoneystore.com/payday-lending-statistics/