Chapter 20. Businesses

(a) This article may be known and cited as "Credit Access Businesses Regulation."

(b) The purpose of this article is to protect the welfare of the citizens of the City of Baytown by monitoring credit access businesses in an effort to reduce abusive and predatory lending practices. To this end, this article establishes a registration program for credit access businesses, imposes restrictions on extensions of consumer credit made by credit access businesses, and imposes recordkeeping requirements on credit access businesses.

(Ord. No. 12,550, § 2, 5-22-14)

The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

Certificate of registration means a certificate of registration issued by the director under this article to the owner or operator of a credit access business.

Consumer means an individual who is solicited to purchase or who purchases the services of a credit access business.

Consumer's language of preference is the language the consumer understands best.

Credit access business has the meaning given that term in V.T.C.A., Finance Code § 393.601.

Deferred presentment transaction has the meaning given that term in V.T.C.A., Finance Code § 393.601.

Director means 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 chapter.

Extension of consumer credit has the meaning given that term in V.T.C.A., Finance Code § 393.001.

Motor vehicle title loan has the meaning given that term in V.T.C.A., Finance Code § 393.601.

Registrant means a person issued a certificate of registration for a credit access business under this chapter and includes all owners and operators of the credit access business identified in the registration application filed under this article.

State license means a license to operate a credit access business issued by the Texas Consumer Credit Commissioner under V.T.C.A., Finance Code ch. 393, subch. G.

(Ord. No. 12,550, § 2, 5-22-14)

(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) An offense under this article is punishable by a fine of not more than $500.00 per day in accordance with section 1-14 of the Code.

(c) A culpable mental state is not required for the commission of an offense under this article and need not be proved.

(d) The penalties provided for in subsection (b) are in addition to any other remedies that the city may have under city ordinances and state law.

(Ord. No. 12,550, § 2, 5-22-14)

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 as a credit access business under V.T.C.A., Finance Code ch. 393, subch. G.

(Ord. No. 12,550, § 2, 5-22-14)

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.

(Ord. No. 12,550, § 2, 5-22-14)

(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.

(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 pursuant to V.T.C.A., Finance Code ch. 393, subch. G.

(5) A copy of a current, valid certificate of occupancy showing that the credit access business is in compliance with the code.

(6) A non-refundable application fee in the amount of $50.00.

(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.

(Ord. No. 12,550, § 2, 5-22-14)

(a) The director shall issue to the applicant a certificate of registration upon receiving a completed application under section 20-26.

(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.

(Ord. No. 12,550, § 2, 5-22-14)

(a) A certificate of registration expires on the earlier 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 20-26. A registrant shall apply for renewal at least 30 days before the expiration of the registration.

(Ord. No. 12,550, § 2, 5-22-14)

A certificate of registration for a credit access business is not transferable.

(Ord. No. 12,550, § 2, 5-22-14)

Any lot containing a credit access business establishment shall be located at least 5,000 feet from any lot containing another credit access business establishment, as measured in a straight line between the nearest points of one lot to the other lot.

(Ord. No. 12,550, § 2, 5-22-14)

(a) A credit access business shall maintain a complete set of records of all extensions of consumer credit arranged or obtained 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 length of the extension of consumer credit, including the number of installments and renewals;

(4) The fees charged by the credit access business to arrange or obtain an extension of consumer credit; and

(5) The documentation used to establish a consumer's income under section 20-31 of this article.

(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 a 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 V.T.C.A., Finance Code § 393.627.

(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.

(Ord. No. 12,550, § 2, 5-22-14)

(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) Seventy percent of the retail value of the motor vehicle.

(c) A credit access business shall use a paycheck 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 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.

(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.

(Ord. No. 12,550, § 2, 5-22-14)

(a) Every credit access business 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 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) must be read to the consumer in its entirety, 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 consumer in its entirety, prior to the consumer's signature.

(Ord. No. 12,550, § 2, 5-22-14)

A credit access business shall provide a form, to be prescribed by the director, to each consumer seeking assistance in obtaining an extension of consumer credit which references non-profit 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 subsections 20-30(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.

(Ord. No. 12,550, § 2, 5-22-14)