Bank On Dallas attempting to cut back need for Texas payday loans

Payday lenders are facing a new competitor in Texas. A city-supported system is attempting to undercut their consumer base. The system is named Bank On Dallas. It tries to get traditional banks to spread out up accounts with non-traditional consumers. Payday lending stores might be facing new regulations also. These undefined regulations are being reviewed by the Dallas city council. Source for this article – Bank On Dallas trying to reduce need for Texas payday loans by MoneyBlogNewz.

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 do not have bank accounts. This group of people, called “unbanked,” is a group that often uses check-cashing storefronts. The “Bank On Dallas” initiative is supported by many groups that are also trying to pass new regulations on the paydayloan industry in the Dallas and Irving, Texas, area.

Payday loan limits in Texas being argued

Lawmakers are getting a lot of community groups lobbying them. This is because they want payday loan store regulations made. Dallas officials point out that car title and payday cash advance loan stores are more common in Dallas than Whataburger and McDonald’s stores. Dallas has strict rules on payday lending already. Only “credit service organizationsâ€Â can do it. 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 available to payday lenders. The only problem is that unbanked and underbanked people are different. Unbanked customers often use check cashing locations and other choice banking locations. Underbanked customers, on the other hand, are the ones who tend to use payday lending and other possibilities for short-term cash because most payday lenders require that customers have a account with the 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.

Details from

Dallas City Hall

dallascityhall.com/BankOnDallas/aboutUs.html

Personal Money Store

personalmoneystore.com/payday-lending-statistics/