Item 3: PH on Ordinance Concerning Payday Loan Establishments

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(2) The city manager shall adopt administrative rules pursuant to section 2.019 of this code, which shall include application criteria and a requirement that the payday lender report its fee schedule in the payday application. (3) The city manager shall adopt the annual cost for the license by administrative order pursuant to section 2.020 of this code. 3.554 Payday Loans - Inspection of Records. The city reserves the right to review and/or copy the records of any payday lender for purposes of auditing or complaint resolution. Such records shall be made available for inspection during normal business hours within 24 hours of written notice by the city manager. 3.556 Payday Loans - Payment of Principal Prior to Renewal. A payday lender may not renew a payday loan unless the borrower has paid an amount equal to at least twenty-five percent (25%) of the principal of the original payday loan, plus interest on the remaining balance of the payday loan. The payday lender shall disclose this requirement to the borrower in a minimum of bold 12 point type. 3.558 Payday Loans - Cancellation. (1) A payday lender shall cancel a payday loan without any charge to the borrower if, prior to the close of the business day following the day on which the payday loan originated, the borrower: (a) Informs the payday lender in writing that the borrower wishes to cancel the payday loan and any future payment obligations; and (b) Returns to the payday lender the uncashed check or proceeds given to the borrower by the payday lender or cash in an amount equal to the principal amount of the payday loan. (2) A payday lender shall disclose to each borrower that the right to cancel a payday loan as described in this section is available to the borrower. The payday lender shall disclose this requirement to the borrower in a minimum of bold 12 point type. 3.560 Payday Loans - Payment Plan. (1) A payday lender and a borrower may agree to a payment plan for a payday loan at any time. (2) A payday lender shall disclose to each borrower that a payment plan described in this section is available to the borrower after the maximum amount of renewals allowed by state law. The payday lender shall disclose this requirement to the borrower in a minimum of bold 12 point type. (3) After a payday loan has been renewed to the maximum amount allowed by state law, and prior to default on the payday loan, a payday lender shall allow a borrower to convert the borrower's payday loan into a payment plan. Each payment plan shall be in writing and acknowledged by both the payday lender and the borrower. (4) The payday lender shall not assess any fee, interest charge or other charge to the borrower as a result of converting the payday loan into a payment plan. (5) The payment plan shall provide for the payment of the total of payments due on the payday loan over a period of no fewer than 60 days in three or more payments. The borrower may pay the total of payments due on the payment Ordinance - 2 of 3 L:\CMO\2006 Council Agendas\M060710\S0607103-attA.doc