In 2015, Arlington became the first city in Tarrant County to pass an ordinance restricting the influence of payday lenders in the city. Eventually, the city passed a pair of ordinances that restricted where and how lenders operate. 

Five years later, the number of lenders has dropped from 25 to 18 in Arlington. The number of lenders per capita there is also significantly below Fort Worth. 

Now, the Catholic Diocese and Catholic Charities of Fort Worth are urging the new council and mayor to consider further regulating the payday loan industry to catch up with Arlington’s measures. 

“We would hope that all of them (council members) would be willing and interested in taking up a local city ordinance,” Shannon Rosedale, who works on public policy for Catholic Charities Fort Worth, said. 

The difference between the neighboring cities is an ordinance that restricts where payday lenders can establish locations. 

Both Arlington and Fort Worth have an ordinance that:

  • Limits payday loans to 20% of a borrower’s gross monthly income, 
  • Limits repayment terms to four installments that each cover 25% of the principal
  • Forces these businesses to register with the city, maintain loan records for at least three years and
  • Provides a list of nonprofit credit-counseling agencies to customers.

In 2016, Arlington went further by requiring new businesses to stay certain distances from residents, major highways and each other.

District 8 Councilmember Chris Nettles succeeded Kelly Allen Gray, who voted for the ordinance in 2019. Nettles represents many of the communities targeted by payday lenders. He became aware of the problem two years ago when multiple aggressive payday lenders moved into empty storefronts off of Lancaster Avenue.

He said lenders in his district take advantage of borrowers and stamp out positive development in underprivileged areas. The council has the power to change this, he said.

In the coming weeks, the new council member said he would review past ordinances and speak with state representatives to determine how to best address the issue of payday lenders.

The roots of the problem

In Texas, regulation at the local level attempts to make up for a lack of limits at the state level. Texas has the highest interest rates in the country at 664% calculated on a $300 loan, according to the Center for Responsible Lending. 

Historically, Tarrant County has been especially resistant to regulation. Fort Worth-based FirstCash and Cash America, which merged in 2016, operate a large chain of pawnshops across the country and around the world. Both also operated payday lending stores until they retreated in response to state and federal regulations.

FirstCash, Inc. headquarters in Fort Worth. (Cristian ArguetaSoto | Fort Worth Report)

The issue is not equitably distributed. Payday lenders often congregate in poor neighborhoods.

This graphic depicts six zip codes within Fort Worth and the proportion of people in poverty and payday lenders. Data is via the Texas Office of Consumer Credit Commissioner (Rachel Behrndt | Fort Worth Report)

“It takes over an hour on a bus to get to fresh food, but you can walk to a payday lender and auto title,” Rosedale said. “That’s just so sad to put that in there and say, ‘This is the only community support we have for you.’”

More than 70 cities in Texas have possessed ordinances restricting payday lenders. Forty-five used a sample ordinance created by the Texas Municipal League, which has successfully reduced the number of payday lenders in the cities where it was enacted. 

The solution

The Rev. Daniel Kelley was a pastor at St. Joseph Parish in Arlington before recently being moved to St. Jude Catholic Parish in Mansfield. While in Arlington, he advocated for the payday lending ordinance after hearing about the issue from parishioners.  

“They’re getting themselves into something they may not ever get out of,” the Rev. Kelley said. 

To get the ordinance passed, the Rev. Kelley brought the Texas Catholic Conference to Arlington. For the roadshow, experts travel to cities around the state to advocate for these types of ordinances. 

“It wasn’t just people from the parish,” the Rev. Kelley said. “We got people to come and tell their stories about how they lost their car, their jobs and got into so much financial trouble over a small loan they took out.”

Former Arlington Councilmember Shari Capehart strongly advocated for the ordinances. She was concerned with balancing the need to regulate the industry without pushing out the business from town entirely. 

“We were not interested in not having them,” she said. “You don’t want to paint everybody with the same brush.”

Instead, the council crafted an ordinance, using the model ordinance from the Texas Municipal League, to manage the advantage lenders have over borrowers. 

First, Arlington split the broad category of financial institutions to clearly define what are banks, and what are “alternative financial institutions” like payday lenders and car title lenders. 

When the ordinance passed 9-0, Arlington became the first city in Tarrant County to pass restrictions limiting these types of lenders. Fort Worth later followed by passing a weaker version ordinance through a divided vote of 5-3.

The Fort Worth Catholic Diocese applauded the ordinance but said, to be really effective, Fort Worth needs to go further, as Arlington did, to take a stand against lenders who victimize borrowers. 

The diocese is urging Fort Worth to restrict where payday lenders can open, as Arlington did. It also is advocating on the state level to pass a law that covers areas of regulation cities alone can’t touch. 

“We want to see the city really take a stand and advocate at the state level too and ‘enough is enough,’ we have to start addressing this,” Rosedale said. 

At the state level, legislators could prevent payday lenders from charging upwards of 600% in interest on a loan. At the municipal level, cities can only restrict where these lenders are able to move in and the percentage of monthly income they can take from a borrower. 

The state also could limit online borrowing, which is a common way to access payday lenders and is beyond the reach of city ordinances. 

Check N Title Loans is located at 4501 East Lancaster Ave. Suite 109. (Cristian ArguetaSoto | Fort Worth Report)

For all that can’t be done at a local level, Capehart believes what Arlington did was successful.

“We were able to help them get out from under the debt,” the Rev. Kelley said. 

The Fort Worth Diocese said Fort Worth can help people escape debt, too. The Diocese and the Society of St. Vincent de Paul put together money to help relieve people stuck in a similar cycle of debt. 

In other states, bipartisan efforts have resulted in sweeping changes to the industry that tries to strike a balance between regulation and annihilation of the payday lending industry. 

In 2010, Colorado passed a payday loan law that reduced interest rates by two-thirds. As a result, nearly half of the payday lenders in the state closed their doors. Yet, most Coloradans still live within 20 miles of a store and could access the services.

Suggestions for Fort Worth

Faith leaders representing the Fort Worth Diocese and the Rev. Kelley emphasized that the community is essential to successfully advocating for change. 

“It has to be a community-based effort,” Rosedale said.

The Rev. Kelley also emphasized the importance of connecting people to resources. 

“Invite that roadshow from the Texas Catholic Conference. A lot of people came to that workshop we had. Many of them weren’t even Catholic. They weren’t even associated with churches. They just saw the problem and needed to know how to address it.”

Education is a key element advocates identified to resolve this issue long-term, experts say. Financial literacy and access to credits would prevent people from leaning on short-term loans to pay for everyday expenses. 

Both the Fort Worth and Arlington ordinance require alternative financial institutions to provide information on nonprofit credit counseling services. But Rosedale said local nonprofits have a responsibility to go further. She acknowledges that most people cannot budget their way out of poverty. Instead, they need access to credit building services from banks and financial institutions. 

TitleMax provides title loans & title pawns. (Cristian ArguetaSoto | Fort Worth Report)

“We have to be able to help people get access to financial resources to, you know, take that next step in their economic mobility,” Rosedale said. 

Rachel Behrndt is a reporting fellow for the Fort Worth Report. Contact her at or via Twitter.

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Rachel Behrndt is a government accountability reporter for the Fort Worth Report in collaboration with KERA. She is a recent graduate of the University of Missouri where she majored in Journalism and Political...

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