§ 5-17. Non-depository financial establishments.
(a)
Purpose and intent. It is the purpose and intent of this section to regulate non-depository financial establishments (check cashing, payday advance/loan and car title loan businesses) to promote the health, safety, and general welfare of the citizens of the city, and to establish reasonable and uniform regulations to prevent the concentration of non-depository cash oriented businesses within the city in order to preserve property values, and promote economic development.
(b)
Definitions.
Depository financial institution means a federal or state chartered depository financial institution such as a bank, savings and loan association, or credit union which conducts transactions regarding the custody, deposit, savings, loan, exchange and/or issue of money, the extension of credit, and/or facilitating the transmission of funds.
Non-depository financial establishment means any establishment, entity, business, corporation, or person required to be registered with the Texas Secretary of State as a Credit Services Organization (CSO) under Chapter 393 of the Texas Finance Code that provides one or more of the following services, such as, check cashing businesses, payday advance/loan businesses, or car title loan businesses, as defined in this section or Chapter 393:
(1)
Check cashing business: A CSO establishment that provides check cashing services for an amount of money equal to the face of the check or the amount specified in the written authorization for an electronic transfer of money, less any fee charged for the transaction; or an agreement not to cash a check or execute an electronic transfer of money for specified period of time in exchange for a cash advance for a fee; or the cashing of checks, warrants, drafts, money orders, or other commercial paper for compensation by any person or entity for a fee.
(2)
Payday advance/loan business: A CSO establishment that makes payday cash advances, payroll cash advances, short-term cash loans, instant loans, or other short-term money loan services and/or similar services for a specified fee, usually secured by a postdated check or authorization to make an electronic debit against an existing financial account, where the check or debit is held for an agreed-upon term, or until a customer's next payday, and then cashed unless the customer repays the loan to reclaim such person's check. Such establishments may charge a flat fee or other service charge and/or a fee or interest rate based on the size of the loan amount. Loan extensions, pay back deadline extensions (often termed rollovers) may be granted subject to additional fees or charges.
(3)
Car title loan business: A CSO establishment that makes small or short term consumer loans that leverage the equity value of a motor vehicle, boat, or other recreational vehicle as collateral where the title to such vehicle is owned free and clear by the loan applicant and any existing liens on the car or vehicle cancel the application. Failure to repay the loan or make interest payments to extend the loan allows the lender to take possession of the vehicle.
Exceptions: Convenience stores, gasoline stations, super markets, grocery stores or other retail establishments where consumer retail sales constitute at least 75 percent of the gross revenue generated on site.
(c)
Regulations.
(1)
No new non-depository financial establishment shall be located within 1,000 feet of another non-depository financial establishment, as measured in a direct line from property line to property line.
(2)
No new non-depository financial establishment shall be located within 750 feet of any state highway right-of-way (Interstate 20, Spur 557, U.S. Highway 80, State Highway 34, State Highway 205, or F.M. 148) as measured in a direct line from the nearest property line to the right-of-way line.
(3)
No new non-depository financial establishment shall be located within 500 feet of a residential property (single-family, townhouse or multifamily) as measured in a direct line from property line to property line.
(4)
A non-depository financial establishment that does not conform to these standards and that existed lawfully prior to the date of adoption of this section shall be deemed a nonconforming use as defined and regulated in the Zoning Ordinance.
(5)
If a non-depository financial establishment ceases operations at a particular location for more than 30 consecutive days, a new certificate of occupancy shall not be issued for the continuation of a non-depository financial establishment at that location without first complying with all of the requirements herein as well as with other requirements set forth in the Zoning Ordinance.
(6)
Notwithstanding the regulations of the Zoning Ordinance regarding nonconforming uses the right to continue a nonconforming non-depository financial establishment at a particular location shall cease and such use shall terminate whenever any of the following occur:
i.
A new certificate of occupancy for change of owner, occupant, tenant, or business is required.
ii.
Revocation, suspension, termination, denial or expiration of the valid state CSO registration of a nonconforming non-depository financial establishment.
iii.
The certificate of occupancy for the use is relinquished, abandoned, canceled, revoked, or terminated in accordance with other applicable codes or ordinances.
iv.
The use or the structure housing the use is altered, remodeled, expanded, or otherwise improved that increases the square footage of the use or increases its level of nonconformity.
v.
Under a plan determined by the zoning board of adjustment whereby the full value of the use can be amortized. It shall be a rebuttable assumption that the value of the owner's investment in the use has been fully recovered within the time of the owner's lease term, if any.
(7)
Pawn shops, which are regulated under other state and local codes and ordinances, are excluded from this section and are hereby prohibited from offering any non-depository financial or CSO services.
(d)
Registration.
(1)
It shall be unlawful for any person to own or operate a non-depository financial establishment in the city that does not have a current valid registration with the Texas Secretary of State as a Credit Service Organization (CSO) in accordance with Chapter 393 of the Texas Finance Code as required by state law.
(2)
The owner/operator of a non-depository financial establishment shall provide proof of state CSO registration prior to obtaining a certificate of occupancy and within ten business days of their annual registration renewal.
(3)
Failure to provide the required proof of valid state CSO registration shall result in the revocation or denial of the certificate of occupancy.
(4)
Revocation, suspension, termination, denial or expiration of the valid state CSO registration shall result in the suspension of the current certificate of occupancy which shall not be re-issued unless and until the business complies with this section in its entirety.
(5)
Any change of ownership of a non-depository financial establishment, including, but not limited to, the sale of the establishment or transfer of any interest therein, after meeting the criteria in subsection (c) above, shall require the purchaser or transferee to update the registration information provided under subsection (2) above and file such information with the city within ten business days of the effective date of the ownership or interest change. Change in ownership or interest in a non-depository financial establishment shall also affect the validity of the certificate of occupancy and shall subject the business to compliance with this section and other applicable state and local codes.
(6)
Current state CSO registration shall be available for inspection upon request by any consumer or city official in accordance with state law.
(Ord. No. 2517, Art. I(5-16), 2-21-12; Ord. No. 2527, Art. I(5-16), 3-20-12)