Last year, the City of Austin, Tex., passed a law that restricted the geographic territory in which payday lenders could operate, and limited the amount a lender could provide to each individual borrower.
At least two of the area’s lenders are not happy with the results. TitleMax, a car title loan firm, and Rubicon Equity Partners, a payday lender, have since sued city government on the grounds that the law will put them out of business, the Austin Statesman reports.
“Rubicon believes that it has constitutional and statutory rights relating to the ability of the city to regulate loans that are offered by a credit access business, and we fully intend to pursue this case,” said Gardere Wynne Sewell’s Steven Camp in an interview with the Statesman. Gardere Wynne is representing Rubicon in the case.
As for the city’s response: “We are fully prepared to defend the lawsuits and remain confident that the ordinance is legally sound,” an official statement declared.