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Bill Would Limit Flex Loan Business Locations

Posted at 5:36 PM, Jan 05, 2016
and last updated 2016-01-05 18:41:04-05

Metro councilman Jeff Syracuse has introduced a bill that he said will close a loophole in a 2014 law regulating cash advance businesses.

The existing law said any new cash advance business in Nashville has to build at least a quarter mile from an existing one.

But councilman Jeff Syracuse said nationwide, those quick-loan businesses have been trying to skirt regulations like the one in Nashville by offering a different product called a flex loan.

But Syracuse said a flex loan is essentially the same thing as a title loan or cash advance, and his legislation will add that term to the law already on the books.

“A flex loan is a new product that the same fundamental industry has created,” said Syracuse.  “It’s more of a line of credit than an actual loan, but at the end of the day, it’s still a high interest rate alternative financial service product.”

While cash advance businesses have argued they offer a quick way to get cash for surprise expenses, critics like Syracuse said the high interest rates they charge can get people further into debt.