Author Archives: Lindsay Ochoa

About Lindsay Ochoa

Lindsay is a 2nd year Master of Public Affairs candidate at The LBJ School of Public Affairs. She graduated from Texas A&M University with a double-major in Political Science and English Literature in 2011. Lindsay is interning at Texas Appleseed, a non-profit advocacy law center in Austin. This summer, she will be working on various projects surrounding the school-to-prison pipeline, concentrating on school discipline policies and the impacts they have on students across the state.

Payday and Auto Title Loans: The Cycle of Debt, City Ordinances, & Loopholes

Since my last entry, things have kind of slowed down a bit in the School-to-Prison Pipeline area of work at Texas Appleseed so I’ve been helping out on the Payday and Auto Title Loan project. Texas Appleseed is a member of the Texas Fair Lending Alliance along with 70 other organizations that are all working to develop and implement meaningful reform that will end the cycle of debt caused by these types of loans.

Before working on this project, I always drove by these types of businesses, but never knew how they operate. I even lived right across the street from one when I first moved the Austin and was still oblivious to their practices. Payday and Auto Title Loan places are popping up all over Texas and there are about 200 storefronts in the Austin area alone, and around 3,300 in the state.

Payday Loan: a small cash advance with a two-week loan term that carries interest and fees

Auto Title Loan: loan with a typical one-month term that uses car title as collateral and carries interest and fees. If the borrower defaults, the loan company can take the car

These loans are pretty easy to get and they’re quick so they seem appealing, but the majority of these loans carry huge usurious rates, approximately 500%-1,000% APR and also come with excessive fees. It creates a cycle of debt because borrowers are often only able to pay off the high fees month after month, making the minimum payment without ever paying down the principle. Sometimes borrowers even have to take out another loan to pay off the first loan.

The City of Austin implemented a city ordinance in an attempt to end the cycle of debt by requiring the following:

  1. Limit loan size – Payday loans limited  limited to 20% of borrower’s gross monthly income and Auto Title loans limited  to less than 3% of the borrower’s gross annual income or 70% of the vehicles value
  2. Limit the number of installments to 4 and rollovers to 3
  3. Proceeds from each installment or renewal must reduce loan principal by 25%
  4. Register with the city

The past few weeks, I’ve been visiting Payday and Auto Title Loan places throughout Austin to see if they are following the ordinance. I’ve been to about 25 stores myself, and it’s been really eye opening. I have been surprised with the number of customers that visit these stores. At one place, I even had to wait 40 minutes to speak to a worker because they were so crowded at the time!

A lot of the places that I’ve visited have found a way to get around the ordinance by sending borrowers to their other storefronts outside the city limits to make their payments, and they have been very open about it. One woman even told us: “They found a loophole.” Others have openly acknowledged the fact that they are required to follow the ordinance now and explain how it has changed their loan practices (i.e. “we can’t loan you as much as we used to be able to” and/or “you don’t have as long to pay the loan back”).

There have also been several places that openly encourage you to take out the max amount that you’re able to, even if you don’t need to borrow that much money. Some also explain that you can keep the loan out as long as you want, provided you make the minimum payment, which is just the interest and fees. I can definitely see how people are easily trapped in this cycle of debt after visiting a number of businesses.

Other places though, are following the ordinance , and we even stumbled upon a few that are very upfront and encourage people to pay the loans off as soon as they can, urge them to take only the amount they need, and explain honestly that the loan can become extremely hard to pay back over time. So there have been some bright spots in my visits.

I think that it’s an issue that everyone needs to be aware of. As a student, I could easily see myself unknowingly getting involved and taking out one of these loans and being hit with the reality of it later down the road. Overall, this is not something I expected to work on this summer, but it’s been extremely revealing. It is an issue that I will continue to follow and remain interested in after I leave Texas Appleseed this summer and I’m grateful that I’ve been exposed to it.

Texas Appleseed Intern and Movie-Maker Extraordinaire

Dallas County Truancy Court Update: Since my previous blog entry wherein I discussed the media coverage of Texas Appleseed’s complaint to the Department of Justice regarding the truancy courts in Dallas County, there has some feedback from the school districts:

“Dallas County constables this summer will stop making truancy-related arrests of students at school while officials develop proposed changes to a court system targeted in a complaint to the U.S. Justice Department.”

You can read more about the response from Dallas County and Judge Clay Jenkins who oversees the truancy court here:

Youth Rights Video Project: Since then, I’ve been hard at work on my summer-long project. Another intern and I have been working on creating a video project! It’s not something that I thought I would be working on this summer, but I’m happy that I am involved in something that lets me be creative and do something different. So, Texas RioGrande Legal Aid (TRLA) has various guidebooks that are designed for students that have been ticketed at school with the goal of informing kids about the rights that are available to them and how to proceed once ticketed. The guidebooks are very informative and the English and Spanish versions can be found here:

Texas Appleseed plans to work alongside TRLA and other organizations to create short videos that convey the information in these guidebooks. The videos are going to focus on the following offenses: Failure to Attend School (FTAS), Disorderly Conduct, and Assault because they seem to be the most common misdemeanors.  My job over the past week has been to implement the recent changes made during the legislative session into these booklets to incorporate minor differences in the new laws. In addition, we have been brainstorming creative ideas for the videos in hopes of making them appealing to teens (harder said than done :)) but I think we have some good ideas that will hopefully develop into a successful video! For the rest of the summer, I will be working on developing a script, finding actors, coming up with ideas, and maybe, if there is time, we will eventually begin work on these videos. It’s a pretty cool project and I’m very excited to be a part of it.

Happy Hour: A few weeks ago, all the Texas Appleseed interns cut loose and went to the 2013 Annual Public Interest Happy Hour. There were a bunch of other organizations’ interns in attendance, including: Texas RioGrand Legal Aid, ACLU, Disability Rights, American Gateways, Worker’s Defense Project, and many more.  It was a lot of fun and it was cool to meet other interns from a variety of organizations and talk about our common interests. Here’s a pic of me and some of the girls that I am working with this summer at the Happy Hour:



Texas Appleseed Interns

Truancy Courts in Dallas County

I am doing my summer internship at Texas Appleseed in Austin, TX. Texas Appleseed is a non-profit, advocacy law center that works in a lot of areas including: foster care, juvenile justice, school-to-prison pipeline, payday loan reform, and immigration. During my time here, I will be focusing specifically on issues relating to the school-to-prison pipeline.

School-to-Prison Pipeline (in a nutshell): If you are not familiar with the S2P pipeline, basically, it’s a problematic national trend wherein kids are being channeled out of public schools and into the criminal justice system. Children that have learning disabilities, come from low-income households, and/or have troubled histories are being punished and pushed out of public schools instead of receiving the educational and counseling services that they need. This is partly due to “zero-tolerance” policies that criminalize violations of school rules. These policies have also been shown to disproportionality impact minority students.

So, when I arrived at Texas Appleseed almost three weeks ago, everyone was busy working on a complaint to the Department of Justice about truancy ticketing practices in Dallas County. The complaint focuses on four school districts: Dallas ISD, Mesquite ISD, Garland ISD, and Richardson ISD and claims that the court process used in these districts for prosecuting truancy in adult court is unconstitutional. Texas Appleseed, working alongside Disability Rights Texas and the National Center for Youth Law, argue that prosecuting youths in adult court qualifies as cruel and unusual punishment. They also argue that the various attendance policies violate the civil rights of students with disabilities, health issues, and those students whose first language is not English. The complaint tells the stories of seven students who found themselves in the Dallas County courts for truancy violations and the stories are pretty moving.

Since I started, I have been working on this complaint, and it has been an extremely rewarding and eye-opening experience. I’m very excited to continue my work at Texas Appleseed, and I am excited that my first project has been so important, and I’m interested to see what becomes of it! The complaint was officially filed this morning to the Department of Justice and several news sources have also published articles about the complaint.

I’ve included links to the various news articles below: