Chattanooga City Council calls for lower interest rates from payday lenders, moves to to outlaw scooters

Councilwoman Demetrus Coonrod speaks during a Chattanooga City Council meeting Tuesday, July 30, 2019 in Chattanooga, Tennessee. / Staff photo by Erin O. Smith

The Chattanooga City Council swiftly and unanimously approved a resolution Tuesday night, joining Shelby County in a call for the state to lower maximum interest rates on payday loans.

In an effort to ease the financial burden on citizens who take out payday loans, often referred to as predatory loans, District 9 Councilwoman Demetrus Coonrod introduced a resolution asking her colleagues to call for the state to lower the maximum allowed interest rates.

"This council, after careful consideration, hereby requests the Hamilton County legislative delegation and members of the Tennessee General Assembly enact legislation amending Tennessee Code Annotated, Title 45, Chapter 15, in order to lower the current rates of up to two (2%) percent per month in interest and renewal charges that title pledge lenders are entitled to charge Tennessee consumers," the resolution reads.

Currently, under state law, traditional banks are restricted to 10-11% rates on consumer loans, but title pledge lenders, which are more popular in urban areas like Memphis and Chattanooga than other parts of the state, are allowed to charge annual percentage rates up to 300%.

In the resolution, the city council, which has no jurisdiction over interest rates, calls for state lawmakers to lower the max to benefit the already financially vulnerable clients who seek payday loans.

While the council did not discuss the resolution Tuesday before voting to approve it, the action garnered praise from Mayor Andy Berke, who tweeted his gratitude to Coonrod and co-sponsor District 6 Councilwoman Carol Berz.

photo Councilwoman Carol Berz speaks about the Business Improvement District during a Chattanooga City Council meeting Tuesday, July 30, 2019, in Chattanooga, Tennessee. / Staff photo by Erin O. Smith

"Outrageously high payday lending rates keep too many people in our community trapped in cycles of debt and dependence. Unfortunately, at the local level, we are legally prohibited from properly regulating the interest these business can charge," Berke wrote moments after the vote. "Tonight, Councilwoman Demetrus Coonrod and Councilwoman Carol Berz led their colleagues on the @CouncilChatt in asking the legislature to lift this senseless and harmful law - one of many steps we need to take to help our citizens enjoy real economic mobility & self-sufficiency."

The resolution is the most recent of the city's efforts over recent years to restrict predatory lending in Chattanooga.

READ MORE: Chattanooga seeks to limit payday lending and title pawns

In another unanimous and discussion-less decision, the council voted to approve District 3 Councilman Ken Smith's ordinance to extend an expired moratorium on commercial dockless electric scooters in the city.

While the council didn't address the vote, resident Mike Morrison spoke for the second consecutive week, asking the council to consider the scooters as an alternative mode of transportation for city residents.

"I don't want to repeat myself, and what I said last week with regard to denying transportation choices to our downtown citizens, I'd like to move on to some additional information," he said, questioning that the council had done any additional research since the original six-month moratorium was passed in the summer of 2019. "To the best of my knowledge, there's no data that has been gained since this last moratorium ... the truth of the matter is they have not been tried in Chattanooga and we have no idea what success or failure they will have in the city."

Morrison asked the council to consider approving the scooters on a probationary level before deciding to go forward with any more permanent ban.

The council will cast its final vote on the ordinance next week.

Contact Sarah Grace Taylor at or 423-757-6416. Follow her on Twitter @sarahgtaylor.