El Paso drivers will be charged for using two new toll lanes on the Cesar Chavez Border Highway beginning on Friday, January 10. (Alberto Tomas Halpern/Newspaper Tree)
Traffic signs notify drivers of the approaching toll lane. (Alberto Tomas Halpern/Newspaper Tree)
A map and legend describe the limits of the toll lanes and where the entrances and exits are located. (Camino Real Regional Mobility Authority)
Two new automated toll express lanes are set to open on the Cesar Chavez Border Highway at midnight on January 10. Toll road users can pay their tolls by mail or by purchasing a toll tag online through the North Texas Tollway Authority.
But, drivers who want to buy a toll tag with cash have to do so through an NTTA partner: ACE Cash Express, a payday lender.
The toll road, operated by the Camino Real Regional Mobility Authority, is the first of its kind in El Paso and will run along a nine mile stretch of the highway from east of U.S. Highway 54 to west of Zaragoza Road. The CRRMA partnered with the NTTA to provide administrative services, including processing toll tags.
ACE Cash Express’ relationship with NTTA goes back to 2010, when NTTA agreed to allow the payday lender to accept cash for tags, while charging ACE customers an extra $2 to $3 service fee per tag.
The NTTA-ACE contract was approved through a no-bid process and without a vote from the tollway authority board.
“There was no bidding process, because it is a non-exclusive agreement. That is to say, that the NTTA could partner with any additional companies that provide similar services,” Michael Rey, an NTTA spokesman, said in an email to Newspaper Tree.
“ACE Cash Express does not receive any funds directly from the NTTA as part of this agreement. The agreement was presented to the NTTA board for informational purposes. There was no board vote required to enter into the agreement with ACE Cash Express,” Rey continued.
ACE Cash Express senior vice president of public affairs, Eric Norrington, told Newspaper Tree that ACE was introduced to the NTTA in 2009 by Dallas based marketing firm Camelot Communications, however details regarding how the agreement emerged and was finalized remain unclear.
The only NTTA board member with a known relationship to ACE Cash Express is Matrice Ellis-Kirk. Ellis-Kirk, wife of former Dallas Mayor Ron Kirk, served as an ACE Cash Express director from December 2005 to October 2006. She was later appointed to the NTTA board by the Dallas County Commissioners Court in 2011—a year after the NTTA and ACE Cash Express entered into a partnership.
Norrington said in an email to Newspaper Tree that Ellis-Kirk “has not had any involvement or financial interest in ACE” since leaving as a director.
However, a company report compiled by Hoover’s Inc., a subsidiary of Dun and Bradstreet, continues to list Ellis-Kirk as a partner with ACE Cash Express. The report was last updated in October 2013, according to a Hoover’s representative.
Ellis-Kirk did not respond to repeated requests by phone and e-mail from Newspaper Tree for comment about her time as an ACE Cash Express director, and what her relationship is with the payday lender now that she is an NTTA director.
ACE Cash Express CEO, Jay Shipowitz, declined to answer questions when contacted by phone.
Ann Baddour, a senior policy analyst with Texas Appleseed, a social and economic justice group that supports regulating the payday lending industry, described Ellis-Kirk’s relationship with ACE Cash Express as Texas’ way of doing business-as-usual.
“Texas prides itself in being a free market system and when you hear stories like this that are sanctioned by these kinds of bodies, I think it gives one pause and you wonder about what conflicts of interest actually exist and what’s motivating these kinds of deals,” she said.
What is ACE Cash Express?
ACE Cash Express targets “the underbanked and bankless populations” according to the Hoover’s report. The company filed its articles of incorporation with the Texas Secretary of State’s office in 1982 under the name Associates Agency, Inc and started out as a collection agency. The following year, the company changed its name to Neighborhood Cash Express and began offering a check cashing service and selling money orders and travelers checks.
The company became ACE Cash Express in 1987.
In 1992, ACE Cash Express became a public company traded on the NASDAQ exchange; and in 2006, JLL Partners, a private equity firm based in New York City, acquired ACE for $455 million.
According to the Hoover’s report, in 2001, ACE Cash Express “was hit with a raft of lawsuits and two state investigations regarding payday loans and other lending practices.”
Today, ACE Cash Express has about 1,700 company- and franchise-owned stores across the country and employees 4,000 people.
Ellis-Kirk served on ACE Cash Express’ board during the takeover by JLL Partners. And according to documents from the U.S. Securities and Exchange Commission, Ellis-Kirk was granted a stock option as a non-employee director when ACE Cash Express was still a publicly traded company.
“Ms. Ellis-Kirk will also be entitled to the cash compensation payable by ACE to its non-employee directors,” the SEC document says. Non-employee directors’ annual retainer fee was $30,000. Directors were also reimbursed for any expenses incurred by attending board meetings.
Since Ellis-Kirk served as an ACE Cash Express director for less than a year, it remains unclear whether she was ever compensated.
Rey, the NTTA spokesperson, said no current NTTA board members are ACE Cash Express executives. Newspaper Tree filed an open records request this week with the NTTA seeking financial interest and conflict of interest disclosure forms for NTTA directors, executives and employees.
Under the NTTA’s ethics policy, board directors must file an affidavit whenever the NTTA is considering or entering into a contract with a business in which the business “has had an employment or business relationship with the Director or a family member.” The affidavit must be filed only if the director or family member was paid more than $2,500 by the business within the previous year that a contract is being considered.
The policy adds that “[a] Director with a direct or indirect interest in a contract with the NTTA has a per se conflict” and that an apparent conflict of interest exists “when a reasonable person would believe that a Director’s private interest (financial, personal, or otherwise) might cause the Director to perform his or her duties in a way other than they would have been performed if the Director had no such private interest.”
In El Paso, the CRRMA’s bylaws require its board directors to file financial disclosure reports annually with the Texas Ethics Commission.
Payday lenders face “fierce” criticism
Payday lenders came under scrutiny in El Paso at this week’s city council meeting on Tuesday.
City representatives adopted an ordinance set to take effect on January 16 that requires payday lenders to register their businesses with the city, make their records available to the city for inspection and pay a $390 registration fee for each credit business store.
The ordinance caps payday loans at 20 percent of a person’s gross monthly income; and car title loans are capped at three percent of the borrower’s gross annual income or 70 percent of the retail value of their vehicle, whichever figure is smaller. In addition, the ordinance limits installment loans to four installments and does not allow installment-payment loans to be refinanced or renewed. Any violation of the ordinance can result in a fine to the payday lender up to $500 per violation.
Members of El Paso’s state delegation, including senator Jose Rodriguez and representatives Marisa Marquez and Joe Moody, urged council members to adopt the ordinance in a January 6 letter.
“Payday and auto title businesses charge high fees, thereby trapping borrowers in a cycle of debt that consumes their financial reserves and pushes them into further crisis,” the state lawmakers said. They added that in 2012, payday lenders throughout Texas “drained” $1.2 billion through high fee charges and more than 35,000 families lost vehicles to auto title lenders. That same year in El Paso, payday lenders earned $34 million and nearly 800 vehicles were repossessed, the lawmakers said.
The Hoover’s report states that ACE Cash Express faces “fierce” criticism as a payday lender, which includes criticism over high interest rates and service charges. “Further raising the ire of critics, the industry tends to serve more vulnerable populations, including the elderly and the less-educated,” the report continues.
ACE Cash Express operates 21 stores throughout El Paso and according to city records, had at least two lobbyists registered with the city. Daniel Ortiz and James McKnight, attorneys with the San Antonio law firm Brown & Ortiz, both filed notices with the city clerk’s office on July 3, 2012, terminating their representation of ACE Cash Express.
It remains unclear when Ortiz and McKnight registered as lobbyists for ACE Cash Express and which city officials or staff they met with in that capacity.
Alternatives and future plans
Telles, at the CRRMA, explained that El Paso must rely on the support of organizations, such as NTTA, because his organization, which offices out of city hall, does not have the adequate staff to conduct all the administrative functions required to operate toll lanes.
The CRRMA has a staff of one person: Telles. The NTTA, on the other hand, has a staff of hundreds.
Telles said that since the toll lane project is a new operational area for his organization, he and the CRRMA are exploring other administrative options, including dropping ACE Cash Express from the agreement with the NTTA.
“Our relationship with the NTTA would allow us to say we don’t want that cash alternative,” Telles said. But dropping the option for people to buy toll tags in person with cash could negatively impact a number of people.
“We didn’t want to punish people who preferred to use cash. That’s why we felt it important for the NTTA to provide a cash vendor,” said Telles.
Baddour, at Texas Appleseed, said using ACE Cash Express to provide toll tags is concerning and ultimately hurts local residents.
“You shouldn’t be forcing someone to go into a high-cost lending outfit to pay for their toll tag. It just doesn’t make sense,” Baddour said.
Rey, at the NTTA, said the tollway authority’s contract with ACE Cash Express was established to provide a means for toll lane users who don’t have bank accounts to purchase toll tags with cash.
“It’s an economic justice issue. You have to provide for all,” Rey said. “ACE is one of the few companies willing to handle cash and that was the impetus behind it (the agreement).”
The CRRMA has no immediate plans to add staff to handle the administrative functions of tolling or sever its relationship with the NTTA. Long term plans may include partnering with the city of El Paso and the Texas Department of Transportation to create a single toll account. The single account would allow local drivers to access the new toll lanes, the international bridge tolls, parking meters and parking garages.
“That makes sense to me. But those are assets not controlled by the (CRRMA),” Telles said. He added that any agreement could include a deal in which the city continues to operate its various infrastructures, but allows the CRRMA to install tolling systems to create the single user account.
“These are just different scenarios that could come into play. It’s kind of like a blank slate,” he said.
The CRRMA will have a “robust” discussion at their next meeting and possibly take action on whether or not to keep the cash payment function through ACE Cash Express. That meeting will be held at 9 am on January 22 in the city council chambers.
Payday lenders aren’t the only third-party retailers that can accept payments for state and regional agencies, though. The Attorney General’s office, which collects child support payments, collects those funds through Fidelity Express and MoneyGram, companies that provide money orders, wire transfers and processes payments for consumers, retailers and billers.
Child support payments to the Attorney General’s office, which are all processed through the State Disbursement Unit, is contracted through Affiliated Computer Services or ACS. MoneyGram payments can be made at most Albertson’s grocery stores.
Some public institutions, like the Texas Comptroller of Public Accounts, which collects taxes, accepts cash payments at field offices directly and doesn’t use a third-party vendor. Comptroller field offices are located in most major cities throughout Texas, including one in El Paso.
Susie Byrd, a former city representative who supported the payday lending ordinance, said public entities charged with promoting the public good, such as the CRRMA, have no business contracting with payday lenders.
“It’s one of the more harmful things that I’ve heard about recently and hopefully the (CRRMA) will reverse course on that,” Byrd said.
She added that entities other than payday lenders who deal with cash could easily replace ACE Cash Express to offer toll tags in El Paso.
“Chico’s Tacos, for example, they only take cash. I would go buy a toll tag from them,” she said.
UPDATE: Hoover’s Inc. has updated its company profile on ACE Cash Express and removed the following individuals from ACE’s People list: Matrice Ellis-Kirk, Barry Rougeau, J Stotts, Carolyn Naranjo, Bobby Jones, David Johnson, Joe Conner, Todrick Askew and Ken Koreyva. This article was updated on January 16, 2014 at 6:49 pm.
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