Lawmakers Try Again to Regulate Predatory Lending
Wednesday, May 11, 2011
AUSTIN, Texas - The state House is expected to consider two 11th-hour bills today - and maybe a third bill Thursday - to regulate the short-term lending industry.
Thanks to a regulatory loophole, short-term lenders love doing business in Texas. The industry reportedly earns 61 percent of its profits here because this is the only state that doesn't provide oversight. For years, lawmakers have been hearing horror stories about poor families drowning in cycles of debt because of unrelenting fees and interest on payday and auto-title loans. Now the House is on the brink of closing the loophole which exempts the companies from oversight because they're classified as businesses that help people repair credit.
The House will have to move this week or the legislation will die, as it has in past sessions.
Tim Morstad, AARP of Texas associate state director, says the package of bills is a good first step toward holding the industry accountable.
"A very strong lobby presence has been put forth by these lenders to preserve the status quo, and what we're hoping is that the voice of people across Texas will outweigh the influence of this industry."
Industry advocates say they provide a valuable service, and only a small percentage of customers lose control of their debt.
Morstad says regulation is needed not only to make sure loans are affordable, but also to force lenders to be more upfront about what customers are getting themselves into. One in five payday borrowers is age 50 or older, he says. . With short-term lending prospering in Texas, he says, problems will only get worse until lawmakers act.
"We're concerned that, because there's no licensing - no oversight - here in Texas, lenders are going to close shops in other states and just move them all here to Texas because there's no limit to what the lenders can charge here in our state."
A Senate measure that would have capped interest and fees did not survive the session. Two of the weaker House bills are expected to come to the floor today, and consumer advocates hope a tougher third bill, which the industry does not support, will still be taken up by Thursday, the last day legislation can be considered.
The House bills are are HB 2592, HB 2593 and HB 2594.
get more stories like this via email
LITTLE ROCK, Ark. - Arkansans ages 16 to 26 who are or have been in the foster-care system now are eligible for one-time payments of at least $750…
HARRISBURG, Pa. - U.S. Sen. Bob Casey, D-Pa., wants to bring back the Civilian Conservation Corps, a public-works program from the 1930s that created …
Health and Wellness
CHICAGO - Overdose deaths in Illinois rose by more than a quarter from 2019 to 2020, and medical experts are warning that pills not prescribed by a …
Health and Wellness
MINNEAPOLIS - As COVID cases trend upward again, public-health experts are setting the record straight on certain storylines about new infections…
APPLETON, Wis. - The pandemic paused many facets of life, and a new report says wellness checkups for children were among them. With school resuming …
ALBANY, N.Y. - A ballot measure could give New York residents the constitutional right to a healthy environment, and on Tuesday a group of state …
SALEM, Ore. - Young people of color are locked up at disproportionately high rates compared with their white peers, despite recent signs the gap is …
HELENA, Mont. - A Montana campaign is renewing its efforts to help identify developmental delays in young children. The Centers for Disease Control …