Texas Payday Loan Bill Strife

Payday loan bill in trouble: TexasA bill to increase regulation in the payday loan sector that started out with overwhelming support from the public and consumer groups is now in question, with critics complaining that the bill has been watered down for the benefit of payday loan providers.

Senator John Carona’s bill was designed to target the excessive fees and sky-high interest rates of these short term lenders, a move much needed in this exploitative and somewhat dubious industry. However, after a series of questionable changes were made to the original bill, many of those who had supported it are now withdrawing that support.

For example, one of the changes that has attracted the ire of consumer advocates and others is the raising of a proposed cap on the size of payday loans. Originally, for anyone with an annual wage under $28,000 the loans were to be capped at 15% of monthly earnings and at 20% for people with higher income. In the bill’s current version, those caps have been raised to 30% for the first group, and to 40% for the higher earners,

That is just one example of the changes made to a bill that was supposed to be about protecting the vulnerable and is starting to look like it is about appeasing the payday loan industry, which is known to make considerable political donations. Senate Bill 1247 may be voted on as early as next week. Full story at the Texas Tribune.

Philip

4 Comments

  1. Those kinds of companies are predators. They need much more regulation. Any politician who comes down on their side of this is obviously in their back pocket!

  2. I hate how they do that. They take a totally reasonable, well intentioned bill, and then load it up with addendum and irrelevant garbage until the end result that actually gets voted in causes more problems than it solves. I with politicians would be more straight forward.

  3. This is yet another reason why I don’t believe in politics anymore. They just do what they want and take advantage of ‘the vulnerable’, and there is nothing we can do about it, is it?

  4. If these companies are making political donations and politicians are voting in favor of the payday loan industry, I think an investigation is needed. If it’s true, then this is corruption, pure and simple. This kind of thing really makes my blood boil.

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