Senators took the plunge into payday lending rules Monday, approving two bills that bring some oversight to the largely unregulated industry in Texas.
Sen. John Carona, R-Dallas, said the legislation represents a “very, very delicate compromise” between consumer groups and the payday and auto title lending industry.
The legislation by Rep. Vicki Truitt, R-Keller, would require more disclosures by lenders about their fees and force the companies to obtain licenses and report data to a state agency. The first measure passed, 27-3, and the second vote was 28-2.
Sen. Wendy Davis, D-Fort Worth, and Sen. Royce West, D-Dallas, pushed for stronger regulation and a cap on fees. The Truitt proposals don’t cap fees, which can often reach 500 percent.
Those who take out payday loans and cannot pay them off roll them over, incurring even more fees and sometimes falling into a cycle of debt.
“Historically, Texas has taken a hands-off approach to the regulation of this industry,” Davis said in an impassioned speech, urging senators to think of those who get trapped in rolled-over loans. “They’re poor, they’re voiceless and they’re not here in the halls of the Capitol.”
Davis and West said they wanted to add several amendments to the legislation but decided not to in most cases so as not to endanger the bills’ passage. Davis said the bills make “the smallest little advancement” but also include some steps backward.
“If we don’t pass something, we will simply set us back two more years,” Carona said. He said there will be further examination of the industry before the next legislative session in 2013.
Consumer groups like Texas Impact, AARP and the Baptist Christian Life Commission backed the bills, as did the Consumer Service Alliance of Texas, an industry group.
A third bill by Truitt with more stringent restrictions on the lenders didn’t garner industry support and died in the House. The two surviving bills, which were amended in the Senate, now head back to the House for final approval.
The Dallas Morning News reported today that theTexas Legislature is beginning to take action regarding payday lenders. Here are the opening paragraphs of the article:
Senators took the plunge into payday lending rules Monday, approving two bills that bring some oversight to the largely unregulated industry in Texas.
Sen. John Carona, R-Dallas, said the legislation represents a “very, very delicate compromise” between consumer groups and the payday and auto title lending industry.
The legislation by Rep. Vicki Truitt, R-Keller, would require more disclosures by lenders about their fees and force the companies to obtain licenses and report data to a state agency. The first measure passed, 27-3, and the second vote was 28-2.
Sen. Wendy Davis, D-Fort Worth, and Sen. Royce West, D-Dallas, pushed for stronger regulation and a cap on fees. The Truitt proposals don’t cap fees, which can often reach 500 percent.
Those who take out payday loans and cannot pay them off roll them over, incurring even more fees and sometimes falling into a cycle of debt.
“Historically, Texas has taken a hands-off approach to the regulation of this industry,” Davis said in an impassioned speech, urging senators to think of those who get trapped in rolled-over loans. “They’re poor, they’re voiceless and they’re not here in the halls of the Capitol.”
i am thanks to senators he get actions against them..