Lawmakers Lend an Ear to Issues Over Loans
Lawmakers from both chambers assembled Friday to lend support to a range of expenses that could
limit the mortgage dimension and variety of payments offered by payday and car title lenders.
They've all submitted charges geared toward regulating payday loans and auto title loan industry.
"We must put this back to the front burner," Ellis added.
Rob Norcross, spokesperson for the Consumer Service Alliance of Texas, spoke to the bill in
opposition. "The way the city ordinances are organized, it could be great for many forms of single-
repayment payday loans," he stated. "Nevertheless, the condition which they split the loan into no
more than four pieces, that is nonetheless going to be too much to pay back for some people."
While advocates of the bills have criticized corporations for what they consider to be predatory
conduct, opponents have expressed hesitation to improve condition engagement that would control
business functions in the state.
Earlier Thursday, House Bill 3047 which may produce a statewide legislation just like city
ordinances already in place over the state were contemplated by the House Panel on Financial and
Investments Services. The proposed legislation allow for only four installments without re financing,
would limit loans to 20 percent of the borrower's annual income and need a 25-percent primary
repayment to be made with each installment. It would likewise create a data bank, managed by the
Consumer Credit Commissioner, lender and borrower info would be collected by that.
"Beneath the current system, [these companies] seem to benefit more from a person 's fiscal
disappointment than from a customer's financial success," said Joe Sanchez, AARP Texas' associate
state director for advocacy, adding that one in five debtors in the state are older than 50.
Such businesses "pass money along to the buyer having an often excessive payment," mentioned J.
Ross Lacy, a city councilman in Midland, testifying before the committee. "This traps buyers right
into a debt cycle they could never recover from."
Midland, in the center of Craddick's district, is one among 22 Tx towns which have passed
ordinances limiting loans given by car and payday title lenders. Lacy stated that five of the 18 credit
access companies went out-of-business after the ordinance went into effect.
"This is a sad day in Texas when the No. 1 express in earnings and job creation is charging the
greatest rates on payday loans," Craddick said. "From 2013 to 2014, Texans have paid $2.9 billion in
fees for these very large-cost loans."
While Norcross was the one man who testified against the bill in the morning program, a few
committee members expressed concerns together with the legislation. State Rep. Giovanni
Capriglione, R-Southlake, named the business of a database to be utilized by personal and state
entities "uncomfortable," while implying that Delicate and the city of Midland were trying to inflict
their particular model to the rest of the state.
"We've observed these products raise the period of service with all the customers that we serve,"
said Katherine von Haefen, senior program manager at the United Way of Greater Houston.
"Unavoidably, these families will have a fiscal emergency and pay day lenders pounce on the
possibility to capture these households."
But from Belton, for Janice Rivera, the terms of the car title loan she and her family took away were
never clarified. "I will be among the people that dropped into the snare," she said, speaking before
On Tuesday, the Senate Committee on Business and Commerce considered Senate Bill 121, by
Western, which may establish revenue-based limitations and loan limits on refinancing. Senate Bill
92 was also contemplated by it, by Ellis, which will be a companion bill to the laws filed by Craddick.
Capriglione included that he resides near an intersection using lots of Star Bucks, but that these
were were not liable for his behaviour. "Easily purchase a $5 cappuccino, that's on me," he said.
"You think they push families into credit money from them?" asked state Rep. Dan Flynn, R-Canton.
"You don't actually think anybody is pouncing on anyone."