Payday loan news

If you live in Texas, you will be interested in recent legislation submitted by Representative Vicki Truitt, R-Keller, and chairwoman of the House Pension, Investments and Financial Services Committee, who this week introduced a package of legislation reported by the Star-Telegram. The legislation would require lenders to register with the Consumer Credit Commissioner, which could deny an application based on criminal record, as well as require lenders to file annual reports. Her main goal is to punish and eliminate unethical lenders.
While many legislators seek to eliminate or strictly limit the pay day loan industry, Rep. Truitt aims to bring moderation to preserve the industry, while also mitigating risk for greater emergence of offenders who seek to take advantage of borrowers. The legislation would put pay day and car title lenders under the authority of the Office of Consumer Credit Commissioner. Her compromise effort might be tough to pass due to recent attempts and subsequent failures in previous legislative sessions, but she is working hard to negotiate with industry representatives and consumer advocates to find a middle ground.

Two other Senators have also recently stepped forward with legislation to regulate the industry. Senators Wendy Davis, D- Forth Worth, and Royce West, D-Dallas have put forth legislation they say will close an existing loophole that allows pay day lenders to bypass traditional restraints that govern other lenders, with the intention to curtail exorbitant charges that can reach annual interest rates and fees of over 500 percent.

While there is a coalition of backers to the aforementioned legislation that includes support from a variety of organizations, the Consumer Service Alliance of Texas, which is connected to lenders that operate pawnshops throughout Texas, opposes the bill. Lenders have insisted that if regulation is too strict, they will be forced to leave the state, which Rep. Truitt points out will only bring increased corrupt actors to fill in the need for pay day loans and other similar services. For this reason, she is seeking a middle ground to unite both sides, as well as enforce new regulation that would benefit and protect the consumer.

For more information on the bill introduced by Rep. Truitt and to track its stages, you can find updates here.

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