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PROMOTE social and economic justice
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CHAMPION the rights of the poor and marginalized
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PARTNER with pro bono attorneys and other professionals
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FOCUS on policy solutions to major social problems
TEXAS APPLESEED is one of 16 public interest law centers in the Appleseed network in the United States and Mexico City. |
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Pressure On for Texas to Reform Payday, Auto Title Lending
The ink is barely dry on the the nation's new financial reform law creating a Bureau of Consumer Financial Protection to better regulate a wide array of consumer financial services -- including high-cost payday loans. But that does not mean Texas should sit back and wait on Washington to protect its residents from predatory lending.
Some of the largest payday and auto title chains are based in Texas, and they are using a loophole in state law to operate as virtually unregulated "credit service organizations." At 500% APR, the average payday borrower is paying $840 for a $300 loan. How? A fee of $60 or more is charged each month that the loan is  not paid off in full -- and it typically takes most borrowers nine months to pay off these loans. Bexar County and nine Texas cities -- including San Antonio, Midland and El Paso -- have either passed local zoning ordinances to rein in these businesses, or resolutions urging Texas lawmakers to require payday and auto title lenders to comply with the state's consumer lending laws. The Texas Credit Union Commission recently affirmed fair lending standards for credit unions offering small dollar loans. Read more: Small Dollar Lending. Visit: www.stoppaydayabuse.org.
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