Dallas Morning News: Texas Senate adds series of regulations to strengthen payday lender bill
April 23, 2013
The full Senate on Monday added a series of stringent regulations to cap and limit payday loans, adding muscle to a once-tepid bill but possibly dooming its legislative success. Texas is one of only 16 states to not cap interest rates charged by payday lenders, whose process can leave some borrowers in an ever-deepening cycle of debt. But bill author Sen. John Carona, R-Dallas, warned that the bill had been delicately balanced to win the backing of the politically powerful, multibillion-dollar industry. “There’s a tilting point where you can make this so tough, it will be killed,” said Carona, referring to the small army of payday lobbyists that sat in the gallery monitoring the debate. “I would suggest that is its future course.”
Even the payday “lite” version of the bill that Carona wanted had a difficult path in the House, where the bill heads next on a 24-6 vote of the Senate. Payday lenders have pointed out that they serve large constituencies that have nowhere else to turn. They said the majority of their loans are repaid quickly and they have many satisfied customers who return for new loans. Carona said the lenders came to the table to negotiate on the bill with consumers because the initial bill pre-empted ordinances in Dallas, El Paso, San Antonio and Austin that capped fees and interest rates. Houston also has a pending ordinance.
By Christy Hoppe