El Paso Times: New study shows that Texas payday loans are in some ways nation’s most expensive
April 28, 2014
AUSTIN – As a new national report indicates that Texas payday loans are in some ways the nation’s most expensive, an El Paso lawmaker is vowing to carry on the fight for greater regulation of the industry when the Legislature convenes in January.
Texas does not cap interest rates on payday loans and in other ways has some of the loosest regulations on its payday-loan industry – which has exploded over the past decade. Critics of the industry, including some religious groups, say that it traps poor people in loans they can’t afford to repay and instead rack up fees by rolling the loans over.
A report issued earlier this month by the Pew Charitable Trusts said that even among the states that don’t cap interest rates, Texas has the greatest borrowing expenses. Pew is a non-partisan, non-profit organization that researches payday lending as part of its Small Dollar Loan Project.
Borrowers in the Lone Star State pay $70 in fees for a $300 loan that is paid off in two weeks and $701 on the same loan if it’s rolled over for five months – the period the average borrower has a payday loan over the course of a year, the report said. Read more here.