Payday Lending Bills Pass Out of Committee

by ratx103 on 08/04/11 at 1:30 pm

Bills do not address all concerns with payday lenders, but represent improvement from current law.

AUSTIN — On Thursday, April 7th, the House Committee on Pensions, Investments, and Financial Services unanimously approved House Bills 2592, 2593, and 2594, by Rep. Vicki Truitt (R-Southlake). These bills create a system of regulations for payday lenders, who currently are subject to very little state oversight.

At the outset of the legislative session, State Rep. Rafael Anchia (D-Dallas) and State Rep. Marc Veasey (D-Fort Worth), who serve on the committee, had hoped for stronger regulation. Both representatives authored or co-authored bills that would have provided for more restrictions on payday lenders. Those bills would have restricted the lenders’ ability to roll over past due balances into new loans, charge exorbitant interest rates, and saddle consumers with unexpected debt.

“This bill, although not perfect, brings significant new regulation to an industry that, until now, has been free to operate in Texas with very little oversight,” Rep. Anchia said. He added, “Significantly, the Office of the Consumer Credit Commissioner now has the power to move against the bad actors in the industry on behalf of consumers who look to the state for much-needed protection from predatory lenders.”

Despite their preference for stronger legislation, Rep. Anchia and Rep.Veasey voted in favor of the payday lending bills. They feel that the legislation provides as much protection and regulation as possible while ensuring that the bills can obtain the support of the majority of the Legislature. Both representatives believe that the need for regulation of payday lending is too pressing to delay by waiting for more perfect legislation.

“Although I wish that we could pass a bill that would do more to protect consumers, I support this legislation because I believe it is the most we can accomplish this session, and it represents a significant improvement over current law,” Rep. Veasey said.