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AARP AARP States Advocacy

Don’t let anyone steal your Christmas

by Ollie Besteiro

We all know how the holiday season can stretch family budgets to the limit. Starting before Halloween, consumers are bombarded by commercials selling sparkling jewels, the latest high-tech craze or the newest must-have toy.

It’s no wonder that more and more strapped-for-cash Texans may be tempted to turn to payday and auto title loans as a way to make their loved one’s holiday wish come true.

But that holiday dream may turn into a nightmare. What is being sold to Texans as a “quick fix” to holiday budget crunches is more often the beginning of a never ending cycle of debt.

Payday and auto title lenders offer what seems to be an easy solution. But these lenders regularly charge annual percentage rates (APRs) of 500 percent or more -- draining already floundering Texas families and often pushing them further into debt and financial hardship.

As part of a “Secret Shopper” program, AARP and other members of the Anti-Poverty Coalition recently sent staff and volunteers into payday lending establishments in Dallas to check for ordinance compliance.

While there, two of the secret shoppers got a glimpse of how far some employees will go to get consumers to take out more expensive loans.  One secret shopper and her son visited a payday lending establishment to take out an auto title loan on his older model truck.  The employee suggested she looked “tired” and should instead take out a loan on her more expensive truck to give her some extra spending money to finance a cruise.

This is just one example of the tools of the trade payday lenders use to lure Texans into taking out loans they simply can’t afford.

Where is the state in all of this? In 2011, the Texas Legislature took an initial step towards meaningful reform for the first time in a decade by establishing basic licensing, reporting and regulation.  But they fell short in addressing the cycle of debt these loans create.

Several cities and counties across in Texas followed up – including  Austin, Dallas, El Paso and San Antonio -- took measures into their own hands by enacting ordinances to rein in payday lending and protect their residents.

But Texans deserve protection that extends beyond city boundaries, that’s why AARP supports statewide payday lending reform. Texas will have another crack at statewide reform during the 2015 Texas Legislative Session.

In the meantime, if you’re convinced you need a loan to ensure a happy holiday season, make sure to read the fine print. If it sounds too good to be true, it probably is. Look for alternatives to payday lending like borrowing from credit unions and using layaway options. You might also see if your employer offers cash advances on future paychecks.

Want to help fight predatory loans? Tell AARP your story about payday and auto title lenders, or help us find others who have been affected. Contact us toll-free at 866-227-7443 or email

Ollie Besteiro is the AARP Texas State President 

Photo courtesy Taber Andrew Bain

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