Statewide poll shows support for capping payday loan rates and fees

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A statewide poll released today shows that  nearly two-thirds (63 percent) of surveyed Texans age 45 and older support a state law that would cap the interest rates and fees these businesses can charge borrowers.   The majority of those surveyed (79%) believe that these loans should be capped at 36% or less.

AARP is urging the Texas legislature to clamp down on the predatory practices of payday and auto title lenders. These lenders regularly charge annual percentage rates (APRs) of 500 percent or more--draining wealth from Texas families and often pushing them further into debt and financial hardship. The poll was commissioned by AARP Texas and has a 4.4% margin of error.

These poll results suggest we have Texans’ support.

“Clearly Texans think that putting a stop to the high interest and fees that trap Texans in a never-ending cycle of mounting debt is long overdue,” said Joe Sanchez, Associate State Director of AARP Texas. “It’s time to give borrowers a fighting chance to repay these loans.”

The poll clearly indicates that Texans are looking to their elected officials for answers.  The vast majority (75%) of Texans surveyed strongly agree that government leaders in Texas should work to lower the interest rates and fees of payday and auto title loans in the state.

In 2011, the Texas Legislature took an initial step towards meaningful reform for the first time in a decade. House Bills 2592 and 2594 established basic licensing, reporting and regulation.  But they fell short in addressing the cycle of debt these loans create.

For many cities and counties across Texas, this just wasn’t enough.  Austin, Dallas, El Paso and San Antonio have taken measures into their own hands by enacting ordinances to rein in payday lending and protect their residents.

Photo courtesy Taber Andrew Bain