Approach now before Senate, on the other hand, moves in the wrong direction for Texas consumers
AARP will testify this afternoon in favor of a bill by former House Speaker Tom Craddick that would “level the playing field and end the cycle of debt” for payday and auto title loans by making these loans subject to the same standards that apply to other similar consumer loans in Texas.
HB 2019 is scheduled to be heard by the House Investments and Financial Services Committee in Room E2.030, following adjournment of the Texas House on Monday.
Joe Sánchez, AARP Associate State Director for Advocacy, noted that Craddick’s bill does not create new regulations but simply ensures that all lenders making small dollar consumer loans operate under the same standards. Interest rates charged by these businesses currently range from 280% to over 1,000% APR.
In contrast, SB 1247 by Senator John Carona of Dallas – recently passed by the Senate Committee on Business and Commerce chaired by Carona -- comes “nowhere close to ending the vicious cycle of debt that payday and auto title loans create or capping fees to prevent Texans from falling deeper and deeper into debt,” Sánchez said.
“We should not allow these businesses, with no fee or rate limits for their loan products, to prey on our most desperate and vulnerable citizens,” he added. “Speaker Craddick’s bill would end these abuses but unfortunately Chairman Carona’s measure would pull us in the wrong direction. Making matters worse, it would also pre-empt much stronger local ordinances adopted by several Texas cities. At the end of the day, the Senate bill would result in less consumer protection and more opportunity for abuse.”
AARP’s testimony this afternoon will be presented by Carla Penny, an Austin resident and member of the AARP Texas all-volunteer Executive Council.
More recent news from AARP Texas about payday lending reform: