Payday Lending, Caregiving Top Legislative Agenda

By Thomas Korosec

With several Texas cities taking the lead, the Legislature faces pressure to do more to curb some of the worst practices of payday lenders—and AARP volunteers are actively involved in the effort.

Angie Garcia, an AARP Texas volunteer, was part of a campaign that successfully urged the El Paso City Council to place limits on payday loans. Under an ordinance that took effect this year, customers cannot borrow more than 20 percent of their gross monthly income and the number of times a loan can be renewed is restricted.

El Paso passed another ordinance in September that applied zoning restrictions to keep payday lenders from clustering in the city.

Garcia, who appeared before the City Council to press for the local regulations, said: “What we are seeing now is the payday lenders are moving out into rural areas of the county so they won’t have to comply. So more needs to be done.”

Garcia said she has talked with her representatives in the Texas Legislature and urged them to address the issue when a new session begins on Jan. 13.

The 79-year-old retired purchasing agent noted that educated people, including a schoolteacher and a college student she knows, as well as poorer and less sophisticated people, have been trapped by payday loans in “a cycle they can’t escape.”

At least 18 Texas cities, including Dallas and Houston, have adopted restrictions on payday lenders, but statewide action is needed, said Tim Morstad, manager of outreach and advocacy for AARP Texas: “There is more and more pressure bubbling up as more Texas cities take action. Good work is being done at the local level, but the long-term fix is at the statehouse.”

AARP Texas is urging the Legislature to cap abusive fees on payday loans.

Morstad pointed out that other states have capped fees and that this has not put lenders out of business or reduced access to credit: “With the cap we would keep more money in the pockets of Texans, and they’d still be able to get the loans they are seeking.”

AARP Texas is working with faith-based organizations and Texas Appleseed, a legal advocacy group, on the payday lending issue.

Tighter rules needed

The other major issue AARP Texas is working on for the 2015 session is nursing home regulation—specifically, what to do with homes that repeatedly place residents in immediate risk of harm or death.

“Nursing homes play an important role in providing long-term care in our communities, and we need to ensure they are providing the highest level of care,” said Charlene Hunter James, a member of the all-volunteer Executive Council for AARP Texas and former director of the Area Agency on Aging in Houston.

James, 63, said nobody wants to strangle the industry, but “something must be done to weed out those who impose life-threatening dangers on their residents.”

Morstad said AARP Texas is backing several nursing home reforms, including a proposal by state Sen. Charles Schwertner (R-Georgetown) to impose a “three strikes” rule that would force the state to close nursing homes found to have had three highest-level violations of federal quality standards on three occasions over two years.

Schwertner, an orthopedic surgeon and chairman of the Senate Health and Human Services Committee, said at a hearing in August that seven of the state’s 1,200 nursing homes would have been required to close under that proposal.

Next year the Legislature will conduct a once-a-decade review of the Texas Department of Aging and Disability Services. Morstad said this will provide an opportunity to “tighten things up and make sure that bad apples don’t exist in this very important industry.”

James is urging AARP members in particular to contact their state legislators about the need for quality care and safety in nursing homes.

“The more they [legislators] hear from us, the more they take note,” she said.

Members who want to advocate on legislative issues can reach the Texas staff at aarptx@aarp.org.

Thomas Korosec is a writer living in Dallas.