The Pink Dome
You know, I was just saying to myself this morning that what the Texas political blogging scene really needs is a snarky Wonkette-style gossip blog centered around the Texas Lege. And lo, the fates have heard my plea. Thanks to Byron for the tip.
Posted by Charles Kuffner on January 31, 2005 to Blog stuff
For Immediate Release April 21, 2005
Contact: Celia Hagert (512) 320-0222
Payday Loans Threaten Texans Financial Well Being
** Defeat of ‘Loan Shark Bill’ Urged **
AUSTIN// A diverse coalition of opponents to House Bill 846 -- a bill that would open up the practice of payday lending in Texas -- today called on Chairwoman Beverly Woolley and members of the critical House Calendars Committee to delay, if not oppose, the measure in the name of promoting financial well being in Texas. HB 846, by Rep. Dan Flynn is backed by the payday loan industry – such as Ace Cash Express and Advance America – and would make such loans more available, and more expensive, for desperate, cash-strapped Texans.
Rep. Flynn’s bill has generated opposition from groups that legislators normally don’t see united on any issue. In addition to the Military Officers Association of America and the Center for Public Policy Priorities, opponents include the AARP, the Texas Catholic Conference, Texas Impact, and the Christian Life Commission, as well as progressive organizations such as Texas Public Interest Research Group, and People for the American Way.
“The Military Officers Association (MOAA) has become increasingly concerned about the very significant financial problems and penalties incurred by thousands of uniformed service members who are targeted by a wide variety of payday lenders,” stated Colonel Steve Strobridge, U.S. Air Force (Ret.), is the Director of Government Relations for the Military Officers Association of America.
Payday loans are short term, high interest loans that some Texans rely on when they have trouble paying their bills between paychecks. Payday lenders can charge interest rates as high as 800 percent, in addition to high “rollover” fees that extend the loan when borrowers can’t repay it on time. In most cases, the need for such emergency cash can be addressed through responsible financial counseling and traditional, regulated financial institutions.
Rep. Flynn’s bill would, under the guise of “consumer protections” actually open up the availability of payday loans. Among the more egregious provisions of HB 846 are an increase in the fee to $15 per $100 borrowed and the ability of payday lenders to “import” lone shark-level interest rates from institutions in states with far looser usury laws than Texas.
** more **
“Rep. Dan Flynn’s HB 846 is industry-backed legislation that claims to regulate payday lenders,” said Celia Hagert of the Center for Public Policy Priorities. “In truth, his bill would drastically erode the financial well being of thousands of Texas families by exposing them to high fees and exorbitant interest rates. HB 846 works directly against the goals of Chairwoman Woolley’s HB 492 and other bills which aim to strengthen financial literacy among Texans.”
“HB 846 digs the payday loan debt trap even deeper for Texas families,” said Luke Metzger, of the Texas Public Interest Research Group. “It doubles the maximum size of loans from $500 to $1,000. It also raises the price for loans to a flat $15 per $100. For a $500 two week loan, the bill quadruples maximum rates. Instead of charging $19.33 or 100% for this $500 two week loan, this bill permits lenders to charge $75 and almost 400% annual interest. CSHB 846 is a green light to usurious and unaffordable payday loans.”
Rep. Woolley’s bill, House Bill 492, would include elements of personal finance education as part of the essential knowledge and skill of economics and require personal finance education as a condition for high school graduation. HB 492 enjoys wide support from teachers, financial institutions, the apartment association, consumer groups, accountants, and others.