I still don’t think it’s good enough.
Breathing new life into a proposal that was doomed by the opposition of consumer groups only last week, a Texas Senate committee approved strengthened legislation Tuesday that imposes restrictions on the payday loan industry that could save desperate Texas consumers some $220 million a year.
Sen. John Carona, R-Dallas, said his proposal would end the cycle of debt that entraps thousands of Texans each year by curtailing the kinds of credit products offered, limiting loan amounts based on a borrower’s income and capping the number of times a loan can be refinanced.
Acknowledging that some consumer groups still opposed the bill as insufficiently restrictive, Carona cautioned that a politically powerful industry would kill legislation that reached too far. “In the eyes of none of you is this a perfect bill,” he said at a Senate Business and Commerce Committee hearing Tuesday. “But this is the only version that will pass this session. I am convinced the industry has given as far as it intends to go.”
Carona noted that according to the state’s consumer credit commissioner, the bill’s provisions would limit extensions of loans, saving Texas borrowers as much as $221 million a year. “If that’s not progress, then I am not sure what progress is,” he said.
Only last week the proposal appeared dead when every consumer group involved in negotiations testified against it. On Tuesday, however, representatives of Texas Impact, the Center for Public Policy Priorities and Goodwill Industries gave their blessings. “This will meaningfully benefit more than 300,000 borrowers and will save real money,” said Bee Moorhead of Texas Impact.
See here and here for the background. The bill in question is SB1247. Rep. Mike Villarreal says he is now prepared to move forward with his companion bill after Sen. Carona’s modifications. Others, such as the AARP, Texas Appleseed, and Sen. Letitia Van de Putte, who cast the sole No vote in committee, remain opposed. The modified bill still preempts local ordinances, which to me is a deal-breaker. I believe cities should not be prevented from addressing whatever shortcomings they see in the statewide regulations on these parasites. Until that provision is taken out, I can’t support this bill.