Wednesday, June 27, 2012

500% APR Not In Our Town: Say Some Local Texas Government Leaders

By Laura Whitley

               The cycle of debt served up by payday and auto title lenders to thousands of Texans is getting the attention of some local Texas government leaders.  A coalition of consumer advocates, hope their efforts rope in some of wild rates in the state known as the “wild west” of short term lending.

“These loans are defective products that unfairly target working families, military families, and seniors,” said Rebecca Lightsey, Executive Director of Texas Appleseed.

Texas Appleseed is one of a wide collation of consumer advocates crisscrossing the big state, looking to reel in the big fish… loan sharks that prey on the state’s working poor. Known as the Texas Fair Lending Alliance, members of the group are visiting with local government leaders in Texas cities pushing for reform.  An effort that appears to be paying off, in San Antonio the city council gave the city attorney the green light to draft an ordinance to limit lenders.  Houston’s city comptroller, Ronald Green was quoted by the Houston Chronicle as saying an ordinance is, “..clearly on the table.” Meanwhile reforms in Dallas and Houston have already been approved.

Reforms would include:

1.        Payday loans limited to 20% of a borrower's gross monthly income

2.        Auto title loans limited to either 3 percent of the borrower's gross annual income or 70% of the vehicle's value

3.        Each loan would have only 4 installments and each rollover would reduce principal by 25%

These efforts are characterized as long overdue by the majority of respondents to a recent poll released by Texas Appleseed.  Texas lawmakers yet again caved to the loan shark-esque industry’s $3.9 million dollar lobby and failed to protect consumers during the last legislative session.

A new poll commissioned by Texas Fair Lending Alliance found 75% of respondents support changing Texas law to cap the interest rates and fees that payday and title loan businesses can charge customers.

If you know someone who is struggling with pay day loans and other debt, there is help. Visit www.bankruptcyattorneytx.com

1 comment:

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