Lawmakers Hear Payday Loan Bill Testimony
Some legislators are concerned that the poor ol' payday lenders are getting picked on.
State House committee members heard testimony Wednesday regarding a group of bills that would modify payday and auto-title loans.
The bills would set limits on how many times lenders can refinance loans, and would require that 25 percent of each payment installment go toward the principal. Advocacy groups like Texas Appleseed, the Texas Catholic Conference, the AARP, and the Center for Public Policy are for the bills. Dudes like Rob Norcross, the spokesman for the Consumer Service Alliance of Texas, are against them.
Norcross testified Wednesday morning, speaking out against one component of the bills: "The requirement that they split the loan into no more than four pieces, that is still going to be too much to pay back for some people," the Texas Tribune reported.
The Tribune also reported that a few committee members expressed concerns as well, especially after hearing from Katherine von Haefen of the United Way of Greater Houston.
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"We have watched these products increase the time of service with the clients that we serve," von Haefen said, according to the Tribune. "Inevitably, these families will have a financial emergency and payday lenders pounce on the opportunity to trap these families."
State Rep. Dan Flynn, R-Canton, shot back with, "You think they force families into borrowing money from them? You don't really think anyone is pouncing anyone." (We're surprised he didn't end with "BOO-YAH!").
Meanwhile, State Rep. Giovanni Capriglione, R-Southlake, weighed in with an illustrative analogy, comparing usurious interest rates to an overpriced cup of coffee. Noting that he lived near an intersection crowded with Starbucks, he still controls his own destiny: "If I buy a $5 latte, that's on me."
A Senate committee heard testimony regarding similar bills in that chamber. All bills are pending. We'll keep you posted.
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