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Payday Lending: Texas Takes Teeny, Tiny Step to (Barely) Regulate

Payday lending, where lower-income, lesser-educated, financially strapped people get some instant cash but sometimes end up paying 500 percent interest, is an industry ripe for some regulating, you would think.

But that's why you're not a member of the Texas legislature.

The Texas Senate passed a bill yesterday that did the absolute minimum possible in terms of regulating payday lenders -- making them provide some more no-doubt impenetrable fine print to customers -- and even then, supporters had to gingerly ask for no amendments that might upset the mighty payday-lending lobby.

"What we present to you today is the limit of what we could do," Senator John Carona told colleagues. "I leave this session disappointed that we're not able to do more."

Senator Wendy Davis, who also pushed hard for a sterner law -- maybe even a cap on outrageous fees and rates -- said the lobby was just too hard to overcome.

"It makes you lose your faith in democracy," she said.

Of course, it doesn't help matters when one key state rep -- Houston's own Gary Elkins -- is both a payday lender and someone who can help or harm bills his colleagues want passed.

So payday lenders remain pretty much unregulated in Texas, their customers often doomed to a growing cycle of debt.

But at least those customers don't have the damn gummint poking around in "small business." So there's that.


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