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Payday Lending Reform Press Release
For immediate release: May 19, 2011
For more information contact Ellen Arnold, 512-431-5384
Carona And Truitt Announce Substantial Progress On Payday Reform Bills;
Advocates Applaud Final Drafts, Look Forward To Swift Passage
AUSTIN—Senator John Carona and Representative Vicki Truitt announced today that payday reform legislation that passed the House late last week should be on the Senate floor on Saturday. The legislators said final tweaks made to the bills in the Senate should ensure broad support.
Advocates applauded the legislation and reaffirmed their support.
“We are so grateful to Rep. Truitt and Sen. Carona for their leadership on this important issue, and we wholeheartedly support the bills,” said Lori Henning of Goodwill Industries of Texas. “Texans can be satisfied that HB 2592 and HB 2594 represent the first meaningful legislation regulating the payday loan and auto title industries in Texas.”
Carona said, "We have a package that, while not as far reaching as many of us would like, will help the consumer who seeks these products and, for the first time, gives the State the ability to go after the bad actors."
Truitt said, “Clearly, we all wanted to accomplish more. Still, these bills are very important first steps in a process of creating consumer protections without impairing people's ability to get short-term loans. They ensure good and accurate communication with the customer, good information about the industry, as well as licensing and law enforcement in the industry.”
“HB 2592 and HB 2594 establish a fair, basic regulatory framework for an industry that has not really been regulated before in Texas,” said Bee Moorhead of the interfaith group Texas Impact. “We look forward to working with lawmakers, the Texas Finance Commission and the lending industry to implement the legislation and help achieve financial stability for Texas families.
HB 2592 ensures that customers have the information they need to make informed decisions and that lenders cannot hide important terms and conditions. HB 2594 for the first time gives the Office of Consumer Credit Commissioner licensing, oversight and examination authority over payday and auto title lenders. It also ensures compliance with lawful debt collection practices and the Federal Military Lending Act for loan products with terms of 90 days or fewer.
Advocates acknowledged that the bills do not address every one of their concerns with the short-term loan industry including the “cycle of debt” that many borrowers fall prey to, but said they look forward to continuing to work on the issue going forward.
“These bills are a big step forward for working families, and we move from an ‘anything goes’ approach to a more accountable structure for consumers and businesses, and the state of Texas” said Don Baylor of the Center for Public Policy Priorities.
The bills are expected to be discussed on the Senate floor on Saturday.