Texas has long been considered the Wild West of payday lending, with some of the loosest regulations in the country on those flashy shops boasting short-term loans.
After mixed results in the last legislative session, more than three-dozen organizations have teamed up to launch the Texas Fair Lending Alliance, making a new push for reform. The consumer protection group, launched today, advocates changing Texas’ laws governing short-term payday and auto title loans.
The alliance also released a poll showing Texans support capping the interest rates and fees that payday and title loan businesses can charge. Borrowers currently face more than 500 percent APR for these loans, according to the public interest law center Texas Appleseed, one of the members of the Alliance.
Eighty-five percent of registered voters who participated in the poll believed the appropriate rate for short-term loans should be 36 percent or less, and three-quarters of them supported changing the law to allow for a capping of fees and rates.
In Texas, short-term loan businesses have blossomed by charging consumers oppressive rates. In 2011, an eight-day payday loan carried 1,153 percent annual rate in Texas—one of the highest in the nation. The average annual rate for loans in other states was 400 percent, according to the nonprofit Center for Responsible Lending. … FULL STORY