El Paso-centric info and commentary from the Center of North America

NPT Juxtapose: Dueling press on payday lenders

Follow the jump for press releases from the office of state Rep. Marisa Marquez and from the Consumer Service Alliance of Texas regarding proposals to further regulate payday and/or short-term lenders.

From the office of Marquez:

Legislators, Public Interest Group Push to Protect Texans
Consumers Hurt by Bad Actors in Credit Industry

AUSTIN, TX- Several state lawmakers today unveiled HB 3744, a bill that ensures a level playing field for all Texas consumer lenders. Their announcement coincided with the release of a new report from Texas Appleseed urging state licensing and regulation of payday lenders.

State Representatives Joe Farias, Carol Kent, David Leibowitz, and Marisa Marquez joined Texas Appleseed Senior Policy Analyst Ann Baddour and Don Baylor of CPPP at a press conference today to unveil their core legislative principles and highlight the report.

Earlier this session the representatives filed separate bills to address the unregulated payday loan industry problem. At today’s press conference, they unified behind a set of reforms (see attached one-pager) needed to protect Texas borrowers and ensure fairness in the lending industry. The legislators designed their legislation to attract broad, bipartisan support. Texas Appleseed’s new report starkly illustrates the need for new legislation, showing that payday lenders utilize a loophole in state law that allows them to operate as credit services organizations (CSOs) and avoid state regulatory oversight, licensing and consumer protection required of other lenders.

“We need to have clear ‘rules of the road’ for CSOs, a cop on the beat to enforce those rules, and some strong safeguards for Texas consumers,” said Rep. Marquez.

“Texas payday loans are among the most expensive in the country. We found that the majority of payday borrowers are low- and moderate-income women and minorities, many of them single mothers. Nearly one in 10 of surveyed payday borrowers uses these high-cost loans monthly-and nearly 60 percent reported rolling over their loans, which can trap consumers in a destructive cycle of debt,” said Texas Appleseed Senior Policy Analyst Ann Baddour.

Rep. Farias added, “The time is now to deal with this unregulated lending market. We need to be sure that lenders are helping and not hurting.”

From the Consumer Service Alliance of Texas:

Short-Term Credit Industry, Consumer Choice Advocates
Back Meaningful Reform That Protects Consumer Freedom

AUSTIN, Texas (April 8, 2009) – Ensuring that hardworking Texans continue to have access to short-term credit should be part of any legislative effort that imposes additional regulation on Credit Service Organizations (CSOs) in the Lone Star State, consumer choice advocates and industry representatives said today.

“Small, short-term lenders in Texas are not opposed to additional, meaningful oversight,” said Alex Vaughn, president of the Consumer Service Alliance of Texas (CSAT), a trade association representing the interests of consumers and CSOs across Texas. “Our members look forward to working with lawmakers on reforms that will continue to protect Texas consumers without taking away a meaningful financial choice.”

CSOs provide retail financial products and services to Texas consumers. From stores in neighborhoods across the state, hardworking Texans have access to small, short-term loans; money orders; pre-paid telephone and debit cards and other services to help them manage their finances.

One of the services CSOs provide is securing an independent third-party lender for customers who need small, short-term loans to meet their immediate financial needs. CSOs do not directly provide loans to consumers.

Michael Price, executive director of the Texas Coalition for Consumer Choice (TCCC), said short-term credit plays an essential role in the Texas marketplace and can be a much more cost effective way to help families meet an immediate financial need than, for example, bounced check fees, late fees and reconnect fees for utility bills and credit card charges.

“Short-term borrowers must have bank accounts and jobs. Like most Texans, they are educated and carefully evaluate the credit terms available to them,” he said.

“Continued access to small, short-term loans is vital for many Texans. While our mission includes helping TCCC members budget and save, circumstances often dictate that they borrow responsibly. Our experience shows other lenders cannot meet their needs,” Price added.

Last year, credit service organizations formed CSAT to help educate their customers, facilitate communication among members, and foster meaningful dialogue with policymakers.

CSAT adopted a set of industry best practices that ensure member companies hold themselves to a higher standard of responsible service and help customers make better financial decisions. Among the best practices, all members are required to disclose fees in terms of both an annual percentage rate and a dollar amount.

Another significant step for members was to agree to post notices in all member stores to clearly inform customers that criminal prosecution will not be threatened if they cannot repay their obligation; only lawful collection practices according to state and federal law will be followed; and every member store will maintain a toll-free 800 number for complaints, and a response will be provided for every complaint.

“We also encourage our customers to budget responsibly. We teach them how to save so they will not have to borrow for every financial emergency. But, we firmly believe consumers should have a variety of choices when deciding how to meet individual and family needs,” Vaughn said.

Written by newspapertreeelpaso

April 8, 2009 at 3:26 pm

Posted in Uncategorized

10 Responses

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  1. Payday lenders are bottom feeders. Consumers need protection.

    Ken G

    April 9, 2009 at 1:49 pm

  2. Consumers need protection? Only the dumb ones.

    Andrew Carnegie

    April 9, 2009 at 4:37 pm

  3. dumb meaning poor…meaning dumb, meaning poor…
    no one disputes the value of Texans having access to short-term credit in some circumstances, but you’ll notice that there is no mention of arguably the crux of this matter- which is the interest rate charged, which I won’t even give examples of so as not to be obscene- in either article. I think because both police and thieves are negotiating not over the size, but of the carving. These are simply two jaded missives between Job’s comforters. Look how they adorn themselves with the raiments of journalism. Watch how no one protects the Texas “consumer”…

    cold rock

    April 12, 2009 at 11:38 am

  4. …and…and, don’t call me a f*&^&?$% “consumer”!!! I’m a f!@#$%^ human being; maybe THAT’S where your going wrong…

    cold rock

    April 12, 2009 at 11:44 am

  5. Cold Rock

    Offended by Consumer? How does such thin skin retain bones and nuscle. Boy you need a life or some good dope


    April 13, 2009 at 12:45 pm

  6. yeah, and I can see you trotting around behind my posts like some rabid chihuahua with a stick up her axel. Talk about thin skin.
    “Consumer”, when used by Job’s comforters (aka politicians), in this context, is the kind of euphemism you don’t understand until it’s too late. But WTF do you care? OMG!!!!
    Please oh please forgive me for having an opinion. I dared speak an opinion against the elites! THE F$#@^%G COOL KIDS!! THE IN CROWD!
    Ask me about herballife if you must, but don’t ask me if I give a fudge.
    oh, and like the philosopher said, “let them also whip me, so long as I am not there…”

    cold rock

    April 13, 2009 at 8:26 pm

  7. but still in all it’s good to know Lisa has such stalwart fans. I hope you are calling her and letting her know.
    I can see you are upset about something perhaps I wrote. While there was alot of roughhousing and hard ribbing, nothing really personal.Or bloodlusty. Like you said, perhaps more of a frog-voiced moan. You may not see that difference, and I’m sorry if you don’t.

    You’re not even listening to me are you…

    cold rock

    April 13, 2009 at 9:15 pm

  8. ColdRock
    Nope not listening, nothing worth hearing.

    By the way I saw your insane rants on Paul’s site as well. How do you feel now that Paul is promoting the call screener that you resent so much because of his accent and place of birth. Is your white power blood boiling?


    April 14, 2009 at 7:21 am

  9. Promoted to what? Head call screener? (giggling)
    The only thing I resented was my treatment, get that straight. Perhaps I have set him on the trail of learning that there is more to being an American than Disneylandia. I wish him well. I have already stated that I would not pester you nitwits and your “media”, so can you please just let me have the last f!@#$%g word so I can melt away, and you can get back to preening, and we can all get back to our lives?….

    cold rock

    April 14, 2009 at 12:08 pm

  10. I promise I will try to be your ideal of a cool El Pasoan who is worth talking to: (mocking tone) “an EXPAT!!!”

    cold rock

    April 14, 2009 at 12:31 pm

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