Texas Legislature 2013 - Republican Shows Leadership on Predatory Payday Lending Practices in Texas
by Bob Price on April 21, 2013 at 6:17 PM
Why is it that when a conservative Republican stands on the floor of the Texas Senate and stands up for the working poor, the senator who shouts him down is a Democrat who is supposedly all about helping poor people? Could it possibly be the big donations flowing in from payday lenders who operate like the mafia? Read this and you may ask yourself the same question.
UPDATE: A Google News search on payday loans shows similar legislation is stalling in other states as well. Don't let these high powered lobbies buy off the Texas Senate.
Just last week, Senator John Carona, R-Dallas, took to the Senate floor to try to bring up for a vote his payday lending reform bill (SB 1247 - link shows committee votes). The Senate didn’t even debate his bill, they only debated whether to debate it and Carona was shot down. He pointed out that there is an army of payday lending cartel lobbyists working behind the scenes at the capitol right now and through the weekend to try to kill his reform measure. For now, it looks like the lobbyists are winning. “They don’t want reform,” Carona said. “They want to be able to charge, on an ongoing basis, 800 to 1200 percent interest rates on these consumers,” he said. “You ought to find that unconscionable.” This sounds a lot like confiscatory lending practices that used to be illegal in Texas before the Jimmy Carter days of double digit interest rates.
He demanded a vote on Thursday and challenged senators to be on the record, if that was their choice, to be in favor of an industry that operates a lot like organized crime. “Vote against consumers. Have the Republican Party be known as the party that is backed and bankrolled by payday lenders,” he said. “There will always be a debate as to whether this goes far enough," Carona said, explaining that what he is trying to do is strike a balance between protecting consumers and letting payday lenders continue to operate.
Carona noted that even as he was speaking on the floor, payday lending lobbyists were calling senators asking them to switch their votes. Interestingly, a quick look around the floor of the Texas Senate revealed that indeed, many senators were indeed on the phone talking with someone.
Carona said he had the commitments of 28 senators to vote for his bill. He also promised that if senators switch their votes, he would release the names of the senators who succumbed to the pressure of payday lenders. I look forward to seeing, and publishing, that list of names.
Sen. John Whitmire, D-Houston, (my senator) complained that “All I’m getting now is the rush, rush through the lunch hour,” to pass the bill. “I don’t know why we rush,” he said. Oh, poor Whitmire doesn’t want to have to work through his lunch hour? How inconvenient for him to have to actually put in a full day’s work while consumers are charged up to 1200 percent interest for a loan? How convenient is that? It was a pitiful display from the Democrat senator. Is Whitmire –a Democrat who pretends to be looking out for poor people – in the pocket of the payday lenders? One would have to wonder...
“The winner will be the payday industry,” Carona said. “Whose side are you really on when you make this request?” Carona said “Then we’re going to talk very publicly about what changed the minds of those people,” Carona said. If the senator releases those names, we will publish them on Texas GOP Vote.
Let’s be clear: The people who take out a payday loan aren’t looking for a handout. They’re trying to feed their families and make ends meet ahead of their next paycheck, not a welfare check. And honestly, the way the payday lenders operate is a lot like the mob. They’re there to offer a line of credit to people who could not qualify for credit unless they were charged up to 1200% interest annually. No one, not even Sen. Carona, is arguing that these companies shouldn’t be allowed to exist. All the Dallas Republican is asking for is some reasonable limitations, including limits on how many times a person could refinance a payday loan.
Sen. Carona is right when he says the GOP will be labeled as “bankrolled by payday lenders” if his modest reforms are killed. Let's hope that doesn't happen and the Senate passes the bill Monday.
Please call your Texas State Senator and ask him or her to support the leadership being shown by Sen. Carona! Demand that SB 1247 get a fair debate and an on the record vote. Let's see who controls your senator...