payday and auto title lending in texas: time to close the loophole and level the playing field

7/31/2019 Payday and Auto Title Lending in Texas: Time to Close the Loophole and Level the Playing Field

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LendingLendinge to Close the Lo

ay n

in Texas

in Texasphole and Level te


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ARTICLE 16. GENER

Sec. 11. USURY; RATABSENCE OF LEGISL

The Legislature shall have au

maximum rates of interest; pr

absence of legislatioof interest all contrac

annum shall be deemfurther, that in contracts wher

upon, the rate shall not exceannum.

L PROVISIONSOF INTEREST IN

TION.

thority to define interest and fix

ovided, however, in the

fixing maximum ratests for a greater rate of

ed usurious; provided,e no rate of interest is agreed

d six per centum (6%) per


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TITLE 4. REGULATION OFINANCED RAN ACTION

342: CONSUMER LOANS

Sec. 342.007. DEFERTRANSACTION

Passed in 2001

INTEREST, LOANS AND, UBTITLE HAPTER

ED PRESENTMENT


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CommiCommi Governed by the Finance C

Sets interest rates and fee

Regulates the market by -

Licensing Lenders

Enforcing Texas Law

Educating Consumers a

Communicating Among

sioner sionerommission of Texas

d Credit Providers

he Industry and Public


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Prior to 2005, payday le

Texas usury laws.

When that loophole wasthe industry found a nethe regulations containe

.

ders in Texas partnered

closed by federal action,loophole in order to avoid in the Texas Finance


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re erv cere erv ceAS FINANCE CODE, TITLE 5

F FINANCIAL SERVICES

PTER 393 CREDIT SERVI"Credit services organization"

the following services with resp

dit by others:

improving a consumer's credit histo

providing advice or assistance to a.

d in 1997 and intended to reguluals repair or improve credit.

rgan za organ za o

: PROTECTION OF CONSUM

ES ORGANIZATIONSmeans a person who providesct to the extension of consume

y or rating;

onsumer with regard to Paragraph (

ate organizations that help


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ho gets the moneyho gets the money

CSO or PLend

CSO or PLend

$60.0$60.0

out of $361.06out of $361.06

BorrowerBorrower

00.0000.00

The CSO Act sets

ydayrydayr

F nanc aInstitutionF nanc a

Institution


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00 Paydayn made on

th

4/25/2010(2 weeks)

Rollover

5/9/2010

(4 weeks)

Rollover5/23/2010(6 weeks)

Rollover (8 weeks)

Rollover6/20/2010(10 weeks)7/7/2010

ees and Interest

$61.06 $361.06

$61.06 $422.12

$61.06 $483.18

$61.06 $544.24

$61.06 $605.3


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nua ercnua erc

52

n age a en age a e

%

Titl LTitl L RR


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r Title Loar Title Loa,000 Auto-

March 22nd

Date

4/21/2010

Rollover 5/21/2010

Rollover 7/20/2010

Rollover 8/19/2010

RepaymeRepayme

Charged mount

$1,269 $5,26

$1,269 $6,53

, ,

$1,269 $9,07

$1,269 $10,3


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38

==

%


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Numbers & Graph (Ann

In 2006 - 1,279 CSOsIn 2010 - over 3,594 reg

Thats more locations th

.

B. will finish)

egistered in Texas.istered.

n McDonalds and


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Average number of CS

.

Highest Number 45 Rep

geographic district in th

MAPPING for All House

Example:http://www.co

tx/house_94_patrick/ma

locations per House

. Hochberg, the smallest

state.

and Senate Districts

munitywalk.com/arlington

p/555986


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olutions

sv e

drdson

e

ntonioe

o

County

County

an Basis Regional Council

Zoning Ordinances

rv ng

RichardsonLittle Elm

Garland

MesquiteSachse

San Antonio


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& Level the& Level the

0 by Rep. Tom Craddick

6 by Rep. Joe Farias

1 by Rep. Eddie Rodriguez

laying Field laying Field

SB 253 by Sen. Wendy D

SB 251 by Sen. Royce W

vv


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v .v .

Payday Loan

Existing Lending

Law

CSO Lo

Charges

0 loan)$15.60 $60

135%

(14-day term)

521

(14-da

ral Post-Dated Check Post-Dat

ht

Yes N

id to State$100

Cor o

Car Title Loans

ophole Existing

Lending Law

CSO Loop

00 $22.00 $75.00

%

term)

89%

(30-day term)

304%

(30-day te

d Check Car Title Car Titl

Yes No

per

ation

$100 p

Cor orat


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ongress passed, and Pres.George

en lending to members of the armed

254 by Sen. Wendy Davi

Fair Lending and the 500% Interest i

ederal law is enforced in Texas.

. Bush signed in to law, new regulatiorces and their immediate family. Te

s

Wrong Coalition support efforts to in

es eg s aes eg s a

ve pproacve pproac


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es eg s aes eg s a

revious legislative attempcreated a new regulatoryand fees, duplicating wh

Finance Code.expressly exempted CSregulations

Did not include regulation

: wayday and car title lendervoid necessary consumer

eferenced today ARE the

ve pproacve pproac

ts at regulation -scheme, including ratest is already in the Texas

s from the newly created

s for auto title lenders

,will be able to continue t

protections. The bills

ompromise.


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at our Faith Trat our Faith Tr

brew scriptures:

t deal with them as a creditor; ym. (Exodus 22:25)

ristian scriptures:Luke 6:34 And if you lend to teive, what credit is that to you?

ck the same amount.

amic scriptures:

And what you give in interest tople's wealth, increases not wit

ditions Teachditions Teach

, ,

u shall not exact interest from

ose from whom you expect toEven sinners lend to sinners, t

hat it may increase on otherAllah (God). (Q'uran 30:39)


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.stoppaydayabuse.org.stoppaydayabuse.org www.texasfaithforfairlendi

payday and auto title lending in texas: time to close the loophole and level the playing field

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