Davis calls on Cash America exec to step down from state commission
12/30/2013 6:49 PM
12/30/2013 6:50 PM
State Sen. Wendy Davis, who is seeking to succeed Rick Perry as governor, on Monday called on William J. White, a vice president at Fort Worth-based Cash America, to resign as chairman of a state watchdog commission that oversees lending institutions.
Davis, D-Fort Worth, spoke out after an El Paso Times article quoted White as blaming borrowers — not payday lenders — for getting themselves into a cycle of debt through the high-interest loans. If people make bad decisions, they must face the consequences, he told the paper.
Davis called White’s 2009 appointment to the Finance Commission of Texas a “blatant conflict of interest.” She noted that Cash America, one of the nation’s biggest payday lenders, recently settled a dispute with the U.S. Consumer Financial Protection Bureau over alleged abusive practices by agreeing to pay $19 million in fines and refunds. The bureau said it found “robo-signing” of court documents and overcharging of military service members.
“Texans are tired of backroom deals and dishonesty in Austin,” Davis said in a news release. “William White can’t protect Texas consumers while he represents a predatory lending company on the side. Mr. White should resign from his post — and if he won’t, Governor Perry should remove him.”
Cash America defended White by saying, “Cash America does not see his appointment to the Commission as a conflict of interest.”
In a statement, spokeswoman Yolanda Walker said Cash America hired White nine years ago after he retired as a lobbyist in Austin where he forged strong ties with officials.
“One of the requirements for that [commission] seat states that Bill must be affiliated with a consumer credit organization, which he is through Cash America,” the statement said. “Bill does not work with specific lobby teams, but members of the Finance Commission are regularly contacted by bankers, mortgage bankers, savings and loan representatives and consumer credit organizations.”
Payday loans are small, unsecured loans that critics say can get easily out of hand. If borrowers miss a payment and take out new loans to cover the original amount, they can be swept into a spiral of debt with interest hitting 500 percent or more. Lenders like Cash America argue that if overdraft penalties and other fees were viewed as interest, retail bank charges would also seem high. Nonetheless, 12 states have banned payday lending.
In his interview with the El Paso Times, White defended payday lending by saying: “People make decisions. There’s nobody out there that forces anybody to take any kind of loan. People are responsible for their decisions, just like in my life and in your life. When I make a wrong decision, I pay the consequences.”
White also disputed that troops were taken advantage of by Cash America, which the Consumer Financial Protection Bureau accused of extending loans to more than 300 active-duty service members and dependents, some with rates higher than the 36 percent limit that the federal government had set for borrowers in uniform.
“To date, not a single soldier has been identified who has been disadvantaged,” White told the Times. “In fact, Cash America is one of the earliest companies that put into effect things to identify and make sure when they’re overseas protecting our freedoms that we were not putting burdens on them.”
It wasn’t Davis’ first salvo against White. Two years ago, she referred to White’s appointment by Perry as the “the classic fox in the henhouse.”
“It’s really disgusting that an industry that profits from the poor by charging 1,000-plus interest is put at the head of the state’s financial regulatory agency,” said Davis, who has pushed for reforms and worked with a coalition of churches opposed to payday loans. “It’s saying, ‘It’s not only OK, but we’re going to put them in charge.’ ”
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