If Texas lawmakers want to govern more industries from Austin, one place to start is payday lending.
Right now, 22 cities have local rules governing payday loans, primarily because the lack of state regulation allows lenders to push abusive rollover loans and charge the poorest customers interest rates past 600 percent.
Efforts to regulate the industry have crashed royally in the last two sessions.
Yet calls for reform are growing louder from faith-and-values Republican conservatives, including Texas Baptists and the Texas Catholic Conference.
A consumer credit bill, Senate Bill 1282, goes before the House this week, and reformers hope to see an amendment by Rep. Tom Craddick, R-Midland, to include language from his House bill limiting refinance loans and tightening consumer protection.
Craddick, a staunch conservative and former House speaker, was quoted this session as saying: “This is a pretty sad day in the state of Texas. You have the No. 1 state in income and jobs in the country and yet we are charging the highest [interest] rates of any state in the nation on payday loans.”
More national religious leaders recently joined the call for payday reform.
In Washington last week, Russell Moore of the Southern Baptist Convention’s Ethics and Religious Liberty Commission called payday loans “a form of economic predation [that] grinds the faces of the poor into the ground.”
Credit and finance should be regulated at the state level, not by cities struggling to govern a huge industry.
Now is a good time for Austin to pass fair rules.