State action needed on loans

Advocates of statewide regulations for the payday and auto title lending industry are having their day before Texas House and Senate committees, and a coalition of regulation advocates is pushing hard for action.

After similar attempts failed previously, 22 Texas cities have adopted their own regulations. The state is much better-suited as a regulator of the financial industry.

The Texas Fair Lending Alliance has more than 60 organizations, including AARP Texas, and individuals pushing for limiting loans to no more than four payments, with 25 percent pay-down of principal with each payment, and tighter definitions to make consumer protections easier to enforce.

Rep. Tom Craddick, R-Midland, filed House Bill 3047 to achieve some of those goals, and Rep. James White, R-Woodville, filed House Bill 2808.

Senate Bill 92 by Sen. Rodney Ellis, D-Houston, mirrors Craddick’s bill. Senate Bill 121 by Sen. Royce West, D-Dallas, is a much tougher bill that would set income-based loan limits and restrict refinancing.

A cycle of debt too often accompanies these loans, and Texas must step up.