Payday loan industry the focus of Texas campaign
January 20, 2014 by Max
Those who have pushed for what they term to be reasonable consumer protection directed at the payday loan industry have a hero in Jerry Allen, a member of our Dallas City Council. In order to shore up support for a growing coalition of cities seeking to use legislation to limit payday lending practices, Allen recently traveled to El Paso.
Councilman Allen, like many payday loan critics wants action taken against what he calls predatory lending across the state. While in El Paso, which at the end of last year passed but has not yet implemented payday loan legislation, he made the case for a united front among the major Texas cities. The El Paso leadership agreed to stand firm with the cities of Austin, Dallas, Houston, and San Antonio against these lenders.
Consumer protection groups across the country have issued warnings about payday lenders and have pushed for stringent regulations of the industry, but the payday loan industry, in defending itself, says it fills an underserved niche market of consumers who need short term emergency loans. Those in the industry further contend that converting their fees to annual interest rate is an unfair comparison, since loans are not intended to be a long-term solution.
Laws on payday loans vary from state to state, but one thing that both sides of the argument have in common is that they all seek to sway the public to their side by partnering with brochure printers to make their case.