The Texas legislature is considering three bills to regulate payday lending in the state. Image: Flickr / criminalintent / CC-BY-SA
In the Texas legislature, three new bills intended to limit payday lending are under consideration. One, House Bill 2592, has passed easily. Another is expected to come up for vote today and pass, and a third may or may not make it to the House floor.
Agreed upon legislation
Two of the three pieces of proposed regulation in the Texas legislature are “agreed upon” pieces of legislation. This means that the industry, consumer advocates and some legislators agreed on the legislation. House Bill 2592 passed 123 to 23 in a voice vote. This bill mandates more conspicuous disclosures of the fees and interest rates of the loans that payday lenders offer. House Bill 2594, which requires additional licensing of all storefront locations, is held up in parliamentary debate. The expectation is that HB 2594 will pass when it reaches the house. These two bills are supported by much of the industry, though one payday lending store owner who is a member of the House argued against the bills, saying they were an attempt to push out small business owners.
Controversial legislation to limit payday loans
Unlike HB 2592 and HB 2594, HB 2593 is considered controversial. HB 2593 would place specific limits on the total amount of loans that could be offered to customers. The bill would also limit the number of times a loan can “roll over.” HB 2593 is buried relatively deep in the legislative list, and unless the Texas House addresses it by midnight tonight, it will have to be moved to the Senate or re-introduced next year. The legislative session ends on May 30. Any bills passed by the House today will have to go on to the Senate, be reconciled and then sent to the Governor for his signature, veto or tacit approval.
The question of fee disclosures
The one bill that has already been passed by the Texas legislature requires extensive disclosures. One Texas legislator went undercover in several payday loan stores and reported that only one of the eight stores he visited had conspicuous displays of fees. The legislator did not indicate whether he had been given fee disclosures when receiving the loans.
