Texas lawmakers propose SB 253 and HB 410 to limit payday loans

Sunday, June 22nd, 2014 By

Payday loans

Payday lenders in Texas are facing possible new regulation. Image: Flickr / stallio / CC-BY-SA

In Texas, there are more than 3,500 payday lenders. Two new pieces of legislation — Texas SB 253 and Texas HB 410 — have been introduced as a way to limit this short-term lending. Both of these bills seek to redefine “Credit Service Organization” to exclude payday loan stores.

The Credit Service Organization exemption

Texas law currently limits consumer credit and financial institutions. Payday loan stores currently operate under the name umbrella of a “Credit Service Organization.” This is because payday loan stores offer a form of short-term credit that is available to those without a credit history or with a bad credit history. This particular exemption does not make a differentiation between check-cashing services — which provide services to those without banks — and payday loans — which provide services to those who don’t have access to the credit they need.

Effect of Texas payday loan regulation

The two bills that have been introduced in the Texas legislature re-define “Credit Service Organization” to specifically exclude payday loan stores. This would limit the fees that these stores can charge based on an annual percentage rate. Industry estimates are that somewhere between 3,000 and 6,000 of the 7,800 employees at payday loan stores in Texas would lose their jobs. It would also reduce the amount of available credit to customers who use payday loan stores.

Welcoming additional oversight

Though Texas payday loan stores and lenders have come out against Texas SB 253 and HB 410, they have said that they do welcome further regulation and oversight. Short-term credit available through payday loan stores is distinct, as it is a style of consumer credit that banks, credit cards and credit unions simply do not usually offer. The payday loan industry claims that it provides a useful and needed service. Lawmakers express concern over the interest rates, which usually clock in at less than a credit card cash advance.


Texas SB 253 (PDF)
Texas HB 410 (PDF)
Payday Lending Statistics report

Previous Article

« When Sea World strikes back! Dawn Brancheau tragedy revisited

Dawn Brancheau was an excellent trainer of marine animals and she paid the ultimate price. It’s unclear whether Dawn let complacency skew... Sea World trainer Dawn Brancheau was killed by a killer whale.
Next Article

Be Sneaky When Looking to Save Quick Cash »

Experts instruct consumers to have six to nine months of quick cash handy for financial emergencies, but how do they find it?

Other recent posts by bryanh

Get bad credit loans instant approval

Apply today and get bad credit loans instant approval. Get up to $1,500 deposited straight to your bank account -- in as little as two hours!
Woman lying on the floor using a white laptop to apply for bad credit loans with instant approval.

Idea to incorporate savings rate into credit scores wins $50,000

Factoring savings into credit scores won the grand prize in a contest for ideas on how to boost the falling national savings rate to 10 percent.
a savings credit score could increase the U.S. savings rate

Advance payday loans online | Get up to $1,500 today

If you need to borrow cash until payday, you can get it fast and easy with advance payday loans online with instant approval. CLICK TO APPLY
Woman wearing an orange tank-top, lying down using a laptop.