Pay day lending facing new regulations in TX

In Texas, there are more payday lenders than you will find McDonald’s stores. The TX legislature is considering limiting this short-term credit business. 2 pieces of complimentary legislation have been introduced towards this end. The 2 pieces of legislation try to re-define “credit service organization”. Source for this article – Texas lawmakers propose SB 253 and HB 410 to limit payday loans by MoneyBlogNewz.

The exemption you get as a Credit Service Organization

Consumer credit and financial institutions are very limited in TX. ”Credit Service Organization” is what Payday loan stores are under right now. Those without a credit history or with a bad credit history the ones that short-term credit is offered to with payday loan stores. The exemption does not make note of any differences between check cashing services and payday advances. Check cashing is for those who do not have banks while payday loans are for any person who doesn’t have the right credit available.

What will occur with the Texas payday loan legislation?

Payday loans are excluded from “Credit Service Organizations” in TX legislature. This is what the two bills are for. There would result in being limits to the fees. The stores would not be able to charge as much. About 3,000 to 6,000 of the 7,800 employees at payday loan stores would lose jobs in TX if this passed. This is what industry estimates expects. Consumers who use cash advance stores will end up not being able to get credit as very easily.

Welcoming additional oversight

Further regulation and oversight is welcomed by TX payday loan stores and loan companies even though they have shown they’re against Texas SB 253 and HB 410. There is something very distinct about the short-term credit that is available through payday advances. Charge cards, credit unions and banks generally cannot afford to give this kind of credit to many. A useful and needed service is provided by the payday advance industry. The interest rates, which are less than charge card cash advances typically, are what lawmakers are concerned about.

Articles cited

Texas State

legis.state.tx.us/tlodocs/82R/billtext/pdf/SB00253I.pdf#navpanes=0

Texas HB

www.legis.state.tx.us/tlodocs/82R/billtext/pdf/HB00410I.pdf#navpanes=0

KXAN

kxan.com/dpp/news/politics/state-looks-to-curb-payday-loans

Personal Money Store

personalmoneystore.com/payday-lending-statistics/