Texas state senate, deciding to go harsher against the payday lenders, approved a tougher regulation against them on Monday. While the bill received 24 favoring votes, six senators voted against the bill. Thus the new bill was passed in the Texas Senate by 24-6.
The bill seems tougher than what was expected and the payday industry will be badly affected by this new regulation. Fort Worth Senator Wendy Davis considers regulating the lenders one of her primary objective in her life. Since 2019, the year which she entered the Legislature, she has been working out plans to control the industry.
By joining with the Democrats she has been pushing a number of amendments which really have upset the industry. With this new bill getting into the House, the powerful payday lending industry will be hammered and face a severe assault.
Sen. John Carona, R-Dallas is the principal architect of the new bill. At the end of a debate which sometimes saw higher argumentative moods, she acknowledged that some changes which crept into the bill could not be kept away. These changes have altered of the bill considerably.
While addressing the senators at the end of the debate, Carona, chairperson of the Senate Business and Commerce Committee said that this bill was one which they can be proud of because the measure included in the bill was only could be dreamt of.
While responding to the new bill, Consumer Service Alliance of Texas stated that the bill supports and stands for meaningful, effective and realistic regulation of consumer borrowing in Texas. The statement of the organization which represents the industry in the state, adds that this is a process and the industry will remain committed to working within it.
Sen. John Whitmire, D-Houston challenged the compromising provision which will allow payday loans to be forced in several cities. He angrily stated that payday lenders will be robbing the people of Houston.
An amendment to the bill was then approved by the senators by votes 21-9. Under this amendment, the cities are allowed to establish their own payday lending ordinances. Carona’s attempt to kill the amendment was overruled by the other senators who favored the amendment.
The senators then accepted other democratic amendments which include limiting the fees and interest rates. The bill also proposes penalty for those who try to offer Payday Loans Texas in any unauthorized way.
Davis said that her previous efforts were thus justified by this. She added that some of the senators voted in favor because they feared the attack of consumers on their way back home.
However, she acknowledges that there are many challenges ahead. The Texas Payday Loans industry has spent millions of dollars in forms of political contributions, will put pressure on the House. She stated that there are over 3500 lenders in Texas alone.
While the critics accuse the lenders for squeezing the consumers with higher rates, the industry says that they are offering lot of help to the people. However as the bill is to be discussed next in the house, we have to wait and see how it turns out.…