Abbott Defends Predatory Lenders, Not School Kids
In January 2006, Attorney General Greg Abbott issued a legal opinion detailing how payday lenders could get around state law restricting predatory lending practices in Texas. The alternative his office created helped an industry that has since donated $159,000 to his campaign. Abbott took a stand for the predatory payday loan industry, and was rewarded accordingly.
Yet this past December, Abbott showed he was unwilling to find an alternative for Texas kids that are facing billions in education cuts. Abbott could have chosen to fight against the cuts; instead, he is defending them in court. Abbott will not take a stand for the school children of Texas.
Abbott Legalizes Loan Sharks
Greg Abbott selectively uses the powers of his office when it helps his donors. Abbott found an alternative for payday lenders - an industry that has given Abbott $159,000 in recent years - that allowed them to organize as a different entity. Instead of operating under existing regulations, payday lenders could operate as Credit Service Organizations, or CSOs, and thereafter charge exorbitant fees to consumers. Abbott's letter granting them this power was clearly his own opinion - he wrote, "We believe there is not" any reason the change could not occur.
As the financial industry publication American Banker wrote:
"The Irving, Tex., company originally saw too much legal risk in the CSO setup, in which payday specialists can collect as much as 20% in fees for arranging a short-term loan from a third-party lender. But this month Texas' attorney general, Greg Abbott, sent a letter to the state's Office of Consumer Credit Commissioner saying that CSOs are permissible. So on an earnings conference call last week Ace said it will begin brokering loans as a credit service organization sometime in the next two quarters."
Abbott Doesn't Stand Up for Texas Kids
Today, the state of Texas is facing a legal challenge for cutting $5 billion from Texas schools, sustaining tremendous inequity in the state's school finance system. As Attorney General, Greg Abbott has an alternative as to whether or not he will defend the law in Texas's state court. He could choose not to defend the cuts, as the Dallas Morning News reported:
There is precedent in Texas for an attorney general declining to defend a state law he disagrees with. Former Attorney General Jim Mattox refused to defend the state’s anti-sodomy law, saying it was unconstitutional.
Abbott's choice? To defend the school cuts:
Abbott said he was doing his job as attorney general when he defended the state against lawsuits by school districts.
Greg Abbott ignores state laws regulating predatory lenders but defends state laws cutting school funds.
And he wants to be Governor?
Sign our petition to Governor Rick Perry urging him to call on Texas Finance Commission Chair William White to resign his post.