Payday Lenders May Face Tighter Regulation in Texas
A bill has passed the Texas House that would ensure payday lenders and auto title lenders cannot make unsolicited calls to numbers listed on the Texas No Call list.
Currently, there is nothing in Texas law prohibiting predatory lenders that offer loans with high interest rates and fees from making unsolicited calls to people they identify as potential customers in order to solicit business.
Rep. Chris Turner proposed House Bill 411 to close the loophole, and take an important step to strengthen consumer protection.
The Texas Tribune reported that:
“The bill will not restrict the calls that credit access businesses are able to make to current customers, including those with outstanding debt. As part of an amendment introduced Tuesday, the legislation also stipulates that the businesses will only be allowed to make telemarketing calls for up to one calendar year after all loans have been paid off. The bill passed with a 109-24 vote.”
Predatory lenders have had it too easy for too long in Texas. As we have previously written:
"In 2006, Abbott issued a legal opinion exposing a loophole in Texas usury law that cleared the way for predatory lenders to take advantage of a more profitable provision and operate without limits on interest rates (charging rates in excess of 500%). Between 2006 and 2010, this Abbott-approved loophole helped the number of predatory lenders in Texas nearly triple from 1,279 sites to more than 3,500!"
Rep. Chris Turner’s is an important first step. The legislation still must make it’s way through the Texas Senate - and survive Gov. Abbott’s veto pen - before it can become law.