Sign Up

Raise Texas

Action Campaigns

Alternative Small Dollar Consumer Loan Products and Policies

The Alternative Small Dollar Loan Products Campaign was launched because of the proliferation of payday and auto title lending locations in Texas – over 2,800 locations – with no meaningful state oversight or regulation. These lending businesses charge annual percentage rates upwards of 500 percent with loan terms that often result in further deterioration in individual and family financial stability. The appeal of the loans is that they are quick and easy to obtain. The problem with the loans is that they are difficult and expensive to pay off.

Our coordinated efforts throughout the last year and addressed during the RAISE Texas Action Summit in November 2009, reflect continued progress in creating more options for families needing short-term cash and improving regulation of payday and auto lending in Texas.

Following are the action steps that came from the November 2009 Action Summit:

Product Action Steps

Current Products

  • Propose a reasonably structured and priced payday and auto title loan alternative to the industry for consideration.
  • Propose that CSOs clearly disclose a purported policy to negotiate a longer-term amortizing loan term for those customers that are unable to pay their loan back in two weeks.
  • Promote SHARE loans currently being offered as viable alternatives to high-cost consumer loans. This action step will involve research of existing programs and then matching these programs to community organizations/agencies working directly with clients who need short-term loans.
  • Longer-term objective: Use the results of the FDIC Small Dollar Loan Pilot Program to determine successful mainstream bank models (best practices) and promote their use to Texas banks and credit unions.

Potential Products

  • Support the efforts of the Texas Credit Union League’s REAL Solutions payday loan product that will launch in early 2010. Encourage participation by local credit unions throughout the state and help market each program offered.
  • Support the efforts of local programs to create alternatives to high-cost small dollar loans and explore a state-wide program based on successful models.
  • Connect community-based organizations to local financial institutions willing to offer small dollar loans to their clients.
  • Work with the “Bank on” campaigns and financial coaching models to promote viable options for families that need it most.

Policy Action Steps

  • Continue to promote fair small dollar lending standards.
  • Continue to promote data reporting requirements for Credit Services Organizations.

Our goal, coming out of each summit, is to develop a concrete and achievable strategy to build on the momentum of the previous year. We will strive to create meaningful growth in the loan options available to families. We will also push ahead on the path towards regulatory and legal reforms of an industry that has too long been subsidized by the lack of accountability under Texas law.

Bills Introduced During the 83rd Legislative Session:

HB 420 Rep. Farias
Relating to requiring that certain notices and disclosures provided by credit access businesses be in foreign languages.

HB 1715 Rep. Pickett
Relating to limitations on the renewal of deferred presentment transactions and motor vehicle title loans.

SB 1001 Senators Davis and Rodriguez
Relating to extensions of consumer credit a credit services organization obtains for a consumer or assists a consumer in obtaining.

SB 823 Senator Carona
Relating to authorized acquisition and delinquency charges for certain consumer loans.

SB 824 Senator Carona
Relating to the administrative fee authorized for certain consumer loans; changing the amount of the fee.

HB 1040 Rep. Anchia
Relating to the repayment of certain extensions of consumer credit facilitated by a credit access business.

HB 1886 Rep. Farias
Relating to requirements applicable to certain credit services organizations and certain extensions of consumer credit the organizations obtain for a consumer or assist a consumer in obtaining.

HB 2019 Rep. Craddick
Relating to a limitation on the total charges in connection with certain extensions of consumer credit facilitated by a credit services organization.

HB 786 Rep. Eddie Rodriguez
Relating to extensions of consumer credit a credit services organization obtains for a consumer or assists a consumer in obtaining.

SB 1247 Senator Carona
Relating to certain extensions of consumer credit facilitated by credit access businesses; providing a civil penalty.
(Companion bill to HB 2706)

HB 2706 Rep. Villarreal
Relating to certain extensions of consumer credit facilitated by credit access businesses; providing a civil penalty.
(Companion bill to SB 1247)

HB 3033 Rep. Eddie Rodriguez
Relating to the confidentiality of information contained in credit access business license applications.

SB 1715 Senator Davis
Relating to a requirement that a credit access business include copies of its agreements with third-party lenders in an application for a license.

Copyright © 2016 Raise Texas® | 1811 West 38th Street Austin, TX 78731 | Privacy Policy | Contact Us


Powered by ARCOS | Design by Plus Three