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The Legislature shall have authority to define interest and fix maximum rates of interest; provided, however, in the
absence of legislation fixing maximum rates of interest all contracts for a greater rate of interest than ten per centum (10%) per annum shall be deemed usurious; provided,
further, that in contracts where no rate of interest is agreed upon, the rate shall not exceed six per centum (6%) per annum.
TITLE 4. REGULATION OF INTEREST, LOANS AND FINANCED TRANSACTIONS, SUBTITLE B CHAPTER 342: CONSUMER LOANS Sec. 342.007. DEFERRED PRESENTMENT TRANSACTION Passed in 2001
Governed by the Finance Commission of Texas Sets interest rates and fees Regulates the market by
Licensing Lenders Enforcing Texas Law Educating Consumers and Credit Providers Communicating Among the Industry and Public
A History of Loopholes
Prior to 2005, payday lenders in Texas partnered with banks from other states in order to avoid Texas usury laws.
When that loophole was closed by federal action, the industry found a new loophole in order to avoid the regulations contained in the Texas Finance Code.
5: PROTECTION OF CONSUME
APTER
) "Credit services organization" means a person who provides the following services with respect to the extension of consumer edit by others:
ed in 1997 and intended to regulate organizations that help duals repair or improve credit.
$60.00
Borrower
Financial Institution
$361.06 $422.12
1 Rollover
2 Rollover
$483.18
3 Rollover
$544.24
4 Rollover
$605.30
529%
$5,269
1 Rollover
$6,538
2 Rollover
$7,807
3 Rollover
$9,076
4 Rollover
$10,34
APR =
380%
Expansion in Texas
Numbers & Graph (Ann B. will finish) In 2006 - 1,279 CSOs registered in Texas. In 2010 - over 3,594 registered.
Average number of CSO locations per House district = 21.7 Highest Number 45 Rep. Hochberg, the smallest geographic district in the state. MAPPING for All House and Senate Districts
Local Action
Zoning Ordinances
Irving Richardson Little Elm Garland Mesquite Sachse San Antonio Brownsville
solutions
nsville nd ardson se Antonio se so ett s County r County ian Basis Regional Council
Bills that Close the CSO Loophole & Level the Playing Field
HOUSE SENATE
CSO Looph
e Charges 00 loan)
$75.00
eral
Car Title No
ght
aid to State
$100 pe
Congress passed, and Pres.George W. Bush signed in to law, new regulatio hen lending to members of the armed forces and their immediate family. Tex Fair Lending and the 500% Interest is Wrong Coalition support efforts to ins federal law is enforced in Texas.
Previous legislative attempts at regulation created a new regulatory scheme, including rates and fees, duplicating what is already in the Texas Finance Code. expressly exempted CSOs from the newly created regulations Did not include regulations for auto title lenders
Bottom Line: Until we close the CSO loophole, : payday and car title lenders will be able to continue to avoid necessary consumer protections. The bills referenced today ARE the compromise.
ebrew scriptures: If you lend money to my people, to the poor among you, you sh ot deal with them as a creditor; you shall not exact interest from em. (Exodus 22:25)
hristian scriptures: Luke 6:34 And if you lend to those from whom you expect to ceive, what credit is that to you? Even sinners lend to sinners, to ack the same amount.
lamic scriptures: And what you give in interest that it may increase on other eople's wealth, increases not with Allah (God). (Q'uran 30:39)
Coalition Members
Web Resources
w.stoppaydayabuse.org
www.texasfaithforfairlendin