LAWMAKERS TEAM UP TO EXPOSE UNDERBELLY OF PAYDAY LOANSHARKS
Legislation Filed to Reveal Secret Payday Loan Backers
AUSTIN, Texas – March 12, 2013 – Legislation was filed last week by Texas State Representative Eddie Rodriguez and Senator Wendy Davis to force disclosure of secret “third-party lenders” that bankroll many of our state’s worst payday and auto title lenders. HB 3033/ SB 1715 (http://www.legis.state.tx.us/BillLookup/History.aspx?LegSess=83R&Bill=HB3033) comes on the heels of a Texas Office of the Attorney General opinion in January (https://www.oag.state.tx.us/opinions/openrecords/50abbott/orl/2013/pdf/or201301094.pdf) supporting such disclosures, which have been upheld in subsequent lawsuits by the payday lending industry.
“We’ve been trying to find out who the big money interests are that benefit from these lenders’ predatory practices,” said Representative Rodriguez. “Until we know who is really behind the curtain, we won’t make legislative progress to rein in the worst abuses.”
While much of the market is complying with current law requiring certain disclosures of backers in contracts, there is a segment of the industry that seeks to conceal the names of their third-party lenders. Exposing these backers is an effort to ensure both legal compliance and to prevent monopolies of lending capital.
“The business of payday and auto title lending is obscured by laws that block public access to specific information regarding the extent to which big third-party lenders bankroll these loans,” said Senator Davis. “Our bills would expose these financial relationships to the sunlight of public disclosure and open records. Passing this legislation will empower consumers and potentially enhance the regulation of payday lenders by tracking the flow of money to their financial backers.”
HB 3033/ SB 1715 would simply allow the Office of the Consumer Credit Commissioner to disclose the names of the secret financial beneficiaries of these loans. If the legislation receives two-thirds vote of the Legislature then the rule will have immediate effect, otherwise it would take effect in September