We have a “ton” of readers in the Texas payday loan industry and they’ve all been concerned about the new House and Senate Bills that were introduced.
The impact on the payday loan industry? Zip! No biggie! We already do these things! Of course, our costs will go up. So, payday loan consumers will pay more. And stock prices for some of the publicly traded guys will drop (already reflected in stock prices).
Here’s the latest…
The Texas Senate approved rule changes for the payday loan industry.
HB 2592, passed by the Senate increases the disclosure requirements for payday loan companies. It requires Texas payday loan companies to make clear to consumers that payday loans are intended to meet short-term rather than long-term financial needs. It will also require companies to clearly disclose the fees and interest charged to the consumer. The companies would also have to post the contact information for the state consumer credit commissioner.
The other bill, HB 2594, will require payday loan operators to obtain licenses from the Office of Consumer Credit. Carona emphasized on the floor that each payday storefront, not merely each payday company, would have to obtain the license. The bill would allow the Office of Consumer Credit Commissioner to charge fees for licenses and assess penalties for violations.
(OK, so instead of paying $100/year for a CSO Registration in Texas, the State is going to increase implement license fees for payday loan companies. Ah… “violations”? They mean audits!)
The bill would also establish the Texas Financial Education Endowment. The bill would require each payday lender or license holder to pay an annual assessment of up to $200 to improve consumer credit, financial education and asset-building opportunities in the state.
(Why don’t credit card companies, credit unions, banks, mortgage companies… have to do this?)
Consumer “protection” groups and industry lobbyists negotiated the bill and agreed to it on the condition that it would remain completely unchanged when it came to the floor.
(Ultimately, it will increase our costs. Better said, it will increase the costs consumers must pay to get a quick, no-hassle, non-collateralized loan in Texas. But then there’s always the Internet :o)
Jer – Trihouse