Payday Update: Unregistered and Unregulated, Payday Lenders Put Consumers at Risk and Flout Texas Usury Laws

Share on Facebook    Share on Twitter

Author:
Don Baylor /(512) 320-0222 x 108

August 15, 2005

Read Full Article >>  

Since Texas lawmakers defeated HB 846â€"an industry-backed bill that would have tripled the interest rates on short-term “payday” loansâ€"the Texas payday lending industry has adopted another business model to evade state and federal regulation. In July, Texas-based payday lenders regrouped as businesses operating under Texas’ Credit Service Organization Act. As a Credit Service Organization (CSO), a payday lending company dodges both federal guidelines restricting payday loans and the interest rate limits established by the Texas Finance Commission (TFC). Meanwhile, a recent TFC study demonstrates how Texas consumers are being gouged by these high-cost, short-term loans.