You will find over 3,500 personal loan companies within the state of Texas. The Texas legislature is thinking about SB 253 and HB 410 to restrict this short-term credit business. The two pieces of laws make an effort to re-define “credit service organization”. Article resource – Texas lawmakers propose SB 253 and HB 410 to limit payday loans by MoneyBlogNewz.
The Credit Service Organization exemption
Right now, you will find a lot of limits in Texas. Financial institutions and consumer credit are both limited due to this. Currently cash advance stores have to be put under an umbrella phrase. “Credit Service Organization” is what this phrase is. Those without a credit history or with a bad credit history the ones that short-term credit is offered to with payday loan stores. The exemption does not make note of any differences between check cashing services and payday advances. Check cashing is for those who don’t have banks while pay day loans are for anyone who does not have the right credit available.
What will take place with the TX payday advance regulation?
The two bills that have been introduced within the TX legislature re-define “Credit Service Organization” to specifically exclude payday loan stores. The fees charged based on annual percentage rate would be very limited. About 3,000 to 6,000 of the 7,800 employees at payday advance stores would lose jobs in Texas if this passed. This is what industry estimates expects. It would also reduce the amount of accessible credit to consumers who use cash advance stores.
Welcoming additional oversight
Further regulation and oversight is welcomed by Texas payday advance stores and loan companies even though they have shown they’re against TX SB 253 and HB 410. There is something very distinct about the short-term credit that is available through pay day loans. Charge cards, credit unions and banks generally cannot afford to give this kind of credit to many. The cash advance industry says that it provides a useful and needed service. The interest rates, which are less than credit card cash advances typically, are what lawmakers are concerned about.
Articles cited
Texas State
legis.state.tx.us/tlodocs/82R/billtext/pdf/SB00253I.pdf#navpanes=0
Texas HB
www.legis.state.tx.us/tlodocs/82R/billtext/pdf/HB00410I.pdf#navpanes=0
KXAN
kxan.com/dpp/news/politics/state-looks-to-curb-payday-loans
Personal Money Store
personalmoneystore.com/payday-lending-statistics/
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