Supports Payday & Auto Title Lending Reform in Texas
Austin, Texas-This week the League of Voters of Texas adopted a position to support policies, legislation, and programs that enable the small dollar loan market in Texas to maintain access to affordable credit while safeguarding consumers. The League believes that payday and auto title loan companies can operate both as a consumer service and a successful business. "This position gives us a new tool to prevent a long-term cycle of debt among Texas consumers in need of immediate cash," said state League President Elaine Wiant.
A 2-year study of Payday and Auto Title Loans in Texas by the state League addressed the issue by asking: To what degree should payday and auto title lending be regulated in Texas? How can the small-dollar loan market be regulated so that lenders function both as a consumer service and a successful business? The completed study brief, Facts & Issues: Payday & Auto Title Loans in Texas published by the LWV-Texas Education Fund, presents balanced, factual information from the points of view of the borrowers, lenders, and opposition. As part of the study, local Leagues across the state held public forums to explore the issue and member meetings to reach consensus on policy options.
The League believes that a loan is affordable if the borrower can repay the loan and cover basic expenses without borrowing again or obtaining money from another source. The League supports:
In August 2014, 207 companies were licensed as credit access businesses in Texas, operating 3,299 storefronts in 2, 232 cities and towns. During 2014, 1.7 million Texans took out over 2.7 million new payday and auto title loans. The estimated initial cost for a Texan of financing a single payment 2-week $500 payday loan is $127 while that of a single payment 30-day auto title loan is $137. As of January 15th, the Texas Municipal League reported that 31 cities have business ordinances and 15 cities have land-use ordinances that regulate payday and auto title lenders.
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The nonpartisan League of Women Voters of Texas has been "educating and agitating" since 1919. The League encourages active and informed civic participation in government and increased understanding of major public policy issues. The League of Women Voters' non-partisan Voters Guide is highly respected and sought after by voters in local and statewide elections in Texas.