Texas House took a step toward stricter regulation of payday lenders on Wednesday, tentatively approving a bill that would require lenders to make more detailed disclosures to their borrowers.
The House initially suppressed some of the proposed disclosures, narrowly approving an amendment by Rep. Gary Elkins, a Republican from Houston who began his argument with a disclosure from him that he himself is in the business and does not is not hospitable to further government regulation.
Elkins said the additional disclosures would “overburden” consumers. “I don’t want to be in a position where it is impossible for me to comply with the law,” he said.
“We are so regulated that clients come out with 20 pages of legal disclosures now… as it is written, I could not comply with the requirements of this bill,” he added.
Representative Vicki Truitt, R-Southlake, has been negotiating for months with payday lenders and with groups that want to leave those lenders on a leash, even using lawyers to mediate the talks. She has three bills, two of which are on Wednesday’s agenda and the third on Thursday.
She started off by saying that she was not trying to ruin the industry. “There is clearly a market for these services,” she said. “It is not my desire to bankrupt desirable operators.”
And, she said, she was unwilling to make many changes, as previous efforts to regulate payday lending were torn apart or, as she put it, “heavily modified, attacked. and ultimately killed “.
She said she wanted to eliminate “predators” without harming “legitimate operators” in the payday lending industry. But Elkins and others bristled at the idea of more regulation.
“I don’t think the Consumer Credit Commissioner is the competent authority to regulate this industry,” Elkins said. He said consumers are doing what they do “in their own economic interest” and don’t need more layers of protection.
A movement to kill his amendment failed 75-64. After it was added to the bill, he said he would vote for it.
“I don’t like government regulation.… All they are is primarily a barrier to doing business,” Elkins said. “These disclosures, guys, they’re already made.”
Truitt’s second bill on the subject would allow the state to license and supervise payday lenders and auto title lenders and would also impose a fee on businesses to pay for regulation. He was ruled out on a technical point but could come back later.