I have been rough on Madam Mayor for many things, but she
gets this one right.
Houston officials laid out proposed restrictions on payday and auto
title lenders Tuesday, drawing tepid support from the industry and
disappointment from advocates who say the rules would not stop the
spiral of debt for many low-income borrowers.
The Texas Legislature discussed regulating payday lending in 2011,
but met stiff industry resistance and made little progress. Since then,
Dallas, Austin, San Antonio and El Paso have adopted regulations. Dallas
and Austin have been sued over their restrictions.
Houston leaders say they will wait to see whether the Legislature
acts during its current session before voting on their proposal. Mayor Annise Parker has said the industry "cries out for regulation" and called the state's failure to do so "disgraceful."
Kuff has written extensively about the
payday lending topic, including this
most recent, so I'll just chime in to say that the Lege is unlikely to take Parker's scolding seriously enough to actually do something about it.That's primarily because these swindle merchants have bought the Austin politicos off. Included among the ranks of legislative loansharks is Houston's very own
Gary Elkins, owner of 12 payday lending stores himself.
The usual suspects lead the list of contributions from this unsavory crew and their PACs:
Rick Perry ($35,500), Greg Abbott ($58,500), and Speaker Joe Straus ($131,800). And if you wanted to know more about how disgusting these shylocks are, just read about Irving's
Trevor Ahlberg; payday lender, Republican contributor, and elephant hunter.
It's also noteworthy that consumer activists aren't completely fond of Houston's effort in this regard.
Consumer groups said the proposal is focused on what the industry could stomach, not what is best for the community.
They prefer the ordinance adopted by Dallas and other cities, which
sets lower caps than the Houston proposal on the amount consumers can
borrow, allows the plans to be refinanced fewer times, caps the number
of installments that can be offered in multiple-payment deals, and
requires the principal loan amount to be reduced by 25 percent with each
refinancing or, on a multiple-payment deal, with each installment.
But while the mayor got it mostly right, I'm not so sure about her
consigliere, David Feldman.
"On the other hand, it needs to be recognized that payday loans are
often the only source of credit that these very same consumers have
access to. Overly restrictive regulations can reduce the availability of
the source of credit for those who need it the most."
Just looking out for the little guy. How thoughtful of the city attorney. Feldman obviously missed the memo regarding the reason payday swindlers have become the lending source of last resort for so many: banks are
swimming in cash and don't really want to lend it out to anybody, creditworthy or not. This has been the case since the bank bailout in the fall of 2008, and one of the main reasons the national economy remains sluggish. By the way, you heard that the banks got even more money in undisclosed, unregulated loans from the Fed --
a total of $7.77 trillion -- than they did via TARP ($700 billion) , right? The same goes for
community banks as well as the Big Six, of course; they are making more money playing the stock market than they are making loans.
There probably isn't going to be any progress in this regard either, as the banks own all the Congress critters. Obama's appointee-designate for SEC chair, Mary Jo White, was praised by none other than
Jamie Dimon as being "a perfect choice" for the job.
Shouldn't that automatically disqualify her?
Update: "
So God made a banker".
And on the eighth day God looked down on his planned paradise and said, “I need someone who can flip this for a quick buck.”
So God made a banker.
God said, “I need someone who doesn’t grow anything or make anything but
who will borrow money from the public at 0% interest and then lend it
back to the public at 2% or 5% or 10% and pay himself a bonus for doing
so.”
So God made a banker.
God said, “I need someone who will take money from the people who work
and save, and use that money to create a dotcom bubble and a housing
bubble and a stock bubble and an oil bubble and a commodities bubble and
a bond bubble and another stock bubble, and then sell it to people in
Poughkeepsie and Spokane and Bakersfield, and pay himself another
bonus.”
So God made a banker.