Monday, May 20, 2013

Payday Lenders Spend Huge Money for Lobbying

Payday lenders continue spending huge amounts for lobbying the legislatures and senators. According to a recent report, the payday loan industry has spent over $4.4 million for the purpose, just during the last legislative session alone. The amount was spent for the purpose of killing some legislation which was put forward by the consumer advocates. The consumer advocates blame the industry for draining the wealth of the lower income groups in Texas.

Payday Loan

Texans for Public Justice’ report says that the USA payday loans industry is still spending a lot of money just for lobbying the Texas senators. As per the report, the payday lenders have already spent over $4.4 million just for this purpose.The industry has almost spent $8.4 million during the last two sessions. This figure shows how ardent the industry is to kill the legislation which come against the industry in the legislature.

These regulations are meant to cap the interest rates of payday loans. Besides interest rates, some other fees are also collected by them, finding loopholes in the laws prescribed by Federal Bank.

Though many states have banned these high-rated loans in their states, Texas has not yet banned them. Besides Texas, nearly 15 other states also have not regulated the payday lenders.

The report is concluded, challenging Joe Straus, the Texas House Speaker. He has received a huge amount of cash, approximately $311,000, from the payday loan lenders and auto title lending industry in the form of campaign contributions. The report asks the Texas House with whom it will stand. Will it stand with the poor Texans who lost their vehicles and homes last year, or will it stand with the payday loans USA industry, which mostly works from outside Texas.

As per the report, last year nearly 35000 Texans lost their vehicles, due to the higher rates of payday loans. It further asks the speaker to answer with whom the house will stand as the house members are given over $1.3 million by the lending industry.

Rod Aycox-headed Select Management Resources has spent the largest amounts to the lobbyists. It is paying up to $485,000 to ten lobbyists.

TPJ has found out that eight former lawmakers and four legislative staff members were registered payday lenders. The report adds that the failure of the Texas House to act against the payday lenders has prompted the cities to come up with their own legislation  If the state senate fails again to implement tough regulations against the industry, the cities will surely have to come up with tougher legislation.

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