In most neighborhoods, especially low-income neighborhoods, you don’t have to look far to see signs advertising “payday loans” and “title loans.” In my old neighborhood, Spring Branch, it seems like there are two or three per block the entire length of Long Point.
On the other hand, borrowers who use payday and title loans often have poor credit histories, or no credit history at all, and may have few options. For some consumers, a high-interest payday loan on the day rent is due may be a better and cheaper alternative than getting evicted.
A large coalition of churches and consumer groups, the Texas Fair Lending Alliance, has pushed the Texas Legislature and city government throughout the state to crack down on what they see as predatory lending practices. The Consumer Service Alliance of Texas represents payday and title lending companies.
Last year, Senator Royce West (D-Dallas) filed S.B. 121, which would have imposed state-wide restrictions on payday lending.
Your assignment, write a 2 page essay (college-level, double-spaced, etc.) explaining:
1. What you would do to help get this bill passed if you were representing consumer groups.
2. What you would do to change or defeat this bill if you were representing payday and title lenders.
3. Finally, how you would respond to these groups, their arguments and activities if you were a state legislator.
Submit in Word. Cite your sources.
Remember, the assignment is about interest groups. Don’t focus on what a ripoff you think payday loans are, or on how consumers ought to be free to make their own choices and how government isn’t supposed to be everybody’s mom. Focus on how you would manage the issue on behalf of each of the two interest groups.
Additional Resources
The Texas Tribune covered the legislature’s efforts on this issue: http://www.texastribune.org/2015/04/29/lawmakers-lend-ear-concerns-about-payday-loans/
The Dallas Morning News talked about it on their blog: http://trailblazersblog.dallasnews.com/2015/04/lawmakers-face-long-odds-in-effort-to-crackdown-on-predatory-lending.html/
