Statement by Bishop Daniel E. Flores
on Payday Lending Reform Ordinance in Brownsville
September 1, 2014
As the Bishop for the Diocese of Brownsville, I want to strongly encourage Mayor Tony Martinez and the city commissioners to pass the payday lending ordinance before them this Tuesday. Across Texas, but particularly in Brownsville, these “ready cash” lenders are charging anywhere up to 600 percent in annual percentage rates and fees on short-term loans. That’s too high a price to charge someone who is often unexpectedly stuck financially and is merely looking to pay the rent, buy groceries, or get a medical prescription filled. At such rates, it only takes one bad choice for families in the Rio Grande Valley to be consumed by a crippling, never-ending cycle of debt.
In June, I hosted a community dialogue about the impact of payday and auto-title loans in our community. In this discussion, I learned that some of our non-profit assistance programs in Brownsville are seeing as many as 75 percent of their clients who are trapped in these loans.
For the past three legislative sessions, the Texas Catholic Conference has worked to urge lawmakers in Austin to impose stronger consumer protections. However, even with the help of legislators like our own State Senator Eddie Lucio, Jr., the predatory lenders have succeeded in blocking reform by spending millions of dollars and hiring expensive lobbyists. That is why I support the Brownsville City Commission in demonstrating leadership through this ordinance which helps protect our families in Brownsville from predatory lending practices.
Change happens at the local level. More than 18 cities like Dallas, San Antonio, Austin, and Houston have passed zoning and regulatory ordinances in order to provide some basic protection for consumers. The restrictions on expansion and extension of consumer credit are critical for our residents.
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