Payday lenders gave Senator John Carona $140,000 between 2009 and 2012. Now, he's pushing a weakened reform bill that fails to address some of the worst practices of these predatory lenders.
Texans for Public Justice recently published a report highlighting the $3.7 million dollars doled out by predatory lenders to Texas politicians. At the top of the list? Rep. Joe Straus, Lt. Gov David Dewhurst, Governor Rick Perry, AG Greg Abbott, former Rep. and failed SD-10 candidate Mark Shelton, and Senator John Carona.
In a hearing on the bill, Carona basically admitted that lawmakers are on the take from the predatory lending industry, according to the Texas Observer:
At a legislative hearing this morning, state Sen. John Carona, the Dallas Republican who's leading the payday “reform” effort in the Senate, basically said the industry had bought off lawmakers. Carona was defending the latest version of his payday loan legislation, which most advocates derided as unacceptably weak. Senate Bill 1247 would scuttle the efforts of most of Texas' big cities-Austin, San Antonio, Dallas and El Paso-to rein in payday loan excesses and codify the industry's loan products in statute.
“You have to get the most you can get with the political support that you have,” Carona said. “This industry is in business and this industry has amassed enormous political support at the Capitol.”
It's too bad the low income people of Texas who are preyed on by these establishments lack the same political clout in our Republican Legislature.
Carona has said that even those lawmakers (such as himself!) who take substantial sums from payday lenders know that reforms are needed. What's so shameful about this is that most of the Legislators and Senators taking the money don't even need it. Carona and Straus are safe incumbents, and the only reason for them to amass war chests stockpiled with dirty payday lender money is to run for higher office, just so they can again fail to regulate this truly heinous industry.
From the Observer:
Carona blamed the industry's stroke for the hobbled proposal he laid out in committee this morning. In almost every respect it's weaker than the filed bill.
Well then don't take their dirty money and do their bidding to recklessly profit from financial abuse of the low-income people of Texas! This should not be hard for anyone!
Yesterday, the Texas Tribune reported that the entire bill may be in jeopardy, thanks to consumer reform groups who are backing away from the watered-down industry-approved bill Carona's pushing.
From the Trib:
The initial version of the bill elicited measured praise from consumer groups. But that support has eroded amid concerns that the bill's consumer protections have been watered down and that key provisions have been replaced by language favored by industry trade groups.
In the original bill, a payday loan taken on within five days of a previous loan was considered refinancing – a rule intended to prevent borrowers from rolling over their loans ad infinitum, paying more fees and interest. Consumer activists wanted a period of seven days, but the revised bill would reduce the required gap to two days.
In the original bill, the size of some payday loans was capped at 15 percent of monthly income for those making less than $28,000 a year, and 20 percent for those making more. In the new version of the bill, those limits are set at 30 percent and 40 percent, respectively.?
Worst of all, this bill would relax payday lender regulations passed on the municipal level in Austin, Dallas, San Antonio and El Paso. Cities should have the right to regulate these lenders as the local community sees fit.
This bill does the bidding of predatory lenders while masquerading as “reform” and will not hold in check the abuse these businesses regularly subject their customers to. They are a scourge on Texas, and the lawmakers that are taking their money and doing their bidding should be ashamed.