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Payday Lenders' Money In Houston Municipal Runoffs Puts Reform at Risk


by: Shelby Alexander

Thu Dec 12, 2013 at 05:00 PM CST


Houston's new payday lending reform ordinance, pushed by the recently re-elected Mayor Annise Parker, is on shaky ground.

Depending on the results of the municipal runoff election this Saturday, the future of the ordinance could change significantly.

The plan, which would make Houston the fifth major city in Texas to pass such regulations, aims to protect consumers by establishing minimum standard business practices to prevent abuse from payday lending institutions.

The future of this ordinance will be especially more difficult to predict because payday lenders are giving much-needed cash to runoff candidates who are preventing payday lending reform from happening.

With five of the races going into runoffs, there are two main races who the payday lending industry has invested their money in. Andrew Burks is one of them, who tagged the ordinance at this week's Houston City Council meeting, which throws off the trajectory of the ordinance, likely pushing it into the new year in which a new City Council will be in place. This procedural shake-up makes uncertain the fate of the ordinance and allows payday lenders to continue preying on low-income Houston residents, whose interest rates often exceed 500 percent APR, trapping people in a cycle of debt.

Curtailing the efforts of predatory lenders has grown to be high-profile cause for progressives, which is why we have seen reforms pass in some of Texas' bluest cities. Legislators -- including Senator Wendy Davis -- have worked for years to cap and limit payday lenders and helped make some of the biggest steps forward for reform in Texas this past legislative session.

However, because of the payday lending industry's strong investment in legislators, statewide reform was defeated-- and the same powers are at play in Houston.

Read who payday lenders are investing in below the jump.

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With 16 city council districts, it takes eight council member votes for the mayor to pass an item. Out of the two runoffs for At-Large seats on Houston City Council, At-Large 2 is the battleground for payday lenders and reform advocates. Because Council Member Andrew Burks (along with re-elected Council Member Jerry Davis) tagged the ordinance at this week's City Council meeting, the ordinance is now likely to face the new City Council in January. Burks also has the most payday lending support behind him, with a total of $4,000 in donations from Locke Lord LLP to his campaign this year. Facing him is architect David Robinson. Although he states he is a Democrat, keeping Burks on Council means he could continue to lead the charge against reform. If more conservative members are elected on Council, this could be especially dangerous for the ordinance.

The runoff in District A could also see a shift in the payday lending vote. District A is known as one of the most conservative districts. It includes communities north of I-10 including Spring Branch. The race is a re-match between current Council Member Helena Brown and the former Council Member she unseated, Brenda Stardig. Brown, who has Tea Party support and has drawn significant criticism for making frequent "no" votes to things like street repairs, for altering employees' timecards, and for attempting to coerce a staffer to go on medical leave when she became pregnant, received $2,000 in 2013 from payday lenders and $500 in 2012. Mayor Parker might find a better ally in Stardig, who she endorsed in the 2011 Council race.

The other At-Large district facing a runoff is District 3, to replace Mayor Parker ally Melissa Noriega. The race is between two Republicans, Michael Kubosh and Roy Morales. Both are currently working to out-conservative each other, meaning no matter who the winner is, they won't be likely to be supportive of this ordinance.

These races seem to not reflect as significant political shift as the others, but as Texpatriate observes, could provide a toss-up in the outcome of this ordinance vote in the New Year. In the city's District D which includes Sunnyside and the Third Ward a runoff is between Dwight Boykins and Georgia Doyle Provost- with Boykins likely to win. Neither have taken a position on the ordinance.

In District I, which includes southeastern Houston and most of Downtown, Robert Gallegos and Graci Garces face a close race. Graci Garces has not taken an official position, but is the Chief of Staff to current Council Member James Rodriguez, who has shown hostility to the ordinance and was absent at this week's Council meeting. Gallegos has come out to support the ordinance.

The turnout of this weekend's election will potentially shift over slightly more supporters or opponents of the payday lending reform ordinance in the new year. With the payday lending industry taking between $800 million and $1.1 billion from Texas families, it's important to be heard in this election this Saturday, December 14.

You can find your polling location here. And make sure you know what you need to go vote.  



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