While the Finance Commission of Texas states that it aims to 'ensure that the banks, savings institutions, consumer credit grantors, and other regulated entities chartered or licensed under state law operate as sound and responsible institutions,' Governor Perry has ensured that just the opposite occurs because his appointee to chair this committee serves as vice president of a big-name payday lender that has been found guilty by federal officials of unsound business practices.
In addition, a story this week from the El Paso Times reveals that William White (Perry's appointee and chair of the Texas Finance Commission) believes any malpractices, like the kind his company Cash America paid $19 million in fines and fees for violating, is not at fault of payday lenders, but the consumers who have no other financial option but to fall prey to high-interest loans. Unfortunately, William White was appointed to protect this exact group of people he blames.
Wendy Davis has stepped forward again, who has previously pointed out White's conflict of interest and has long been a champion for payday lending reform, and is calling for White to step down from his chairmanship, or be removed. White's term on the Finance Commission doesn't expire until 2016.
Read more about William White's conflict of interest and Senator Wendy Davis' statement below the jump.Cash America recently received sanctions last month from the US Consumer Financial Protection Bureau for abusive practices. Cash America paid $19 million in fines and fees for violating rules such as lending to soldiers at interest rates higher than the 36 percent prescribed by federal law.
White denies Cash America ever gave out loans to soldiers at interest rates higher than what is legally allowed. When he was asked to respond to a claim by a former El Paso City Council Member that payday lenders in Texas profit off of making people poor by charging up to 500 percent interest on a loan, he said: “People make decisions. There's nobody out there that forces anybody to take any kind of loan. People are responsible for their decisions, just like in my life and in your life. When I make a wrong decision, I pay the consequences.” He then implied that the people who turn to payday loans only use them for luxury expenses like television sets. White ignores the fact that these loans, which usually have up to 500% interest, are the only loans some people are able to get– especially if they are low-income. These high interest rates are so difficult to combat when you don't have the means to pay them back that you are then sucked into a cycle of debt. Mr. White sees it as paying the consequences– to something he provided and set the standards for.
The interest on a Cash America loan is actually 533 percent on a 14-day loan. White also didn't know how much of the company's revenue comes from loans that are paid off after the initial loan and how much is rolled over interest. But as chairman of the Texas Finance Commission, he oversees an office that tracks that information for the statewide industry– the Office of the Consumer Credit Commissioner. Texas Appleseed, a consumer advocacy organization, has determined about 60 percent of payday loan revenue in 2012 came from rollovers. White feels no sympathy and no responsibility for the financial struggles he has caused for Texans, and can not be bothered with any details he easily has access to.
In a press release, Davis called White's appointment to the commission, “the classic fox in the henhouse.” The rest of the press release can be seen below:
Davis: Perry Should Fire William White
Fort Worth, TX: Senator Wendy Davis today called on Governor Rick Perry to remove William White as Chairman of the Finance Commission of Texas in the wake of controversial statements made by White to the El Paso Times.
White's position oversees the Office of the Consumer Credit Commissioner, the agency charged with protecting Texas consumers.
In a blatant conflict of interest, William White, a Vice President for Cash America International, defended his employer instead of Texas consumers in an interview with the newspaper. Cash America is a payday lender that was fined $19 million dollars by the U.S. Consumer Financial Protection Bureau last month for abusive practices.
“Texans are tired of backroom deals and dishonesty in Austin,” said Senator Wendy Davis. “William White can't protect Texas consumers while he represents a predatory lending company on the side. Mr. White should resign from his post – and if he won't, Governor Perry should remove him.”
A 2006 Department of Defense study concluded that payday lending and other high-cost lending products are a threat to military readiness and destructive to the morale of troops on active deployment. The President of the Navy Marine Corps Relief Society called payday lending in particular “the most serious single financial problem that we have encountered in [a]hundred years.”
This isn't the first time Sen. Davis pointed to William White's conflict of interest. In 2011, Senator Davis called White's appointment to the commission, “the classic fox in the henhouse.” She said, “It's really disgusting that an industry that profits from the poor by charging 1,000-plus interest is put at the head of the state's financial regulatory agency. It's saying, 'It's not only OK, but we're going to put them in charge.' ”
Sen. Davis has been a champion for payday lending reform since joining the Texas Senate in 2009. She has filed multiple bills targeted at reform. Senator Davis has filed legislation that would close the credit service organization loophole, limit the interest rate charged to U.S. military members and their dependents, and cap the interest payday lenders can charge.
Both the Texas Baptist Christian Life Commission and the Texas Catholic Conference have applauded Senator Davis in her work to reduce payday lending. In 2012, the Texas Baptist Christian Life Commission presented Senator Wendy Davis with the Horizon Award to recognize her work to curb predatory lending practices in Texas.
Wendy Davis has proven yet again that she will ensure industries will be accountable to the people they serve, instead of putting those people in charge. This situation shows exactly how Rick Perry and his deemed successor Greg Abbott, have no concern with protecting the exact people whose practices they should be monitoring. With no special interests protecting the everyday consumer, Texans literally pay the price for the lack of oversight in the payday lending industry.