Hubert Humphrey once said that the Government’s most quintessential role was to protect the vulnerable among us. Specifically, the needy. In Texas, there are few industries that pick on the needy more than the payday lenders. The condoned loan-sharks regularly charge interest rates upwards of 600% APR and aggressively pursue frivolous criminal charges against those who cannot pay. Contracts are often protracted in length and are replete with byzantine terms.
Such excesses have long prompted the disapprobation of the most influential within society. Most religions of the world rightly chastise such practices for what they are: usury. Payday lending does, of course, serve a needed purpose, but it may be conducted with appropriate constraints. This are the idea employed by most other major municipalities within Texas, such as Austin and Dallas, who have already enacted needed ordinances to reign in the excesses of this industry. These ordinances, by and large, require the lenders to register with the City, strongly regulate how straightforward a contract may be, limit the principal of these loans and robustly curtail abuses of the refinancing of these loans. Unfortunately, a general limit on the interest rate was not included.
Tomorrow, the Houston City Council will debate including the aforementioned regulations in its code of ordinances. The issue, which has long eluded Houston as its contemporaries enacted the regulations, has occurred thanks to a zealous push by Mayor Parker to enact her progressive vision for the City. This board strongly supports the ordinance and hopes that the City Council will as well.
However, not everyone is as ecstatic over this ordinance. Both Democratic and Republican Councilmembers have voiced harsh indignation and strong concerns over the proposed rules. Charges that the ordinance would be disastrous to business, anathema to personal responsibility or damning to honest merchants are notoriously unfounded. Like many other hyperbolic statements this board sometimes hears of the “Chicken Little” variety, the cataclysmic prognostications offered would lend more credence if nearly identical measures had not been enacted in similar cities with little-to-no problems.
Though in all fairness, this board does is dubious as to belief opponents of this ordinance when they say they are truly concerned with the well-being of business and society. Indeed, there is an ominous correlation between those opposed to the ordinance who sit on the Council, and those who have received campaign contributions from pro-Payday lender lobbyists.
At the public session of the City Council today, one of these such opponents appeared ready to do what he could to delay this ordinance another meeting–which would delay its final consideration into the next Council term. Fortunately, this will do little to impede the inevitable passage of the measure, as last Saturday’s runoff election saw two candidates opposed to the ordinance be defeated by proponents.
Councilmember James Rodriguez, a notable opponent of the ordinance, had harsh words to say about his detractors at today’s meeting. He defiantly noted that he had not been bought by the payday lenders who have contributed heavily to his campaign. This board believes him; we remember that Mayor Parker also received contributions from these groups and is now vehemently pushing the regulations. However, we also hope that Councilmember Rodriguez remembers this when it is time to vote.
The Texpatriate Editorial Board is comprised of Olivia Arena of Austin, George Bailey & Noah M. Horwitz of Boston and Andrew Scott Romo of New Orleans.